Spiking energy prices in Europe are tied to an increased reliance on renewables and lowered investments in fossil fuels, according to energy expert Robert Bryce, who argues that the continent’s green policies provide the United States with a clear example of how not to proceed.
Bryce, who made his remarks in testimony to the Senate Committee on Energy and Natural Resources (ENR), also attributed rising prices to overreliance on Russian natural gas as well as Europeans “prematurely shuttering coal and nuclear plants.”
“Respectfully, legislators and policymakers in Washington need a big dose of energy realism. You need an even bigger daily dose of energy humanism,” Bryce told the senators.
He was one of three experts who spoke before the ENR as part of a hearing on domestic and international energy price trends.
The hearing comes shortly after the conclusion of the 2021 United Nations Climate Change Conference, commonly referred to as COP26, at which the United States and other parties agreed to “[accelerate] the phase-out of unabated coal and of inefficient subsidies for fossil fuels,” among other points in the decision text aimed to reduce carbon emissions.
In addition, U.S. climate envoy John Kerry told Bloomberg on Nov. 9 that the United States “won’t have coal” by 2030, reflecting the Biden administration’s reorientation away from hydrocarbons.
“Relying on renewables would also require building hundreds of thousands of miles of new high-voltage transmission lines, but the November 2nd referendum (pdf) in Maine showed very clearly again that rural Americans do not want high voltage transmission lines slashing through their neighborhoods,” Bryce said.
In the referendum, Maine voters made it illegal to build “high-impact electric transmission lines in the Upper Kennebec Region,” undercutting the proposed New England Clean Energy Connection (NECEC) power line linking Canada with the United States.
“Hurting America’s hydrocarbon sector by killing pipelines, banning natural gas, halting drilling on federal lands, electrifying everything, and never-ending tax breaks for big wind and big solar will not solve global climate change. Instead, those moves will turbocharge inflation, imperil our energy security, and impose regressive taxes on the poor and the working class. Our economy runs on hydrocarbons and that will be true for decades to come,” he stated.
EIA Predicts Significant Growth of US Oil Production in 2022
Asked by ENR Chairman Joe Manchin (D-W. Va.) whether the United States should restrict energy exports to protect domestic consumers from volatile prices, Bryce said it shouldn’t.
“I believe in free markets and free trade, sir,” he told Manchin.
Sen. Angus King (I-Maine) pushed back against Bryce, arguing that U.S. natural gas exports were hurting domestic consumers and “literally subsidizing Chinese manufacturing.”
Steven Nalley, the acting administrator of the U.S. Energy Information Administration (EIA), and Tim Gould, the chief energy economist of the International Energy Agency (IEA), also testified.
Nalley told senators that EIA predicts that U.S. crude oil production “will grow significantly in 2022 but still not quite reach the record level of 2019.” He similarly predicted U.S. natural gas production growth of 2 percent during 2021, coupled with an additional 4 percent growth during 2022.
He testified that EIA predicts U.S. gasoline prices will drop “closer to $3 per gallon at the end of this year and continue to gradually decline throughout 2022.”
Average gasoline prices in the United States as of Nov. 18 were $3.414, compared to $2.12 a year ago, according to AAA.
While Nalley attributed this hypothetical future decrease to falling oil prices, he also testified that EIA predicts U.S. production will have decreased slightly in 2021 and that “global oil production … is growing more slowly than consumption,” with the EIA predicting an increase in global oil production of just 2 percent in 2021 before it grows “significantly” through 2022.
Nalley says EIA’s assessments suggest that short-term energy prices and supply-related challenges could pose problems this winter, with heating bills for Americans on pace to rise.
“New England and Southern California, for example, could face regional natural gas delivery challenges,” he added.
Sen. Catherine Cortez Masto (D-N.M.) queried Nalley on the relationship between climate change, extreme weather events, and energy prices, arguing that “the economic costs of climate change are widespread and difficult to predict.”
“There certainly have been situations with hurricanes—Hurricane Ida, for example, that came through the Gulf of Mexico and knocked production offline for an extended period of time—the Texas freeze that happened. There certainly are events throughout the country that are inevitable that happened that caused energy disruption and price impact,” Nalley replied.
IEA: Rising Global Energy Prices Have Little to Do With Renewables
Speaking from the IEA’s perspective, Gould testified that the “rapid economic recovery from the downturn caused by the pandemic” was the chief cause of rising energy prices, adding that “droughts in Brazil, lower than average wind generation in Europe, and various planned and unplanned outages to supply” were also contributors.
“At the IEA, we do not consider that climate policies or clean energy transitions have played a significant role,” Gould told the committee.
Contrary to what Bryce and some other commentators believe, the IEA has consistently maintained that surging global energy prices have little to do with renewables.
In a September statement, IEA experts claimed it is “inaccurate and misleading to lay the responsibility at the door of the clean energy transition.” That very statement also cites “lower-than-usual availability of wind energy” as one factor behind the sharp increase in European natural gas prices.
“Our message today is that this acceleration in energy transitions needs to happen quickly, or we see a looming risk of renewed volatility in the coming years,” Gould testified.
“Raise your hands if you think they ought to go bankrupt,” Barrasso said. He noted that Bryce, the EIA’s Nalley, and the IEA’s Gould didn’t raise their hands.