The Magazine

The Climate Circus Leaves Town

As traditional energy sources go from doom and gloom to boom.

Apr 29, 2013, Vol. 18, No. 31 • By STEVEN F. HAYWARD
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But it may not have mattered whether these troubles came to the climate campaign. Even if the full-monty doom and gloom case still looked persuasive, the massive and unexpected resurgence of hydrocarbon energy over the last few years has made the green dream of hydrocarbon energy suppression more implausible than ever, chiefly because the “renewable” alternatives are still so much more expensive, inferior in performance, and inadequate to our energy needs. The boom in natural gas production is being accompanied by an equally substantial boom in domestic oil production for the same reason​​—​​advances in directional drilling technology and hydraulic fracturing. 

Domestic oil production has reversed its long slow decline​​—​​heretofore thought irreversible by every public and private forecast​​—​​and is at its highest level in more than 20 years. The International Energy Agency forecasts that the United States is on its way to becoming the world’s top oil producer, without, it is worth noting, opening up the Arctic National Wildlife Refuge or large new areas of offshore reserves that have been the center of contention for the last 30 years. Barack Obama has done what any clever politician would do: claim credit for the boom, even though most of the new activity has occurred on private and state land. Obama’s regulators are still slow-walking permit applications for drilling on federal land. It has to be awfully discouraging for environmentalists to have won most of those access fights but still find U.S. oil production soaring.

The consequences for the U.S. energy picture are staggering. Oil imports have fallen by one-third over the last five years; the sour economy accounts for less than half of this decline. The United States is within striking distance of doing without Middle Eastern oil if it wishes. Although Europe and Asia have lagged the United States in deploying new technology to unlock oil and gas, they are catching up quickly. The “peak oil” hypothesis looks more and more like the population bomb, imminent resource exhaustion, and other busted Malthusian forecasts of the 1970s.

Meanwhile, renewable energy​​—​​wind, solar, and biofuels​​—​​is sputtering everywhere, as one would expect of any product wholly dependent on subsidies in a time of budgetary constraints. Tax credits and subsidies for wind and solar power survived the fiscal cliff deal on January 1, the result of some fancy footwork by renewable lobbyists months before, but aren’t likely to survive much longer. In Europe, subsidies for renewable energy are being cut just about everywhere. Britain, Germany, Italy, Portugal, Spain, the Czech Republic, Romania, Bulgaria, and Poland have all announced cuts in renewable energy subsidies; South Africa, India, and China, too. At the same time, Europe’s carbon emissions trading scheme​​—​​the cornerstone of its climate policy​​—​​is near collapse. On April 16, the European parliament narrowly voted down a last-minute attempt to rescue the sagging carbon-trading system. Most investment banks that jumped on the carbon-trading bandwagon have closed their carbon desks. It may yet survive, but it has almost no enthusiastic support. On top of everything else, coal use in Europe is actually on the rise, some of it imported from the United States.

Despite these relentless setbacks for the climate campaign, environmentalists are not going gentle into this well-lit night, nor will they abandon their decades-old crusade to kill off hydrocarbon energy. The movement is too well funded, and has established ample footholds in the policy machinery stretching down to the local level in the United States. Having a “climate action policy” is de rigueur for just about every self-respecting city council and county commission in the country, typically raising numerous regulatory hurdles for new development. Moreover, the fallback position for the climateers​​—​​Environmental Protection Agency regulation under the Clean Air Act​​—​​is just getting into high gear, though “high gear” for the EPA is an excruciatingly slow process.

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