When did the Wall Street Journal give up on making coherent arguments? It certainly seems to be the case with a recent WSJ article entitled, “The U.S. Is Forfeiting the Clean-Energy Race to China”. The premise of the article, as you might have guessed, is that the U.S. will lose out to China if it does not match China’s level of subsidization of clean energy. No where in the article did the authors ask, “Is it a race worth winning?” I contend that it isn’t.
The authors start out by asserting that,
The rapid pace of EV adoption in China and elsewhere casts a long shadow over oil demand. Natural gas will be burned for decades, but increasingly competitive solar panels and batteries might sap how much of it the world will need.
Do the authors think that a reader will jump at that bait? There is no oil or gas producer losing any sleep over competition from E.V.s, solar panels, or batteries. The authors have created a strawman.
They go on to state,
China installed 277 gigawatts of wind and solar capacity in the first seven months of the year, quadruple the utility-scale additions federal analysts in the U.S. project across all power sources for 2025. That could give China a big advantage in the power-hungry AI race.
The implication being that wind and solar capacity is compatible with the energy needs of AI datacenters, which is not the case for those who have tried and failed with just such a scheme (see Tech Titan’s Quest for Net Zero).
At this point, the authors pull out the big guns and quote Wally Adeyemo, former deputy Treasury secretary under President Joe Biden, stating that countries across the world “are going to be even more reliant on Chinese technology to power their economies, to make the cars they drive,” — I guess that might be true if they are foolhardy enough to permit net zero ambitions to take precedence over economic growth and national security. In which case, they deserve to be beholden to the Chinese.
The next statement of the authors is a clumsy attempt to lead the reader to a desired conclusion. They state that “geology shaped the diverging strategies of the superpowers. The U.S. is rich in oil and gas, while China relies on imports.” They desire for the reader to infer that China has no other choice than to turn toward renewables, batteries, and EVs. However, they overlook the possibility that China could substitute imports of gas and oil with domestic production of synthetic fuel (syngas) from coal gasification. Like so many journalists, their historical time horizon is limited.
The next statement in their article is incipiently stupid. They write,
Even as Chinese companies continued to erect coal plants, billions of dollars of subsidies flowed to such companies as JinkoSolar and the battery maker Contemporary Amperex Technology, also known as CATL. Innovation followed. Both companies said they strive for innovation, and it is common for governments around the world to provide subsidies to emerging industries.
Imagine that. If you ask companies, they will tell you that they strive for innovation. More to the point, when does a government stop providing subsidies to an emerging industry? When it is five years old, maybe ten years old, how about 20 years old? As noted economist Milton Friedman once observed, emerging industries that receive subsidies never seem to grow up (see Will Clean Energy ever grow up?).
There is more of the same until we get to one concern the authors raise. They caution that, “Bart Groothuis, a Dutch member of the European Parliament, is among those worried that inverters —devices that connect wind and solar farms to the grid—made in China could be controlled remotely to disable power networks.” It is a valid concern, but if the recent Spanish blackout taught us anything, it is that inverters have a way of disconnecting inadvertently without any external prodding.
The authors end with a quote from Jonah Goldman of the investment firm Generate Capital: “If you went to bed the day before [Biden’s climate law] was passed and woke up yesterday, you’d still believe the transition is happening,” I am going to take that statement as a direct reference to Joe Biden’s semi-conscious state over the last four years and agree.
With the quality of WSJ articles circling the drain, I have to ask myself, why do I still have a subscription to it?
Image from Grok.