California's Energy Dreamin'

by Frank Macchiarola

Flanked by four expensive electric vehicles, California Governor Gavin Newsom recently announced the signing of a new executive order.

He promised this action would bring “an abundance of new choices and new technologies” and then proceeded to break some news.

First, he declared, “by 2035 we will eliminate in the State of California the sale of the internal combustion engine.”

Under the auspices of promoting choice and technology, Newsom effectively set in motion the elimination of the most affordable and reliable transportation option for Californians.

It does not take an accountant or an economist to know that life in California is not cheap. Neither is a Tesla. One statistic tells the story: Nearly 80 percent of federal electric vehicle tax credits have been claimed by people making $100,000 or more.

But the governor was not finished. For good measure, he told reporters about his commitment “to phase out fracking” in California.

In the course of a press conference, Newsom set in motion a ban on two of history’s most important technologies responsible for advancing prosperity, enhancing mobility and providing low-cost reliable power while reducing greenhouse gas emissions from electricity generation.

Adding to this extraordinary sleight of hand, some experts estimate the announcement could result in an increase in electricity demand in California of approximately 25 percent over the next 15 years as the Golden State grapples with a power crisis that continues to produce rolling blackouts.

Evidence of Mark Twain’s observation that “genuine humor is replete with wisdom,” the news satire website The Babylon Bee “reported”: “State with No Electricity Orders Everyone to Drive Cars on Electricity.”

A closer look at the two technologies that Governor Newsom seeks to ban in the name of “choice” and “technology” reveals how counterproductive this policy would be if enacted.

Celebrated as one of the greatest achievements in human history, the internal combustion engine enables individual mobility on a mass scale. And it only gets better with time, undergoing advancements that improve its effectiveness and enhance our standard of living 160 years after its invention.

In fact, according to the U.S. Environmental Protection Agency, over the last 30 years, research and development propelled manufacturers to reduce internal combustion engine emissions of criteria pollutants by 99% to comply with EPA emissions standards. The U.S. Department of Energy also found that research and development have led to improvements in engine performance and efficiency.

What better way to stifle this innovation than to propose a ban on the sale of gas-powered vehicles, especially when no clear alternative exists in the competitive marketplace? California’s answer to being only 7 percent of the way to achieving its 2030 electric-vehicle goal is to set an even more unrealistic standard by 2035 of 100 percent.  

Equally troubling is Governor Newsom’s pledge to phase out hydraulic fracturing – better known as fracking.

Hydraulic fracturing and horizonal drilling are responsible for America’s recent shale revolution, which unleashed a doubling of U.S. oil and natural gas production since 2008, while helping reduce our carbon dioxide emissions to generational lows.

Less than a decade ago, President Barack Obama said that, “because of new technologies, because we can now access natural gas we couldn’t access before – in an economic way – we have a supply of natural gas under our feet that can last America nearly 100 years.”

President Obama wasn’t alone. His Energy Secretary, Ernest Moniz, called natural gas “part of the solution,” noting that, “the natural gas boom, in particular, has led to the displacement of high-carbon coal with low-carbon natural gas producing fewer [carbon dioxide] emissions.”

What has this meant for America’s most populous state?

Californians rely on hydraulic fracturing to provide them with affordable and reliable energy. According to the Energy Information Administration, almost two-thirds of California households use natural gas for home heating, and almost half of the state’s utility-scale electricity generation is fueled by natural gas.

Additionally, in 2018 the oil, natural gas and petrochemical industries provided 181,000 direct jobs in California, while contributing $83 billion to the state’s economy.

It is undeniable that hydraulic fracturing has provided significant benefits to California’s economy and environment.

So when politicians promote “innovation” and “choice,” it is crucial to ask whether the policies they are proposing actually match the rhetoric. In the case of Governor Newsom’s ban on innovative technologies, he is putting progress in peril for a neat photo-op.

The oil and natural gas industry remains focused on advancing innovation and we continue to drive solutions in meeting the dual challenge of providing affordable and reliable energy while reducing greenhouse gas emissions. We ask Governor Newsom to step back from this anti-technology proposal and join us in meeting this important challenge.

Frank Macchiarola is the Senior Vice President of Policy, Economics and Regulatory Affairs at the American Petroleum Institute.

This article appeared on the RealClearEnergy website at https://www.realclearenergy.org/articles/2020/10/13/california_energy_dreaming_580493.html


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