Publications: Notes at the Margin

Petroleum in the Crosshairs (April 26, 2021)

 

President Biden has announced that the United States will seek to reduce its emissions of global warming gases to fifty percent of the amount discharged in 2005 by 2030. It is an ambitious goal that many believe cannot be achieved. However, various academics and policy wonks have issued reports complete with beautiful graphics that show how the target might be realized. The Wall Street Journal even posted a “do it yourself” computation tool that allowed readers to experiment with different ways to attain the reduction.[1]

 

Our reading of the discussions reveals that most of those considering the issue see the goal as unreachable.[2] A key impediment raised, again and again, is Congress, a problem often overlooked by the environmentalists pushing hard to cut harmful emissions. They should take heed of a “political memo” by Nate Cohn in the April 9 New York Times. Cohn warns that the United States body politic is split in the way that Catholics and Protestants are divided in Ireland. The memo is headlined “Why Political Sectarianism Is a Growing Threat to American Democracy.”[3] Among the shocking findings presented was that “one-third of Americans believe that violence could be justified to achieve political objectives.” Cohn reports that this includes most Republicans. Furthermore, one-third of Republicans and a fifth of Democrats would support secession, an idea floated by the late Rush Limbaugh last December after he declared that “peaceful coexistence” was no longer possible between liberals and conservatives.

 

American sectarianism will have a significant impact on efforts to lower emissions. It will likely block the passage of legislation that would promote the energy transition away from fossil fuels.

 

However, the Biden administration has a tool to make the sought-after reductions: the Renewable Fuel Standard (RFS) enacted under the Energy Policy Act of 2005. Under the RFS, the Environmental Protection Agency’s administrator must soon establish renewable fuel use targets for the years following 2022. Because the law expressly permits the administrator to consider “climate change” in setting the new standards, President Biden could use them to drive down US emissions.

 

The calculations presented in this week's report show that target reduction can be achieved with a fifty-five percent reduction in petroleum-based gasoline use and a thirty-five percent reduction in petroleum-based diesel fuel use by 2030. Price increases for these products, likely tied to a skyrocketing cost of renewable identification numbers or RINS, would produce the desired result.

 

Our “Petroleum in the Crosshairs” title is not a metaphor. The Biden program is taking direct aim at coal and oil. The administration has what it needs to attain its goal without new legislation, although new laws enacted with bipartisan support would be far superior.

 

 

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