Supply-Side Liberals Keep Peddling the Fossil Fuel Fix

Supply-Side Liberals Keep Peddling the Fossil Fuel Fix

Supply-Side Liberals Keep Peddling the Fossil Fuel Fix


As long as they can get away with it, they will continue to invest in fossil fuels,” climate activist Greta Thunberg warned earlier this year. “They will continue to throw people under the bus.” Despite the vast logistical and technological challenges involved in transitioning to a truly green, climate-preserving economy, it has one undeniable sine qua non: society needs to get off of fossil fuels.

It’s a mandate so simple and straightforward that no neoliberal policy wonk can swallow it. You don’t generate clicks, sell books, or accumulate invitations to elite policy confabs by saying things that are commonsensical—especially when the common sense in question endangers powerful interests. Instead, center-left pundits have spent the last year and change urging the environmental left to abandon its rallying cry to “keep it in the ground,” and embrace a so-called energy abundance agenda girded by traditionally right-of-center fixations: deregulation and economic growth.

Central to enabling this agenda is “permitting reform,” shorthand for fast-tracking federal approval for building new energy infrastructure. Many of its most vocal advocates have begun to describe themselves as “supply-side liberals,” adherents of an economic outlook that emphasizes government efforts to boost market capacity and productivity, and arguably includes President Biden among its converts. Their approach to decarbonization involves easing barriers to building clean and dirty infrastructure alike; presumably because that’s the most politically palatable approach, regardless of its insanity as climate policy. Deregulators of the permitting process hang their hat on the hope that new subsidies for clean energy technologies will make them cost-competitive enough to crowd out the old infrastructure, without actually implementing a plan to phase out dirty energy.

Supply-side liberals consider permitting reform to be a novel course correction from a business-constricting brand of environmentalism they consider “outdated.” Yet calls for permitting reform have proliferated at a “speed you almost never see in policy and government,” remarked one apostle of the supply-side liberal gospel, The New York Times’ Ezra Klein. This is unsurprising when you consider how closely this deregulatory impulse, newly championed by the center-left punditocracy, hews to the longtime priorities of the powerful energy lobby.

Supply-side liberals argue that easing general barriers to building energy infrastructure will disproportionately benefit clean energy because more of it needs to be built. But this line of argument rests on a great deal of unfounded faith in the market’s alignment with the demands of rational climate policy. (It also assumes that our political system will eliminate obstacles for renewables as aggressively as it continues to do for oil and gas, and that the powerful oil and gas lobby won’t wield its influence to undercut renewable deployment.) Just because we need more clean energy infrastructure doesn’t mean oil and gas companies aren’t rushing dirty infrastructure projects.

So long as permitting reform proposals draw no qualitative distinctions about the kinds of energy infrastructure we’re building, oil and gas companies will gladly take advantage of it. Liberal supply-siders only reinforce this skewed policy calculus when they put the onus on environmentalists to compromise. Supply-side liberals should instead heed the lessons from a new dialogue over shared principles between solar companies and environmental groups. This alliance makes clear that expediting renewable energy doesn’t have to mollify fossil-fuel interests, or otherwise damage local ecosystems and communities. But liberal supply-siders combine an instinctive skepticism of environmentalists with a deep deference to corporate interests. It’s fitting, then, that the emergence of the liberal supply-side consensus on climate policy was rooted in a strategic alignment with a lawmaker who operates as a wholly owned subsidiary of the fossil fuel industry.

Last year, a loose coalition of pundits began cranking out think pieces on why the left needed to embrace Senator Joe Manchin’s proposed loosening of the existing permitting regime. As a longtime recipient of major donations from the fossil fuel industry (and coal baron himself), Manchin wanted federal regulators to rubber- stamp new fossil fuel infrastructure along with enhancing federal authority to site transmission facilities. In the spring, as House Republicans wielded the threat of government default to extract policy concessions, Biden’s compromise legislation to raise the debt ceiling included the center-right’s desired limits on environmental review, a plan to advance Manchin’s favored Mountain Valley Pipeline—a fracked gas boondoggle—in his home state of West Virginia, and none of the center-left’s desired transmission reforms.

