Moving away from oil and the new mentality needed for it (and so much more)

Another week and more massive changes have happened with respect to Russia. The US has announced that they and the EU will remove Russia’s favored nation trade status, the goal being to further crush their economy. The US has also banned oil imports from Russia. I thought Biden should hold off on it just last week, but the winds clearly shifted fast on it and holding off was not tenable. Because the US imports so little oil from Russia, it will probably not make a major difference, but if the EU goes through with it that will be a much bigger deal.

To replace oil from Russia, the US is now looking to Venezuela and Saudi Arabia to make up for it. I do not know how I feel about that in all honesty. I think both of those regimes are terrible but we do need to find a way to make up for lost oil from Russia and getting domestic drilling going will take time. In the short run we will need more oil and gas production, but we need to think hard about what comes after that period. What is happening with oil prices should spur a real effort to use less oil and eventually move away from it altogether. Electrifying cars would be a great place to start.

For all the talk of energy independence, in the case of oil it is fantasy. Oil is a global commodity and its price is set by global supply and demand. As long as there are disruptions or fears of disruptions (and there always will be), oil will remain volatile. It does not matter how much oil a country produces. They will always be at the mercy of global forces beyond their control. The only sure way to be insulated from oil shocks is to not use it.

It is not just economically that moving away from oil would be wise, but environmentally, too. Oil is a major contributor to greenhouse gas emissions and so the less it is used the lower those emissions will be. From a national security standpoint, moving away from oil means no longer having to care about OPEC or the Middle East. The only reason anyone cares about either OPEC or the Middle East is because of oil. Take that away and they have nothing. I would love nothing more than to watch the economies of petro states implode and their dictators meet the same end as Nicolae Ceausescu.

Best of all, I would like to see the US leave the Middle East and never think about it again. The single biggest critique I have of US foreign policy over the last 70 years has been the obscene amount of attention the Middle East has gotten. I can count on less than two hands the number of good things that have come from it and I would need all the hands in the world to count the bad things. Leaving that place would improve our foreign policy 1000-fold and allow us to focus our efforts where they belong and that is on China.

How to move away from oil

Moving away from oil would do many great things. It would make worries over gas prices a thing of the past. It would be great environmentally, not just for greenhouse gas emissions, but all emissions that come from refining oil and burning gasoline. If electric cars do become the norm though it will mean the demand for electricity will be much higher. The US really needs to allow for the supply of clean electricity to expand. Unfortunately, there is a lot of red tape standing in the way. We need serious reforms of the National Environmental Policy Act (NEPA).

That law was passed 50 years ago in response to legitimate environmental concerns. Today, however, it is used to tie things up in litigation forever and prevent anything from being built. In practice, it has meant endless environmental reviews of virtually every project imaginable. While that might sound good, it really just means endless paper work and stymies things that would be good for the environment, i.e., transmission lines for renewable energy.

We need more nuclear power and fast. There are currently major regulatory barriers to getting reactors built that need to be addressed. The Nuclear Regulatory Commission has never approved a reactor during its entire existence since the 1970s. It certainly does not help that the Nevada congressional delegation has fought the Yucca Mountain nuclear waste site, which has been a major barrier as well. It is not just traditional reactors that need to be built, but much smaller ones, too. Those have also been stymied by red tape. It is time to cut through that and get moving.

Most immediately, when it comes to nuclear, first do no harm. Last year, the Indian Point nuclear plant in New York was closed. Diablo Canyon, which provides almost 10% of California’s electricity, is scheduled to be closed in 2-3 years. That cannot be allowed to happen. I do not care what it takes to keep existing nuclear plants open, do whatever that is. If that means massive subsidies, great. It is a testament to how serious someone is about climate change what their stance is on nuclear power. Anyone opposed has no right to complain about greenhouse gas emissions. Environmental groups have largely failed that test before. They really should not do it again. They have to decide whether they truly care about reducing greenhouse gas emissions or are just against energy consumption.

Just as NIMBYism is a barrier to nuclear power, it is a barrier to renewables, too. Renewables require the use of transmission lines to get the electricity they produce to far away cities. Often times, environmental groups and activists will oppose those transmission lines. Everything has tradeoffs and renewables are no different. Environmentalists have to decide whether they care more about reducing greenhouse gas emissions or preserving their scenic views.

The problem of NIMBYism effects hydropower, too. While hydropower has limitations because it depends on where rivers are, it can be expanded by transmission lines. That has run into opposition. Just last year, Maine voted decisively to block a transmission line from being built that would have sent electricity generated from hydropower in Quebec to New England. Efforts by states to put up such barriers are unacceptable and the federal government should override them just as they have for oil and gas pipelines. This is a national effort and state NIMBYism cannot be allowed to interfere with it.

We need geothermal, too. While it is most easily accessed in areas near volcanoes, there may be some new drilling technology that could significantly change that. How that works is beyond my expertise to explain, but I think this article does a pretty good job of it. Here’s hoping it works because if it is what its proponents say it is, it would be a massive gamechanger. One thing we could do, at a minimum, is give geothermal the same exemption from NEPA that oil and gas drilling enjoys.

