President Trump has pledged a theme of “energy dominance.” It’s not the first time Washington has had this thought. During the years I worked at the Senate Energy and Natural Resources Committee we grappled with this goal. Witness after witness would tell us about the incredible advances public-private R&D was making in fast growing sectors like solar, wind and biofuels.
We knew then these technologies would rule the future. But we knew that incumbent energy companies, with their resources and capital, have an advantage over innovators.
Finding the money to build a new system that can challenge the existing — and already paid for — system, is daunting. In a regulated market like energy, it’s tough to attract investment because the incumbents also have political power.
{mosads}Starting with energy bills in 2005 and 2007, followed by subsequent actions, we provided the regulatory certainty needed to attract investment. The point was to ensure the United States would “dominate” the new energy sectors where there was the most growth.
This lead to long-term market-stabilizing policies like the Renewable Fuel Standard, financing programs for projects and auto manufacturing, tax incentives like the Production Tax Credit, and encouragement of net metering and renewable portfolio standards in the states. These policies gave enough certainty to investors to allow real scale deployments.
And it worked. Job growth in renewable energy has far outpaced the rest of the economy, to say nothing of the stagnant fossil fuel industry. The two fastest growing careers in the United States, according to BLS, are “PV solar installer” and “wind turbine technician.” American companies are serious players in the multi-trillion dollar global clean energy market.
Developing a dominating position in supplying a global clean energy market is a money-making opportunity without parallel. This is why nearly every industrialized country on the planet is pouring resources into winning this race. Investment is pouring into these technologies, and billions will be made. We’re on the cusp of truly dominating every aspect of the 21st Century energy sector.
But the Trump administration is proposing to walk away from the fastest growing parts of this global market, and tie our future to nearly (or currently) bankrupt fossil fuel industries. Utilities from Europe to Asia to the U.S. are walking away from coal, but Trump has made propping up this failing industry the cornerstone of his energy policy. Trump’s solar tariff decision threatens the fastest growing career in America. His own EPA administrator has called for an end to the Production Tax Credit, which has driven booms in wind turbine construction in places like Iowa, Nebraska, Texas and Oklahoma.
But perhaps the most obvious example of embracing the failed past is news of Trump’s personal consideration of “reform” to the Renewable Fuel Standard — which would break a campaign promise to expand biofuels through the RFS. The justification for the fix: A bankrupt refinery, already bailed out once by the Obama administration, and beset by bad business strategy and mismanagement.
The refinery in question, Philadelphia Energy Solutions (PES), was bailed out in 2012 and sold to the Carlyle Group. The deal required PES to make investments that would allow it to comply with the Renewable Fuel Standard.
Instead, they made a risky bet that their lobbyists would instead upend the RFS — market certainty be damned. New analysis from the University of Pennsylvania shows that the plant’s problems have little to do with the RFS, that its Wall Street owners prioritized stronger investments over PES, and that it’s likely doomed no matter what.
Now Trump has a choice: Keep his promise to protect the RFS and ensure certainty, or (again) bailout a broken refinery that has, at best, a dismal future. Betting on failure and eliminating investor certainty in growing industries like biofuels is not the path to “energy dominance.”
The fact is, American technical advances in solar, wind, and biofuels have us poised to upend the ossified energy system and provide the products and technologies global markets are demanding. Every other country has pledged to reduce emissions, and they will need technology to get there. Technology invented here in America should lead the way. The question is, will it be American companies and workers who reap the benefits, or will short-sighted, backward looking policies yield our technology advantage to overseas competitors?
We can achieve “energy dominance,” but only if we’re focused on where global markets are heading when it comes to energy. That future includes clean energy technologies like wind, solar and biofuels. Bailing out commodities of the past like coal, or ancient refineries with bad management, isn’t going to get us there.
Mike Carr is executive director of New Energy America. He previously served as principal deputy assistant secretary for Energy Efficiency and Renewable Energy, and as senior counsel on the Senate Energy and Natural Resources Committee.