Time for Independence from Federal Energy Policies?

Searching through the U.S. Constitution, it’s not clear where power is delegated for today’s various and complex federal energy policies. Defense of the Realm seems plausible, since the U.S. military relies on oil to power it’s aircraft, vehicles, and ships (online sources estimate the military burns 100 million barrels of oil a year).

U.S. military operations in the Middle East have long been justified as protecting access to oil from Saudi Arabia and other suppliers. But as U.S. oil and gas production has increased over the last decade, not much oil is imported and much natural gas is exported. What does (or did) energy “dependence” really mean, as a policy matter? Should the importance of imported oil in the past have been as major a national security concern? (Plus, over 40% of imported oil comes from Canada.)

Economist Art Carden discusses international trade and national security concerns in Is “Energy Independence” a Worthy Goal? (Forbes, March 22, 2019):

But what about national security? Here again, I think it’s a mistake to discourage energy imports or privilege domestic energy production in the name of security. This is so for a couple of reasons. First, there are a lot of people around the world from whom we can buy oil, ethanol, steel, and other goods of strategic importance. Second, oil can be stockpiled as with the 727 million barrel US Strategic Petroleum Reserve. This doesn’t even have to be a government program as commodity investors can store and stockpile oil (or trade futures and options contracts) in anticipation of higher prices caused by supply disruptions. Well-functioning markets for commodities like oil and steel obviate the need for things like “energy independence” or the Strategic Petroleum Reserve.

“Energy Independence” a Worthy Goal? (Forbes, March 22, 2019)

Foreign Policy offers a timeline–from 1859 to 2011–for energy production and national security concerns in Energy Independence: A Short History: A century and a half of an idea whose time has never come (Foreign Policy, January 3, 2012):

Every U.S. president since Richard Nixon has pledged allegiance to the goal of “energy independence,” even as the United States has remained dependent on imported oil.  …

The article’s timeline stops just as U.S. shale production was taking off.

Also on energy independence, and also from 2012 is Ken Green’s Depending on Energy, Not Energy Independent (AEI, December 17, 2012):

As energy expert Robert Bryce notes, “Every U.S. president since Richard Nixon has extolled the need for energy independence. In 1974 Nixon promised it could be achieved within six years. In 1975, Gerald Ford promised it in 10. In 1977 Jimmy Carter warned Americans that the world’s supply of oil would begin running out within a decade or so, and that the energy crisis that was then facing America was ‘the moral equivalent of war.’”

“Energy independence” and its rhetorical companion “energy security” are, however, slippery concepts that are rarely thought through. What is it we want independence from, exactly?

The U.S. is not only a major oil and gas producer (now the largest), but also a major oil processor, with U.S. refineries exporting vast amounts (see charts in article). Exports nearly doubled by 2017.

One federal energy policy was to block oil exports to other countries, again because the federal government so long pursued a policy of “energy independence.”

Here is a history of the Crude Oil Export Ban is here on Ballotpedia, (“implemented in 1975 and lifted in December 2015.”) with arguments by debaters both for and against.

So if national security is no longer considered a strong enough reason to restrict crude oil exports, or to pursue “energy independence” policy goals, should the U.S. continue military policies designed to protect Middle East oil exports (which now go mostly to China and other countries)?

Another arm of past “energy independence” policy goals is the current and costly ethanol program. Converting American-grown corn to ethanol to be burned or blended with gasoline for vehicles was justified in part to reduce dependence on imported oil. Environmentalist also lobbied for ethanol mandates and subsidies as a way to reduce net CO2 emissions. The belief was that growing corn would absorb the CO2 burning ethanol in cars would release to the atmosphere. But it turned out, after additional research, fuel used in planting, harvesting, transporting, processing, transporting again, and blending ethanol released more CO2 than just letting corn flow via markets to hogs and people. Plus additional fertilizer and pesticides used for more intensive corn production used more land and led to more pollution.

Among a great many articles and studies calling for ending federal ethanol programs is Trump’s Support for Ethanol Is Bad for Taxpayers and Their Cars (National Review, January 21, 2016):

Under the 2007 Independence and Security Act, Congress mandated that the United States use 36 billion gallons of biofuels, including corn ethanol and cellulosic biofuel, by 2022.

And the federal government not only requires the use of ethanol; it also subsides it. Tax credits between 1978 and 2012 cost the Treasury as much as $40 billion. Moreover, numerous other federal programs, spanning multiple agencies, allot billions of dollars to ethanol in the form of grants, loan guarantees, tax credits, and other subsidies.

Taxpayers suffer in other ways, too. Vehicles can drive fewer miles per gallon using ethanol blends than they would with pure gasoline. So Americans end up spending an extra $10 billion per year for fuel, the Institute for Energy Research estimates.

