Gerard Scimeca – Chairman, CASE
May 26, 2020
The global plunge in oil prices, instigated by Russia and Saudi Arabia, hit just before Covid-19 ground the world to a halt and paralyzed demand for fossil fuels. As the pandemic’s economic crisis leaves millions of Americans out of work, the industry, now in the early stages of recovery, has another front to contend with.
While it would seem like common sense to cheer the revival of an industry crippled through unprecedented circumstances and currently worth about $181 billion to the U.S. economy by 2018 figures, it has proven a particularly divisive idea in recent weeks. Debate in Congress has raged as certain members push a political agenda to support renewable energy, which represents just 11 percent of the total U.S. energy use.
“Democrats won’t let us fund hospitals or save small businesses unless they get to dust off the Green New Deal,” Senator Mitch McConnell said. South Carolina Democratic Rep. Jim Clyburn, the third ranking Democrat in the House, salivated at how the pandemic crisis is an opportunity to “restructure things to fit our vision.”
That vision clearly entails using the Covid-19 outbreak as an opening to push more green energy programs, tying up stimulus efforts, and turning a blind eye to hundreds of thousands of laid-off workers in the traditional energy sector.
Cities like Houston, Texas, are highly reliant on the gas and oil industry. This city alone could lose as many as 300,000 jobs in the sector as a result of the coronavirus. The oil shale industry, already brought to its knees by the price war between Saudi Arabia and Russia, has seen rising debts, oil well closures and even bankruptcies as it tries to survive both global political turmoil and slack demand due to the coronavirus, headwinds that lead to U.S. oil prices diving below zero for the first time.
Yet, instead of making the sound bet in support of critical existing energy infrastructure, certain politicians are gambling on supplanting this proven commodity with unproven renewables. The move can only be viewed as a purely ideological posture that will undermine the strength and timeline for economic recovery, while abandoning hundreds of thousands of workers ready to get back on the job.
Of course this comes at a time when most Americans have just been socked in the wallet; across the country, over 30 million have lost jobs or been furloughed, with sad expectations of more unemployment yet to be reported. The costly subsidies and infrastructure investments associated with renewable energy bring a burden that will undermine economic recovery and impact American workers’ efforts to regain footing in this crisis.
The so-called ‘Green New Deal’ put forward by hard-left congresswoman Alexandria Ocasio-Cortez could cost as much as $93 trillion according to the American Action Forum. At a time when our nation just accumulated trillions of dollars in debt in federal relief efforts, piling on more debt for unproven and quixotic delusions of a green energy renaissance shouldn’t even be on the table.
Democrats cheered the recent drop in oil prices, but now is not the time to capitalize on losses in favor of pushing green energy. The U.S. oil and gas industries directly employed over 1.1 million people in 2019, and support more than 10 million jobs in total. Rural towns that rely on these industries suffered greatly with the price drop earlier this year, but these communities have demonstrated that they are nothing if not resilient. They’ve proven oil can make a comeback after setbacks in the past, and analysts have noted the US oil industry is ‘poised for a comeback’ yet again.
While there may be volatility in oil prices, this is an unprecedented event and one that can and will be overcome. With the lack of supply and reliability facing the renewables sector, only in the most fanciful fantasies of its most ardent adherents is it ready to take over from traditional energy.
Using Covid-19 as a vehicle to invest in renewable energy is an irresponsible ploy that detracts from the crisis the American people currently face. It will increase national debt, disrupt supply, increase costs for consumers, and leave hundreds of thousands of unemployed Americans vulnerable to prolonged layoffs.
Consumers and communities require affordable, available energy to bounce back from this economic devastation. A recovery effort that neglects American workers and the traditional energy sector we’ve relied on throughout the crisis, in favor of unreliable and unproven renewable energy, will fail both the economy and the American people.
