By Thomas J. Duesterberg
WALL STREET JORNAL
President Biden’s energy program is crystal clear: an allof-government assault on the
domestic fossil-fuel industry to further a green agenda. But its economic and political fallout is a muddled contrast. The Biden plan
distorts or undermines so many
other domestic and international
priorities that it is in dire need of a
midcourse correction.
The administration’s efforts, led
by climate czar John Kerry and propelled by the progressive wing of
Mr. Biden’s coalition, have included
curtailing new leases for drilling,
preventing new pipeline development, and expanding the areas offlimits for production. The Securities
and Exchange Commission has discouraged new financing of fossilfuel projects. New automobile mileage standards and increased
mandates for ethanol blending in
gasoline are part of the program.
Pressure to phase out coal-fired
electricity production and thwart
new mining projects also contribute
to the higher prices deemed the
best tool to force the transition to a
green-energy infrastructure.
To avoid the political brunt of
historically high consumer energy
prices, the administration apparently is considering allowing more
exports of oil by Iran, as it is for
Venezuela. It is also tolerating the
somewhat inconsistent application
of oil and gas embargoes on Russian supplies and increased purchases by China and India.
Despite the urgent global need
to displace supplies of Russian oil
and gas, encouraging domestic production of these fuels isn’t part of
the administration’s response to
Vladimir Putin’s aggression in
Ukraine. And pressure on domestic
production undermines other administration initiatives, such as rebuilding the manufacturing sector,
creating jobs, strengthening supplychain resilience, and weakening
dictatorial adversaries such as Iran
and Venezuela.
On the renewables side of the
ledger, the Biden team is trying to
speed up the adoption of green-energy resources and has proposed
massive tax incentives and subsidies to that end. On June 6 the administration announced a workaround for a dumping investigation
on imported solar panels, giving a
two-year reprieve to imports from
Southeast Asian suppliers. Many of
these are partly owned and supplied by Chinese firms, including
with the basic component of polysilicon from Xinjiang. The U.S. recently passed a law banning direct
imports of polysilicon and other
materials from the province due to
the use of forced labor and other
human-rights abuses. Coupled with
the possible easing of Trump-era
tariffs on Chinese products to combat inflation, such actions directly
benefit China, a country that
hasn’t condemned Mr. Putin’s war.
The Middle Kingdom leads the
world in making solar panels—and
wind turbines. As First Solar, the
only U.S. firm still competitive on
a global scale in photovoltaic solar
panels, commented, the reprieve
on imports from Southeast Asia
“directly undermines [U.S.] solar
manufacturing by giving unfettered
access to China’s state-subsidized
solar companies for the next two
years.”
The administration’s crackdown
on mining projects also disadvantages the U.S. electric-vehicle industry. China, which controls much of
the mineral production needed for
lithium-ion batteries, is ramping up
domestic production of these minerals while buying lithium and cobalt mines in Africa and South
America.
As far as Mr. Biden’s aim to reinvigorate U.S. manufacturing, his energy policy undermines hundreds of
thousands of good jobs in the fossilfuel industry and does little to foster a renewable-energy industry at
home. The administration’s program
may help promote new jobs installing solar heating panels and in
large-scale electric generation
plants, but the underlying hardware
is largely sourced outside the U.S.
with raw materials mined and refined from foreign sources. Last
month there were 54,700 jobs for
solar installers in the U.S., with average wages of $23 an hour. At the
same time, the oil- and gas-extraction industry employed 137,400
workers, who were paid an average
of $45 an hour.
Many U.S. foreign-policy goals are
compromised by the Biden energy
policy. Domestic producers can help
European and other allies limit dependence on Russian energy, while
at the same time preserving U.S. energy independence. And encouraging
domestic production of oil and gas
would spare Washington from compromising with hostile leaders in
Venezuela and Iran. Forgoing domestic production in favor of Saudi
Arabia and other dictatorships also
exacerbates the carbon-emission
problem, as these producers are
largely indifferent to production
methods limiting methane and CO2
leaks. American producers have
made cleaner production a priority.
Devoting more land to ethanol production for blending with gasoline is
also misguided amid shortages of
grain for basic food needs.
A pragmatic understanding of
the overall costs and benefits of the
transition to a green economy at a
time of war and economic challenges would lead to a more coherent policy. It is time for a revised
energy plan.