And not just ethanol in this biofuels policy mess; consider the economic and environmental damages caused by related biofuels mandates and incentives. See, for example, Palm Oil Was Supposed to Help Save the Planet. Instead It Unleashed a Catastrophe. (New York Times Magazine, November 20, 2018) The article has this long subtitle:

A decade ago, the U.S. mandated the use of vegetable oil in biofuels, leading to industrial-scale deforestation — and a huge spike in carbon emissions.

And… U.S. Forests Are Being Clear-Cut to Supply Biomass Energy Industry, Report Finds (Yale Environment 360, June 18, 2019):

Forests in the U.S. Southeast are being devastated by demand for wood pellets to power biomass energy plants in Europe and Japan …

[the article also quotes] Enviva, the world’s largest wood pellet producer… Enviva said the environmental groups’ report was “full of outdated and outright false assertions, as well as information presented without context in order to intentionally mislead.”…

Many industrialized nations — including the U.S., the UK, Denmark, the Netherlands, South Korea, and Japan — have classified biomass a carbon-neutral source of energy, and have incorporated it as key part of their strategies to reduce emissions and combat climate change. 

Also from National Review: Conservatives Need an Energy Vision (April 26, 2017), which begins:

For conservatives seeking a major victory, a great place to start would be to fix the mess of energy subsidies and regulations that have accumulated over the past eight years. In the years since Barack Obama took office, there were $548 billion in energy and environment regulations finalized, and the projected budget currently estimates at least $250 billion in federal energy subsidies.

Earlier posts have linked to various think tank energy policy proposals. In 3 Takeaways From Trump’s Energy Budget Proposal (Heritage Commentary, March 26, 2019) Katie Tubb notes other ways Department of Energy regulations have entrenched themselves, raising costs and reducing consumer choices:

The Energy Department has routinely implemented policies that distort free competition and choice. 

Take, for example, energy efficiency standards set by the department’s Office of Energy Efficiency and Renewable Energy. The decisions Americans make about their showers, ovens, microwaves, and even lightbulbs are preconditioned by what this office says are “acceptable” choices—namely, those that meet the government’s definition of “energy efficient.” 

It doesn’t matter if you prefer a more durable washing machine, even if it’s a little more energy-intensive. And forget that the premise for the underlying law—the 1970s oil crisis—is obsolete at best, given that today, Americans are sitting on more energy resources of every variety than they know what to do with. 
Such outdated policies continue to force Americans to pay higher prices for basic goods.

3 Takeaways From Trump’s Energy Budget Proposal (Heritage Commentary, March 26, 2019)

This post began with a mention of the U.S. Constitution, wondering where federal energy policy powers might be justified. In Federalism “Collisions” in Energy Policy, (The Regulatory Review, November 19, 2018) looks at conflicting state and federal energy policy regulations. The article notes:

Over the past century, Congress has slowly carved out significant swaths of energy policy for federal control: oil and natural gas exports; automobile fuel economy standards; interstate transmission of electricity; permitting approval and eminent domain for interstate natural gas pipelines; and permitting approval for hydropower facilities and nuclear facilities.

The article covers a range of environmental and energy regulatory policies where state and federal politicians authorities disagree.

State Policies and Electricity Markets: Harmony or Conflict? (NRDC, May 8, 2017) gives the Natural Resources Defense Council, an environmental organization, perspective on federal policy reducing subsidies for renewable energy projects.

Here is Ballotpedia’s page on the Natural Resources Defense Council.

And here is SourceWatch’s page on Ballotpedia…

Here is Capital Research Center’s page on SourceWatch... and DeSmog Blog’s page on Capital Research Center.

Here is Wikipedia’s diversely edited entry United States energy independence.

America’s booming oil and gas production (U.S. oil and gas boom powers nation’s fastest-growing industry, CBS News, February 7, 2019), turns on technology. See Technology Is A Huge Driver Of The U.S. Oil And Gas Boom (Forbes, March 25, 2019).

A benefit of federalism is to have political choices made closer to voters and the people who benefit (or suffer) from those policy choices. Oil and gas drilling is an example. Federal energy policies fasten the same beneficial (or damaging) regulations everywhere. California Vs. Texas: Oil And Natural Gas — Comparing The Two States 1 In 5 Americans Call Home (Forbes, October 29, 2018) looks at what happens when regulatory regimes differ (of course geology differs too). The author begins with the importance of economic freedom:

Policy matters. Even if a nation or state is endowed with significant natural resources, history shows that tax rates, regulatory burdens and rule of law largely determine whether those resources are harnessed or remain idle. Good policies and honest government are why resource-poor nations such as Japan and Singapore far outperform nations with vast natural resources.

Here is the Pacific Research Institute’s 2014 survey, 50 State Index Of Energy Regulation. So… federal or state energy regulations: which are needed, and which are better or worse?