If you’re a Democrat, the term “energy policy” may as well have been “environmental policy.”
Should we expand natural gas? Let’s figure out how much this will increase or decrease emissions.
Should we shutter a nuclear plant? Consider the risks of radioactive waste.
Should Congress pass a permitting bill to make it easier to build infrastructure? Time to consider the impact on endangered species.
With the midterms in the rearview, ascendant Democrats face their first major policy opportunity of the new era: the Bipartisan American Affordability and Jobs Act (BAAJA). BAAJA may be the most ambitious regulatory overhaul of our lifetimes, and the debate on the Democratic side about whether to support it has at times seemed mostly focused on its implications for the climate.
BAAJA, which not only has bipartisan congressional support but also the president’s backing, would overhaul federal permitting procedures, set the stage for faster interstate transmission build-out, and curb the ability of judges to block infrastructure projects indefinitely (a concern that extends beyond energy into the realms of industrial policy and public transit). We think that it would be a net positive for the climate. But evaluating this bill solely on its climate impact is like evaluating a car solely on its fuel efficiency, without considering safety, reliability, or cost.
Cheap, clean, and consistent: It’s hard to get all three
Traditionally, energy policy has been a delicate balance between three objectives: affordability, reliability, and sustainability, the so-called “energy trilemma.” Different sources of energy can fare better on any one or two objectives, but they often struggle to excel across all three.
For centuries, energy access has been enabled by the relative affordability of coal energy, at great cost to the physical environment (our air quality). Nuclear power is uniquely clean and reliable, but efforts to affordably construct new capacity have been a historic challenge. Wind and solar fare well on sustainability and on local estimates of affordability, but making that power more reliable when scaled comes with steeper system costs.
For the past two decades, that emphasis has shifted in the Democratic Party, where the dominant paradigm has become sustainability — narrowly understood in terms of restricting fossil fuels to mitigate climate change. Consequential policy decisions have been shaped without sufficient consideration of affordability and reliability goals.
One major example of misplaced priorities came in late 2015, when President Barack Obama determined that the Keystone XL pipeline — which would transport Albertan crude directly through to the plains states, ultimately reaching Gulf Coast refineries — did not serve the national interest and denied its permit. The move was largely driven by pressure from climate activists, who described the project as a “carbon bomb.”
