W hen it comes to energy policy, our political zeitgeist is rather, shall we say, energized.
During the Democratic National Convention, Pennsylvania governor Josh Shapiro — who presides over one of the nation’s largest energy-producing states — twice called himself an “all-of-the-above energy governor.” Even Republicans sometimes echo this all-of-the-above rhetoric. During a recent press conference, Senator Ted Cruz (R., Texas) celebrated Texas as the “energy capital of the world” because of its all-of-the-above approach to energy policy.
“All-of-the-above” is a favored term among some lawmakers and energy wonks: a politically friendly phrase that seemingly encompasses all energy sources, offering feel-good, pro-market vibes in a space overcrowded by radical climate progressives. Indeed, we need market-oriented strategies to combat industrial policies brought about by Green New Dealism. However, rhetoric in policy advocacy matters. Saying “all-of-the-above” may sound good, but it resembles the collegiate agnosticism one might hold before reading C. S. Lewis: Its ambivalence opens the door for progressive overreach.
Instead, we need to proclaim the good news of reliable and affordable energy. Not all energy sources are equal, but public policy should allow them to compete equally. Specifically, energy regulation should establish source-neutral grid reliability and least-cost procurement standards, enact basic safety measures to protect consumers, and allow private industry to innovate.
Reliable energy sources are baseload sources that supply the constant, uninterrupted power our grid needs and sources that are dispatchable, meaning that grid operators can level them up and down to meet demand. Some examples of these baseload and dispatchable energy sources are coal, natural gas, and nuclear. In contrast, intermittent sources are not reliable because they cannot provide the same power capacity as baseload sources and cannot dispatch to match demand. In cases such as wind and solar power, the weather causes intermittency.
The grid is not designed for large amounts of intermittent sources. These sources increase energy costs by requiring additional grid infrastructure, transmission upgrades, and significant battery capacity to make them more reliable, which take up valuable land and agricultural space. And yet, these power sources still only work when the wind blows and the sun shines, regardless of how much we overbuild. So long as we do not prioritize reliability and affordability, we sacrifice both.
This is precisely what happened at the recent capacity auction for PJM Interconnection, the nation’s largest electrical-grid operator. Prices last year were, on average, $28.92 per megawatt-day. This year, they hit $269.92 per megawatt-day — an 833 percent hike. Exelon, the largest U.S. utility company, anticipates a double-digit increase in energy costs for consumers — as high as 24 percent in some states. Manu Asthana, PJM’s president and CEO, said, “The significantly higher prices in this auction confirm our concerns that the supply/demand balance is tightening.” PJM’s analysis states that part of the increase in prices correlates with the early retirement of reliable power plants that have no equally reliable replacements. Electricity demand is growing, but the capacity to meet that demand is decreasing, in large part owing to “net-zero” policies that subsidize unreliable sources and draconian measures that seek to preclude the use of hydrocarbons.
The Inflation Reduction Act funneled $663 billion in unreliable-energy tax credits in the first year after its passage. Long-term estimates peg the cost of these subsidies at more than $1 trillion by 2032. And while unreliable energy — in the pursuit of net zero — gets the carrot, everything else gets the stick.
In April, the Environmental Protection Agency issued its final rule regarding carbon emissions for some reliable power plants, mandating excessive carbon-capture standards that target existing coal and new natural-gas facilities. The rule mandates 90 percent carbon capture for power-generating facilities by 2032. Considering that current technology can barely achieve 10 percent, these unfeasible requirements will result in plant closures, further jeopardize grid stability, and keep increasing the cost of electricity. Other punitive measures include “cap-and-trade” systems and carbon-pricing. The latest of these schemes include the Regional Greenhouse Gas Initiative (RGGI) and the PROVE IT Act, which effectively create economy-wide energy taxes that punish modern life, increase costs, and decrease reliable energy.
(Important note: Shapiro, the self-avowed “all-of-the-above energy governor,” appealed a Pennsylvania court decision that had ruled the RGGI’s carbon tax unconstitutional. All-of-the-above in practice means Green New Deal.)
Meanwhile, some state-level initiatives offer promising policy alternatives.
In 2021, North Carolina adopted a bipartisan energy bill that would not only prioritize grid reliability and fiscal restraint but also responsibly reduce carbon emissions. Lawmakers crafted a policy to ensure that efforts to reach the state’s emissions goals must maintain or improve grid reliability and adequacy within a least-cost-generation planning framework. This would prevent lawmakers from picking winners and losers. Therefore, the North Carolina model truly makes room for all energy sources so long as they’re competitively priced and can meet reliability benchmarks to keep the lights on.
By avoiding concrete policy goals and undermining federalism, those who employ vague, all-of-the-above rhetoric only feed into the radical, top-down, net-zero ideology. The euphemism concedes ground to policies that seek, ultimately, degrowth and deindustrialization. We cannot placate the side that is committed to jeopardizing American energy security. If we do, we will all-of-the-above our way to a grid-reliability crisis.