Market-driven clean energy trumps ham-handed EPA rules

FLINT, Michigan—Is there any doubt there are already simply too many environmental regulations? A recent government report found that the total regulatory costs in the United States amount to almost $2 trillion annually, twice as much as all individual income taxes collected each year.

Consider EPA’s rule requiring states to reduce carbon dioxide emissions by 30 percent on average by 2030: Compliance will cost a fortune, while destroying an untold number of jobs. The rest of the world isn’t imposing carbon regulations, so the EPA rules make America less competitive internationally while the rest of the world benefits at our expense. Technological innovation is already reducing emissions quicker and more efficiently than heavy-handed government regulation ever could. We must put climate action in the real world of strategies that are more effective and less costly than regulation, which usually results in time-consuming legal challenges. Evidence shows that proper incentives combined with ingenuity, when manifest in companies competing for a share of the market in low-carbon energy, can drive technological advances of world-changing originality and scale. The textbook case is what’s been happening in the production of shale gas. Thanks to the shale revolution, U.S. carbon dioxide emissions have dropped sharply since 2007. Meanwhile, the dramatic increase in natural gas production—which has happened as a result of technological advances in fracking combined with horizontal drilling—turned what had been a gas shortage into a surplus of cheap, low-carbon gas for electricity production, heating and manufacturing. New revolutionary advances in fracking have done more to reduce emissions than any other activity.

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Shale revolution

To grasp the advances taking place in drilling technology, consider the efficiency gains in natural gas production. The amount of natural gas produced per rig in the Marcellus region has increased eight-fold since 2009. New rigs are capable of more lateral boring and drilling more wells per pad, resulting in greater production. Some boring devices can even “walk” short distances to drill a new well. The increased mobility eliminates the time that would have been spent disassembling and reassembling rigs. Advances and efficiency gains in shale production could prove promising for the spread of the shale revolution overseas. Witness China’s eagerness to obtain U.S. assistance developing its own vast shale-gas resources. How about solar energy? Ingenuity and capital are being focused on the development of solar energy, with promising results. The average price for a utility-scale photovoltaic project has dropped more than 50 percent over the last three years, according to the Department of Energy.

Solar energy is now becoming competitive with average grid costs across the country

In fact, solar energy is now becoming competitive with average grid costs across the country. With enough breakthroughs, solar could eventually become a dependable source of electricity. But solar currently accounts for only a tiny fraction of the nation’s electricity generation. Solar and other renewable energy sources alone can’t get us where we need to be soon enough. We need other low-carbon sources, and one of the best options is nuclear power. The environmental movement has done more harm with its opposition to nuclear power than anything else it’s done. This is the kind of irrational thinking that is hampering efforts to address climate change. Zero-carbon nuclear power accounts for nearly two-thirds of America’s emission-free energy, and it’s reliable and affordable. Without nuclear power, it might be impossible to reduce greenhouse emissions significantly. Fortunately, five new reactors are under construction in the U.S., and more are being built and planned in other countries. It is time to end the delusional thinking that moving faster in the direction of heavy-handed government regulation is the best and most cost-effective way to address climate change. Instead, we need to start thinking more realistically about market-based technological solutions to our environmental challenges. In short, approaches that use market-driven innovative technologies would help both the economy and environment, and that’s an outcome that would benefit the United States and the world.