Of the myriad claims being made about energy, the one most in need of debunking is this: The U.S. is losing out to countries such as China and Germany when it comes to “clean energy.”
The notional cure for America’s lagging performance, of course, is more governmental intervention in the energy markets. That intervention, and the need for more clean energy — which, of course, largely means more subsidies for wind and solar power — are inextricably tied to discussions about climate change, carbon-dioxide emissions, and the supposed need for America to lead the way to a new energy future.
While the blather continues, here’s the reality: The U.S. is leading the world in reducing carbon-dioxide emissions. By a mile. Maybe two miles. Meanwhile, China continues leading the world in increasing emissions. And China’s 20-mile lead will continue growing. Furthermore, China continues leading the world in the construction of coal-fired power plants and in overall coal consumption. The latter point was ably made recently by Armond Cohen of the Clean Air Task Force, who reported that in 2014 China’s ability to generate electricity with coal increased by more than three times the rate of growth seen in wind and solar combined.
I’ll come back to Cohen’s findings momentarily. First, a quick review of some of the claims that the U.S. is a laggard. In 2012, during a debate with Mitt Romney in which the issue of clean energy came up, President Obama said that Germany and China are making investments in that sector, “And I’m not going to cede those jobs of the future to those countries.”
In October 2012, in a column published on Forbes.com, Matthew Stepp, of the Information Technology and Innovation Foundation, declared flatly that America is “losing the clean energy trade war with China.”
In 2013, New York Times columnist Thomas Friedman claimed that “clinging to our fossil-fuel past plays to the strengths of Russia and Iran,” and therefore we need a “national clean energy standard.” Friedman closed his piece with a quote from Hal Harvey of a think tank called Energy Innovation, who claimed that “the Germans and the Chinese are already in this clean energy race, and we’re still just talking about it.”
Last month, Bloomberg New Energy Finance reported that China’s clean-energy investments totaled $89.5 billion in 2014, exceeding the $51.8 billion that was invested in that sector here in the U.S.
While China may be spending more than the U.S. on clean energy, the numbers show that the U.S. has made remarkable reductions in carbon-dioxide emissions. According to the BP Statistical Review World Energy, between 2005 and 2013, the U.S. reduced its annual carbon-dioxide emissions by 563 million tons (8.7 percent) per year. How does that compare to Germany and China? Over that same time period, Germany reduced its carbon-dioxide emissions by 40 million tons (4.6 percent) per year. Meanwhile, China has increased its carbon-dioxide emissions by a staggering 3.9 billion tons (70.9 percent) per year.
Thus, over the past decade or so, in spite of the fact that the U.S. doesn’t have a national mandate for renewable energy, we have cut our annual carbon-dioxide emissions more than 14 times as much as Germany. That in itself is remarkable given that Germany has already spent more than $100 billion on renewable-energy subsidies. (And those same subsidies and mandates have resulted in huge electricity price increases for German consumers and industry.)
Now back to Cohen’s findings. And before going further, I should make it clear that I have long respected Cohen. He’s a capable advocate for clean air, and in my discussions with him, I’ve found him to be affable and realistic. And while I disagree with some of the other points he made in his article, particularly regarding the potential for advances in carbon capture and sequestration, Cohen’s fundamental point about China’s energy situation is right on target. Using data from China’s National Energy Administration, Cohen concludes that “the amount of new coal energy added to the China grid last year exceeded new solar energy by 17 times, new wind energy by more than 4 times, and even new hydro by more than 3 times. And, despite having more than 30 new nuclear reactors under construction, China’s new nuclear capability was still a fraction of new coal energy.”
To be specific, Cohen found that last year China’s ability to produce electricity from coal increased by about 240,000 megawatt-hours per year. Its hydro capacity grew by about 65,000 megawatt-hours per year, its wind capacity by about 57,000 megawatt-hours per year, its nuclear capacity by about 42,000 megawatt-hours per year, and its solar capacity by about 14,000 megawatt-hours per year.
Put another way, last year, just the growth in China’s ability to produce electricity from coal was roughly equal to the entire electricity production of Turkey, a country of 75 million people.
For all of the bluster about “green jobs” and clean energy, one fact is indisputable: The U.S. — thanks in part to the shale revolution, and in part to the ongoing innovation that is happening in all facets of energy and power production in America — is in an incredibly enviable position.
While China is choking on its own coal dust, the U.S. commands a wealth of energy resources — from coal and oil to natural gas to uranium to, yes, plenty of sunlight. Those resources, and the ability of thousands of American companies that are motivated by the free market to exploit them, have, in turn, given America an energy-price advantage over nearly every other country in the world. And that low-cost energy has attracted billions of dollars in foreign capital. Chemical companies, steel producers, and fertilizer makers are flocking to the U.S., where they are building new manufacturing facilities and, in turn, creating jobs for Americans.
Domestic companies that are providing alternative-energy options to consumers are also booming. From battery makers such as Aquion Energy to solar-panel producers such as First Solar, the U.S. is providing opportunities for entrepreneurs who wish to bring their products to market. Indeed, when it comes to low-carbon energy in general and non-hydro renewables in particular, we lead the world. The U.S. produces twice as much electricity from nuclear power as does France. As for non-hydro renewables (wind and solar), the U.S. is now producing about 1.1 million barrels of oil equivalent per day. That’s more than any other country in the world, and it’s roughly twice the amount now being produced by Germany.
Just two years after Thomas Friedman claimed that by “clinging” to old-fashioned fuels such as oil and natural gas, the U.S. was playing to “the strengths of Russia and Iran,” those two countries are facing economic ruin. They — as well as the economic basket case now known as the Bolivarian Republic of Venezuela — are in dire straits as a result of their over-reliance on inefficient government-run energy companies and the fact that much of the export revenue those companies generate ends up in the pockets of those countries’ kleptocratic rulers and their cronies.
There are three takeaways here: First, the U.S. is running rings around the rest of the world when it comes to energy. Thanks to the shale revolution and the enormous quantities of oil and gas now being produced here, the U.S. has an energy-price advantage over nearly every other country on the planet.
Second, that same revolution has crushed OPEC’s influence in the oil market. And in doing so, it has dramatically weakened some of America’s most formidable geopolitical rivals.
The final point may not need repeating, but I’ll say it anyway: The claim that America is an energy laggard, in virtually any area, is pure foolishness.