The first, of course, is our own energy revolution. It’s a supply-side showstopper, the result of entrepreneurs making bold experiments with innovative technologies to unlock oceans of gas bound up in shale rock deep below the surface of everyday towns in America. It’s part of a global renaissance of fossil fuels that also has featured an astonishing increase in global coal consumption.
For the “fish-are-people-too” crowd, this is probably the most inconvenient truth in the entire energy debate. How irritating that fossil energy is not being consigned to the dustbin of history, but is fueling the rise of new civilizations today, much as it birthed our current one several generations ago.
Today, coal, gas and oil account for 82% of global energy use. And in 20 years, their share will be only slightly lower as China and India, together with growing mature economies, power up on abundant fossil fuels, mostly coal. They may prefer solar panels in Sacramento, but people in Mumbai and Mongolia aren’t proud of where their juice is from.
For the U.S., the benefits of its energy revolution have been undeniable. Thanks to hydraulic fracturing and horizontal drilling technologies – the gas industry’s carbon capture moment – the U.S. has gone from an energy deadbeat to a global lender. Some estimate that the shale revolution has entirely offset the decline in global energy production caused by civil wars in Nigeria and Iraq and sanctions on Iran.
To see why, look at the Eagle Ford basin in Texas. It produced 15,000 barrels of crude per day (bpd) in 2010; today it yielded 835,000 bpd in just the first four months of this year. The wind industry has made impressive strides in this period, too, as we’re constantly reminded. But even with our tax dollars subsidizing every dead bird killed in their turbines, the wind industry is like a Segway to the fossil fuel Ferrari.
So much for our energy revolution. To see the other energy revolution, cast your eyes to Deutschland, where a bold experiment with a greener grid is raising expectations among climate change enthusiasts eager to transform the industrial world’s fossil fuel powered economy. German Chancellor Angela Merkel launched Energiewende (“energy transition”), shutting down coal plants and nuclear plants, and literally green lighting renewable fuels to supply 45% of the nation’s electricity by 2025.
But in addition to raising expectations, Energiewende is also raising costs for essential power, making German industry uncompetitive and households poorer. Euros are blowing in the wind, forcing Germany to put the brakes on its ambitious plan to avoid what Merkel’s own finance minister has called “a dramatic deindustrialization.” This is because power prices for companies have jumped 60% in just five years thanks to the subsidies companies must pay to finance the renewable fuel future.
Germany, once hailed by global greens as the model for a renewable energy future, now “is becoming something of an anti-model,” said IHS Vice Chairman and founder Daniel Yergin. “Germany’s current path of increasingly high-cost energy will make the country less competitive, penalize Germany in terms of jobs and industrial investment, and impose a significant cost on the overall economy and household income.” Sound familiar?
Germany’s struggles could be cause for schadenfreunde, their word for privately gloating over the misfortune of others. Except for the fact that the Barack Obama administration wants to force us down this same fateful path. The environmental lobbyists now dictating our government’s energy policy target coal today, but they’ll target natural gas tomorrow, leading us to an economic Stalingrad in the coming harsh winters.
Luke Popovich is a spokesperson for the National Mining Association, the industry’s trade group based in Washington, D.C.