Predictably, supply-side liberals blamed the debacle on environmentalists. Robinson Meyer, executive editor of the neoliberal climate policy site Heatmap, told Ezra Klein he saw it as a “failure on the part of, let’s say, the environmental coalition writ large to have the courage to have this conversation.” (That the Republicans who held the global economy hostage for leverage were hardly civil interlocutors in the permitting conversation, or that the White House voluntarily tied its own hands by ruling out its other options on avoiding government default, went unmentioned.) In reality, the left has been having the permitting conversation—it’s just come to different conclusions. One outcome of those conversations is a report from the Climate and Community Project and Roosevelt Institute outlining the barriers to rapid clean energy deployment, and proposing policy options for expediting a just energy transition. This joint report found that permitting reform is far from the panacea that supply-side liberals take it to be.

“Too much of the debate around rapid deployment has hinged on permitting, when the transition is mired elsewhere in the development process,” the researchers concluded. “In fact, much of the advocacy around permitting reform has come from the fossil fuel industry looking to streamline permitting processes for its polluting infrastructures.”

It should not be surprising that the fossil fuel industry stoked calls for permitting reform, or that it benefited from them. Indeed, the main weakness of supply-side liberalism is its penchant for dreaming up new incentives aimed at coaxing private companies to voluntarily realize public policy ends. This basic confusion of means and ends lets the all-too-plain interests of private actors in the energy sector go unexamined in order to justify policies undercut by those same interests. With support for permitting reform still a major plank of energy policymaking in Congress, it’s more urgent than ever to give a clear accounting of how those interests actually undermine the goal of climate change mitigation.

Klein has echoed the Inflation Reduction Act’s corporate detractors, noting that “there is this concern that adding these standards on top of a task that is already so difficult, makes it that much less likely that the task is achieved.” Meanwhile, many corporations are doing everything they can to weaken those standards, jeopardizing achieving the task. The Biden administration is offering tens of billions in uncapped tax credits for “clean” hydrogen production, while industry players are lobbying hard to keep what qualifies as “clean” hydrogen as weak and manipulable as possible. And though carbon capture projects have failed to deliver, companies are happy to take more money to continue adopting them—after successfully lobbying to loosen federal standards for how much carbon they actually have to capture.

As catastrophic as this miscalculation of viable remedies to climate change has been, the continued appeasement of fossil fuel interests in the name of savvy compromise is worse. Today, there are four proposed oil export terminals that, if approved, would cumulatively emit three times what the United States currently emits each year. There’s the stratospheric rise of US liquified natural gas (LNG) exports, with the United States transforming from a non-player to the world’s largest LNG exporter in under a decade. The Energy Information Administration is forecasting that US natural gas production and LNG exports will grow through 2050, and a rapid increase in companies signing long-term LNG contracts, like Cheniere’s recent deal to export LNG to Germany’s BASF through 2043, is locking us into this nightmare scenario.

Projects like these flourished after Russia invaded Ukraine. That encroachment on European oil and gas supplies ushered in an alarming oil and gas boom with a rush of new capital expenditures. This is an especially fraught step backward because fossil energy production’s total lifetime costs skew heavily toward upfront capital expenditures, rather than toward ongoing operating expenses. Once fossil fuel companies invest in building new operations, they have a strong financial incentive to continue operating them for their full lifespans. On the flip side, delaying the construction of such capital-intensive infrastructure ensures that a serious transition into clean energy becomes that much more cost-competitive. This makes the obstructionist tactics of environmental protesters seeking to delay fossil fuel projects not only moral but financially strategic as well.

Unfortunately, the White House has gladly taken the cover offered by supply-side liberals to embrace politically expedient half-measures that rely upon and reward the same companies responsible for destabilizing our climate. As John Podesta, Biden’s senior adviser for clean energy and implementation, explained on the first anniversary of the Inflation Reduction Act, “We stopped asking the question of what do we need to shut down to tackle the climate crisis, and started asking what do we need to build.” Building is indeed important—but building is only half of it. Some things just need shutting down.

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