Column: Forget sound bites, ask candidates about energy
This presidential race is certainly one of the most interesting ones in recent history. There has been much speculation about it, even as to what will happen at the conventions of the two major parties. The positions of the presumptive nominees, unfortunately, have taken a back seat to personalities, sound bites, and intrigue. An issue that should be investigated is energy policy.
One example would be the strength and safety of our energy infrastructure. Natural gas and oil have to be transported from where they are taken from the ground to where they are used or refined. Pipelines are the safest and most efficient way to accomplish this. The Keystone Pipeline would move oil from Canadian oil fields to refineries in Texas. Texas has three of the largest refineries in the United States and these are built for and capable of refining heavy crude oil such as that produced in Canada.
While the Keystone Pipeline met the environmental reviews required by the State Department, and would be much more efficient and safer than transporting oil by truck or rail, it has been blocked by the current administration. According to the current Secretary of State: “The critical factor in my determination was this: moving forward with this project would significantly undermine our ability to continue leading the world in combatting climate change.”
Basically, the determination to deny a permit to allow construction of the pipeline is it would not fit with the administration’s climate change narrative. The consequence of this action is not to deny the refinement of the heavy crude, as it will lead Canada or other countries to build their own refineries, nor the transportation of crude oil as it will move by other means. It will be to raise the cost of gasoline and diesel fuel in the U.S. with the accompanying increase in the cost of all goods that are transported throughout the country.
Another issue is what we will be doing with regard to the generation of electricity. While advances are being made in renewable energy sources, particularly with regard to solar power, and the percentage of electricity that is produced by coal has been declining, Michigan still uses coal for more than 46 percent of its electricity generation. Thus the position of candidates on the use of coal will certainly be of importance to Michigan homes and businesses, particularly since Hillary Clinton has said: “We’re gonna put a lot of coal miners and coal companies outta business.”
The United States recently became the largest oil producing country in the nation. This is in good part due to the revolution in horizontal drilling that greatly improved the efficiency of fracking. This, in turn, has led to a price war that has dropped the price of oil by more than half, with the accompanying fall in the cost of producing goods and in transporting goods and services. Clinton, for instance, said that if she were elected president: “By the time we get through all of my conditions, I do not think there will be many places in America where fracking will continue to take place.”
During this election cycle, rather than get distracted by tweets and sound bites, voters should consider how important energy is to our daily lives and how policies that drive up the cost of electricity and fuel will have an impact on the poor, who spend a substantially greater share of their income on energy than the rest of us.
Gary Wolfram is William Simon Professor of Economics and Public Policy at Hillsdale College.