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Powerless in a Perfect Storm

BY Glenn Spencer
by Glenn Spencer on 6/17/01.

Last month, President Bush released his long-awaited energy strategy. Without even waiting for its publication, environmental special interests went on the attack, skewering the plan for allegedly emphasizing new production of reliable energy over the use of renewables, conservation, and efficiency.

These attacks have taken effect, as Mr. Bush's poll numbers on energy issues have dropped considerably. A large majority of Americans tell pollsters they disapprove of Mr. Bush's handling of energy issues and would prefer to see congressional Democrats lead the way.

What most Americans seem unaware of is that the Bush plan actually devotes significant attention to renewables, conservation, and efficiency. They also seem unaware of the more important fact that relying on these approaches simply cannot keep pace with America's energy needs.

Currently, renewables like solar and wind power provide a mere 2 percent of the U.S. electricity supply. The anti-production crowd doesn't tell us just how they expect this to meet the other 98 percent of demand, but why let facts get in the way of a good argument?

Groups like the Sierra Club are demanding that the White House force power suppliers to use renewables for 20 percent of the electricity generated by 2020. This would lead to a lot of dark nights, since the U.S. Energy Information Agency (EIA) predicts that over the next 20 years - even under the most optimistic of assumptions - renewables will provide less than 5 percent of our electricity supply.

The generous subsidies and tax credits in the Bush plan are unlikely to change this fact. Nor would throwing additional wads of government money at renewables. The reality is that the widespread use of energy sources like solar and wind remains technologically unfeasible for the foreseeable future. As EIA warns, "Projections of large increases in renewable energy use should be viewed with caution."

The only renewable source that actually generates significant quantities of reliable energy is hydropower. Yet, the same groups that want to force us to use renewables also demand that we tear down the dams that currently provide 7 percent of America's electricity.

It seems that if we rely on politically correct renewables, as Mr. Bush's critics would like, there's going to be a lot less energy around. But with enough conservation and efficiency that won't matter, right? Not exactly.

Conservation and efficiency essentially mean the same thing - making a given amount of energy go further. When it comes to getting more bang for the buck, the United States has already taken great strides. In 1949, it took 20,633 British Thermal Units (Btus) of energy to create $1 worth of goods. By 1999, that figure had dropped by nearly 50 percent to 10,884 Btus. Yet even this impressive achievement could not keep pace with the rising demand for energy, which tripled.

There are two reasons why conservation and efficiency have come up short. First, economic growth is predicated on the use of energy and the American economy has grown dramatically. Second, as the economy became more energy efficient, the relative price of energy fell and people used more of it. Without new production and supplies to meet the gap, rolling blackouts would have begun decades ago and real improvements in health, welfare and technology would never have happened.

In fact, the only effective moderator of energy demand seems to be a deteriorating economy. The three recessions of the past 30 years, 1973-75, 1980-82, and 1991, are all associated with actual declines in the use of energy.

Energy is the driving force of the economy and sustains the material well-being Americans take for granted. Over the next 20 years, EIA predicts that we will need about 32 percent more of it than we have today. Given the shortcomings of renewables and the limits of conservation, this energy will necessarily come primarily from traditional sources such as coal, oil, natural gas, hydroelectric, and nuclear. This is a reality, though one that makes some people uncomfortable (and drives down the poll numbers of politicians willing to admit it). It would be irresponsible to assume that we can conserve our way into energy security, or that non-hydro renewables can be brought to full maturation overnight.

This does not mean that there is no place in America's energy future for conservation and renewables. Further work on renewables, preferably by the private sector where most good ideas come from, will ultimately produce reliable, efficient, and cost-effective power. And conservation will continue to play an important role in keeping demand from rising higher than it otherwise would.

The United States has faced energy woes many times in the past. Facing reality, instead of indulging in wishful thinking, will ensure that we weather the current storm.


The author is deputy director of the Center for Environmental Policy at Citizens for a Sound Economy.