As I always advocate for, we need to reduce zoning laws to allow for more housing to be built, especially in places like California. What does that have to do with reducing oil use? Building more housing means more density. More density means smaller units, which use less energy overall. More density also means shorter commutes to work and more use of public transit. On top of that, because California tends to have very temperate weather, energy use there is much lower than it is in most other places. The more people living there, the less energy will be used.

All of these ideas have one thing in common and that is that they expand the supply of things, whether that is energy or housing. They do not try to reduce demand. That has been a major shortcoming of the environmental movement. The focus has largely been on trying to keep fossil fuels in the ground. That is not a viable approach and is never going to be. Energy is something we need and it can either be clean or not. Trying to focus efforts on things like stopping pipelines from being built does not do anything to support non-fossil fuel energy sources. The focus needs to be on making those things available so they can cost less and replace oil (as well as coal and eventually gas).

I am in favor of raising the gas tax and enacting a carbon tax, but those are not going to happen any time soon, if ever. In any event, they may not even be the best tools to use. In Europe, for example, gas taxes are much higher than in the US, but they still use oil and are at the mercy of global forces. It is not enough to just use less oil. We need to begin moving away from it entirely and only by expanding the supply of electric cars and electricity sources can that happen.

A needed change in mindset

There is a very destructive mindset that is behind NIMBYism no matter which issue it is happening on. That mindset is one of scarcity. It is the belief that there is only so much to go around and that if one person enjoys something that means someone else cannot. It is Malthusian and has been a major source of impediments to building everything from energy to transportation to housing.

If that sounds abstract, this article from The Atlantic gives a very concrete and appalling example of it in practice. It is about a man who is in charge of the group Save Berkeley’s Neighborhoods. What does the group do? They oppose the building of anything that would allow more people to live in the city of Berkeley, California. He openly says that the problem in Berkeley is not that they do not have enough housing, but that they have too many people. His group just successfully prevented UC-Berkeley from increasing its student enrollment, meaning it will now have to reject some students it had accepted. They have simultaneously argued that the school cannot enroll additional students because there is not enough housing and that Berkeley cannot build more housing.

This same jackass has said that if Berkeley did allow more housing to be built that it would look like Jakarta and become a slum. He believes that only he and current residents can enjoy Berkeley and that if anyone else is allowed to move in that will mean they will no longer get to enjoy it. The result is that a city where tons of people want to live is unaffordable for all but a few, has an increasing homelessness problem and students who are hoping to go to one of the best universities in the country will not be able to. All this so a retired investment banker with a second home in New Zealand (where he spends a good chunk of the year) and his fellow NIMBYs can enjoy their scenic views.

Scarcity is inherently a zero-sum game. It is selfish and exclusive. It has taken laws that were passed many decades ago for legitimate environmental reasons and used them to prevent anything from being built and has used them in ways having nothing to do with the environment. It has played into people’s pessimism and fears of any kind of change and used that to benefit incumbents while harming everything and everyone else.

I am very much a subscriber to the idea of abundance. By that I mean the idea that things are not zero-sum and that everyone can come out ahead. That does not mean everything is going to be wonderful and perfect nor does it mean equal outcomes for everyone. What it does mean is that it is possible for everyone to advance and that doing so does not have to deprive anyone else of it. We can all wind up in a good place.  

The key words are possible and can. I am not arguing that pushing for policies that promote abundance will solve every last problem there is. Abundance argues for possibilities while scarcity argues that things cannot happen. Abundance is confident, but uncertain and does not have a fixed view of things while scarcity is certain and views everything as being set in stone.

The idea of abundance says, for example, that if more housing is allowed to be built, it will enable millions of people to affordably live in places where they want to move. If they can do that, their lives and the lives of others around them will improve in a myriad of ways. That improves human well-being not just economically, but socially as well and is environmentally sound, a win-win-win. Another example is if we allow for more sources of clean, cheap energy to be developed, people will enjoy greater economic growth while improving the environment. Abundance says we can all have good things. Scarcity says only some of us can.

Scarcity says that if we have more energy consumption and growth, the environment will have to suffer. Abundance says that is wrong. Scarcity says that the only way we can spend money on young people is if we abandon the elderly and vice-versa. Abundance says that is wrong. Scarcity says that the only way we can increase educational opportunities for some groups of students is to reduce educational opportunities for other groups of students. Abundance says that is wrong.

Abundance does not argue that everything WILL be great for everyone. Things are not set in stone. Abundance argues that things CAN be great for everyone. We can improve everyone’s lot and do not have to compete for a fixed number of things.

The need for abundance is something I intend to write on more. It will be critical to making progress on so many fronts. I would even argue that changing our mindset from one of scarcity to one of abundance is the single best thing we can do to improve our well-being. That includes improvements on everything from housing to healthcare to energy.

For those hoping to learn more about what an abundance agenda might look like, I recommend reading Derek Thompson from The Atlantic. He made it a goal of his to write on that subject beginning this year and has already written several articles on it. He has written extensively about the economy and the pandemic over the last two years. He also started a podcast this year called Plain English with Derek Thompson, which can be found on Spotify. I have listened to several episodes and would definitely recommend it.