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The Only Post-Election U.S. Energy Solution

by | published November 8th, 2016

As the more than half of the electorate who didn’t vote early goes to the polls today, an exhausted nation looks forward to the end of the nastiest campaign season in my lifetime.

Unfortunately, the divides that overshadowed this election will remain regardless of who wins, as will the rancor and mistrust. “Divided We Stand” will continue to be our national mantra.

And that’s really sad, because it didn’t use to be this way…

Even amid partisan and ideological differences, America has generally been quite civil about selecting its leaders. I used to feel it each time I cast my ballot: “These guys are actually allowing me to participate in the greatest exercise in self-government ever devised.”

Well, that feeling has been ebbing away over the past several election cycles – and has virtually disappeared this time around.

Now, the gridlock will continue regardless of who wins the Presidency. A Clinton White House will likely face a Republican Congress, while a Trump victory would place him in opposition to the Republican Congressional leadership he has openly rejected.

Any policy changes will be difficult to push through in that environment. Energy policy is no exception.

Here, Clinton wants to emphasize renewables, while Trump has been supporting accelerated U.S. oil and natural gas drilling. Yet the reality, at least short to medium-term, lies elsewhere.

You see, it’s not about emphasis. It’s about perspective.

As you’ve seen here in Oil & Energy Investor before, there is only one energy solution, not only for the nation’s energy needs…

But also for our current economic and political situation…

We Need to Expand Our Energy Balance

That solution is to expand the energy balance.

I have often said here in Oil & Energy Investor that this has never been a search for a silver bullet to wean us from dependence upon crude oil. Not only is this unrealistic, but it also cripples the American workforce, and kills local economies from California through Texas to Pennsylvania, as well as the national market as a whole.

Now, we can’t just keep using current energy sources regardless of consequences. But, as we’ve known for some time now, the requirements of national security need to be coordinated with the demands of individual income security.

Back when the U.S. still overwhelmingly relied on foreign oil, that meant an emphasis on supporting renewables. This has continued even after huge domestic shale and tight oil and gas reserves were discovered.

This is not about replacing which energy source is dominant on a whim. Markets left to their own devices do a rather good job of eventually making those decisions for us. In some places, efficiency becomes the driving force. In others, it is reliability. In others still, maintaining employment and income flow may take precedence, even if that means higher prices or environmental tradeoffs.

I am certainly not saying that one of these always needs to reign supreme. Instead, what is important is how the transition is managed…

Compromise, Not Winner-Takes-All, is Needed

That the use of coal to generate electricity is rapidly giving way to natural gas, solar, wind power, even to geothermal and biomass in some locations, does not mean it is best to pursue a zero-sum approach where benefit can be derived only at the expense of others.

Frankly, we have had too much of that kind of rhetoric on way too many issues during this campaign.

Proponents of relying on renewables point to the expanding grid parity emerging, where using solar and wind costs the same as employing more traditional sources like coal. Meanwhile, supporters of nuclear and hydropower point to the low costs per energy unit of those sources.

On the other side, defenders of oil and gas drilling point out the economic hardship created by closing fields. The same argument is heard when the subject turns to coal extraction. In both cases, we have huge domestic reserves.

For others, it’s the environmental impact of fossil fuels that’s more important than any other factor… even the price for end-users.

Now, politics, especially of the democratic variety, is supposed to be the art of compromise. Yet that seems these days to be something in short supply. So I would suggest we look at what is best for the market and economy as a whole…

Every Energy Source Comes With Its Own Drawbacks

Solar and wind may be the up and coming sources of energy, with costs tumbling fast. But they still require backup from more traditional ways of generating electricity. Despite advances in electric and gas powered vehicles, oil products remain dominant in transport.

And despite the cheapness of nuclear and hydro, these facilities are very expensive to build, and take years to finish.

So we are left with the same position I have advanced for the past several years. It has two parts. First, the objective must be to expand the energy balance, made up of a rising number of different and independent energy sources.

This diversity would also increase national security, by not making us overly reliant on a single fuel or technology.

Of course, having energy sources be interchangeable isn’t always possible. And that’s where the second part of my plan comes in…

While you can’t run a car using a hydroelectric dam or a nuclear reactor, you can use the power generated by those (and by every other source of power) in an electric vehicle. And you get some environmental advantages to boot.

Now, however we slice it, dislocation will come. Towns in West Virginia are tied to coal, in Pennsylvania to shale gas, in West Texas to crude oil, in Arizona to solar, and so on. Whether we like it or not, towns relying on a single resource or technology are at risk of economic upheaval.

But we can minimize the downside for them, and for all of us, through this one simple approach: Introduce a gamut of energy choices. And wherever possible, integrate them.

Let’s hope whoever wins today can get that done.

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  1. Paul Livingston
    November 8th, 2016 at 16:52 | #1

    The solution is the free market system. Economic and political engineering do not work. It enable special interests, lobbyists and politicians to pick the winners and losers. It leads to crony capitalism. Spending doesn’t drive the economy. Production and saving drive the economy and our present tax code is based on taxing production, investment and savings. You have to save to build capital, and capital is necessary for everything…even to buy and to spend.

  2. Douglas S. Scott
    November 12th, 2016 at 12:48 | #2

    This American election has turned the City Folks against the rural Country Folks. City Democrat against Country Democrat and Republican.
    President elect Trump has a large challenge while waking up Rural Country Voters who new Washington wasn’t looking after them or even cared about what they thought he created a giant wave of white who believe America was built on the backs of there fathers and grand fathers. That wars were fought and won and liberty and free speech and Democracy is America and the American Way. The City Folk are takers that adhere to Bank Fraud, Political Fraud, and Big Business Fraud. President Elect Trump gave these working people a new hope. Here comes a billionaire who won the Republican nomination because of hard work and dedication to a cause and his cash while city folks laughed and joked along with the press about this clown, racist, sexist, with no chance winning a Presidency and becoming the most powerful person in the world. Guess what he did and now the City Folks want to cause an up rising which they are doing with the mass rallies in major cities. Poor losers fueled by the press who got it wrong. Why did the Press fail all these City Folk with the popular polls BECAUSE THEY FORGOT ABOUT RURAL AMERICA AND THE WORKING MAN AND HIS HOPES AND DREAMS. Know one poled him or her in the small towns where Trump went with his message LETS MAKE AMERICA GREAT AGAIN. I won’t forget you I will get you good paying jobs by opening our coal mines, getting our farms producing using Americas goods and services building American wealth with hard work. Stopping illegal immigrants from staying in America but welcoming people with due process. The Country Folk welcomed this person even though he is a sexist, racist, and wealthy Man he is bringing needed change to a crumbling society. President Elect Trump brings the hope of wealth with new jobs, new faces in politics and not the same old promises that Clinton brought to the election. America will heal the divide with prosperity by working hard at jobs,with using American natural resources, with increased education in making the use of these resources environmentally friendly. The coal industry can burn coal and meet all of Kyoto policy the technology is here and has been here but no one in politics were listening. America has been a leader in industry and will be again.
    Of this I have little Doubt! To the Democrats who are Americans you have four years to rebuild your party from within get all your protesters to fill your coffers with fresh money and new ideas and don’t sit on the side lines while the Republicans rebuild America under President Trump. Stop crying and start rebuilding.
    Trump out worked Hilary Clinton as Trump out worked all his Republican opponents on his way to being President. To the Press I say stop your whining and bitching and your negative approach and start preaching the positives. The Press can play a major part in healing the wounds. The Press and The Polling Companies will not forget Middle America again.

    Douglas S Scott

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