We are thankfully living in a time where the world has identified irresponsible energy usage as a major cause of environmental destruction. Most people acknowledge that something has to be done, but we seldom discuss the political factors and implications surrounding such a controversial issue. We are just too busy watching Senator Inhofe build an igloo and name it “Al Gore’s New Home“ as a populist attempt to show how big of a hoax climate change is.
Well, it is not.
So in this column I will try to highlight some of the most ill advised policies I have ever heard in my life (and you know things are bad when a Turkish guy says this) and discuss their potential impact on the world.
The U.S. today converts fossil fuels into electricity at 33 percent efficiency. In simpler words, the U.S. in 2015 throws two thirds of its energy away. Do you know what the efficiency was in 1957? Thirty-three percent. So why hasn’t our efficiency improved? Have we reached our theoretical maximum?
No. It turns out that the potential efficiency of an electricity generation plant is 67 percent. Reaching 67 percent efficiency would be equivalent to burning half the amount of fuel and emitting half the amount of carbon dioxide to get the same amount of energy. So why are we stuck at 33?
First, the U.S. regulatory system allows electric utility companies to pass on any production costs to their customers. So, these companies get to burn twice the amount of fuel and charge twice the amount of money for the same amount of work. Why would they want to change?
Second, in order to improve the efficiency of a generator you need to increase its size. But the U.S. hasn’t significantly expanded or improved its railway infrastructure in the past century. So, even if building bigger and more efficient power generators were economically profitable for utility companies, the massive generators would simply not fit the train tunnels. And which politician, who hopes to be re-elected in a few short years, would want to anger fossil fuel lobbyists and “waste” public funds on such a long-term project of renewing the entire American infrastructure?
Of course, renewable energy is always an option, which is what the federal government tried to use by providing a Production Tax Credit (PTC) to wind energy companies. In 2012, the PTC subsidized the construction of 13,000 wind turbines. But in 2013, Congress voted the PTC down and wind turbine installation dropped a whopping 92 percent, bankrupting many small wind energy companies.
The reason for this instability is partly extensive lobbying carried out by fossil fuel companies who want to get rid of the PTC. But the situation is only worsened by the hidden ambitions of some House Republicans. The Republicans and some of their donors, who want to sell oil internationally, want to lift the ban on oil exports that was placed in the 1970s as a response to the Arab Oil Embargo. But the Democrats are resisting. So the Republicans are using their Congress majority to shut down the PTC as a negotiation tactic against the Democrats by essentially saying, “If you don’t let us export oil, we won’t let you build wind turbines.”
This instability and straight up bad governance not only turns the U.S. energy economy into a highly non-renewable and adamant one, but also forces it to support a global network of authoritarian governments by importing oil from them. The U.S. imports 63 percent of its oil from Mexico and OPEC members like Saudi Arabia, Venezuela and Iraq. If you look at the global freedom index put forth by Freedom House in the past month, you will see that all of these countries are either listed as not free or partly free. In fact, Professor Larry Diamond of Stanford, in his book “Spirit of Democracy,” states that out of the “twenty-three countries whose economies are mostly dominated by oil today: not a single one of them is a democracy.”
Since exporting oil is such a state-run business, the government has a monopoly over the country’s financial interests. This ends up killing the free market and creating a huge wealth inequality between the ruling class and low-income people. And people who are not financially independent typically don’t demand political freedoms. For instance, Saudi Arabia’s government has become so wealthy due to its oil trade with the U.S. that it collects the absolute minimum amount of taxes from its people and uses this as an argument to support its monarchy in a reverse American way: No representation without taxation.
The American government and people must take swift action. Taking measures to improve energy efficiency and further developing renewable energy will not only stop the detrimental effects of climate change, but will also trigger a global trend of cutting down on fossil fuel production and taking power away from dictators who run on oil. The future of this world is too valuable to be dominated by lobbying and cheap political calculations.
Contact Ali Sarilgan at atsarali19 ‘at’ stanford.edu.