Institute for Energy Research

The Institute for Energy Research (IER) is a not-for-profit organization that conducts intensive research and analysis on the functions, operations, and government regulation of global energy markets. IER maintains that freely-functioning energy markets provide the most efficient and effective solutions to today’s global energy and environmental challenges and, as such, are critical to the well-being of individuals and society.

Most Recent Articles by Institute for Energy Research:

Economists Mislead on Carbon Tax

Jan 19, 2019 — Institute for Energy Research

We live in strange times indeed when an environmental reporter for the New York Times writes that we should stop pushing for a carbon tax, just a few weeks before dozens of distinguished economists sign a letter to the Wall Street Journal calling for a carbon tax. Yet despite the prestige behind the impressive list of signers, the economists mislead the American public on several key points.

Flaws with a “Green New Deal,” Part 2 of 2

Jan 17, 2019 — Institute for Energy Research

Flaws with a Green New Deal,
One of the hottest topics in policy wonk circles is the “Green New Deal,” spearheaded by the rising star of the progressive Left, Alexandria Ocasio-Cortez. In my previous post, I explained that the entire premise of a current New Deal—whether green, red, or blue—was flawed. Even on standard Keynesian terms, it makes no sense to embark on a $1 trillion government spending program with official unemployment below 4 percent and the Fed raising rates to rein in price inflation. Worse, historically the actual New Deal under Franklin Roosevelt prolonged the nation’s suffering, making the Great Depression linger for a decade. Finally, I pointed out that the supporters of a Green New Deal weren’t merely interested in mitigating climate change: they quite openly announce that they will use the plan as a vehicle for transforming society according to the standard progressive wish list.

Coal Remains a Dominant Global Fuel in IEA Forecasts

Jan 15, 2019 — Institute for Energy Research

Coal Remains a Dominant Global Fuel in IEA Forecasts
The International Energy Agency (IEA) released their 2018 Coal Market Report last month with forecasts through 2023. Coal accounts for 27 percent of total global energy and 38 percent of global electricity generation—the same market share it held in 1998. In 2017, global coal demand increased by 1 percent and electricity generation from coal increased by around 3 percent. IEA’s coal market report includes IEA’s five-year forecasts for global coal supply, demand, and trade, forecasting that global coal demand will remain fairly stable through 2023 as developing economies increase their coal demand, negating decreases by industrialized countries. IEA expects global coal demand to gradually decline from 27 percent to 25 percent, mainly due to growth in renewables and natural gas.

NERC: Rapid Retirement of Coal and Nuclear Units Could Cause Grid Instability

Jan 14, 2019 — Institute for Energy Research

NERC is responsible for reliability of the electric grid
A December 2018 report by the North American Electric Reliability Corporation (NERC) indicates that acceleration of coal and nuclear plant retirements could result in black outs. NERC is an international nonprofit agency that examines and promotes grid reliability among utility systems in the United States and Canada. The agency released its Generation Retirement Scenario—a 44-page report—that found an aggressive rate of coal-fired and nuclear plant retirements could put the electric grid reliability at risk. Grid reliability is the ability of the system to deliver electricity as it is demanded. If electric utilities are not able to meet demand at any given time, a blackout could result. The retiring coal and nuclear power plants generate electricity 24/7, but wind and solar units that are replacing them produce power only intermittently—only when the wind blows and the sun shines—and natural gas units replacing them may not have sufficient infrastructure to ensure availability of the needed fuel.

Fossil Fuels Dominate U.S. Energy Production, But Receive a Small Percentage of Federal Fuel Subsidi

Jan 10, 2019 — Institute for Energy Research

Fossil Fuels Dominate U.S. Energy Production, But Receive a Small Percentage of Federal Fuel Subsidies
At the request of the Secretary of Energy, the Energy Information Administration (EIA), an independent agency of the U.S. Department of Energy, evaluated the energy-related subsidies that the federal government provided in fiscal year 2016, updating a study that it did for fiscal years 2013 and 2010. Federal subsidies to support non-fossil fuels (renewable energy and nuclear power) in fiscal year 2016 totaled $7.047 billion (in 2016 dollars), while those for fossil fuels totaled $489 million—higher by over a factor of 14, despite much higher production by fossil fuel producers. The EIA noted that those subsidies do not include state and local subsidies, mandates, or incentives that in many cases are quite substantial, especially for renewable energy.

California Mandates Zero-Emission Buses

Jan 8, 2019 — Institute for Energy Research

The California Air Resources Board voted unanimously to require that all new buses be carbon-free by 2029, in essence phasing out purchasing any new gas- or diesel-powered buses by 2029 and requiring only zero-emission buses by 2040. The mandate will eventually take an estimated 14,000 gas-powered buses off the roads. California currently has 153 zero-emission buses, most of which are electric, and hundreds more on order. The long lead time on the rule will enable transit agencies to phase out existing buses over their current lifespan of 10-plus years.

Two Energy Futures

Jan 5, 2019 — Institute for Energy Research

Two Energy Futures
There are two energy futures for America. One is freedom and prosperity. The other is politics, conflict, and waste. As with other goods and services, energy’s availability and affordability will depend on whether natural incentives and economic law are respected or hampered by government policy.

India’s Electricity Demand Expected to Explode as Air Conditioning Proliferates

Jan 3, 2019 — Institute for Energy Research

India's Electricity Demand Expected to Explode as Air Conditioning Proliferates
Growing air conditioning use among India’s 1.3 billion people is one of the country’s biggest energy challenges. India is currently the world’s fastest growing market for air conditioners. By 2050, the International Energy Agency projects it will be the largest. If air conditioning use is not made more efficient, electricity consumption from air conditioning in India is expected to increase by a factor of 30 between 2010 and 2030. To avoid escalating electricity demand, the government is counting on more-efficient air conditioners.

Demand is also increasing in other developing countries where climates tend to be hot and incomes and populations are growing. For example, as China’s middle class emerged between 1992 and 2007, homes with air conditioning in many urban areas went from approximately zero to nearly 100 percent. Developing countries, which consumed less than half the world’s energy in 2000, now account for 58 percent. The International Energy Agency projects that they will account for 67 percent by 2040.

U.S. Is Awash with Natural Gas and More Production Is on Its Way

Dec 27, 2018 — Institute for Energy Research

U.S. Is Awash with Natural Gas and More Production Is on Its Way
The Energy Information Administration recently released its reserves report, noting that proven reserves of natural gas increased 36 percent to 464.3 trillion cubic feet—a record that surpasses the previous high set in 2014. Natural gas production in 2017 increased by almost 3 percent from 2016 production levels—another record high. Most of this natural gas is coming from the Marcellus and Utica shale plays in Pennsylvania and neighboring states. Over a decade ago, companies began combining horizontal drilling techniques with hydraulic fracturing to unlock natural gas from shale rock.

Three Cheers for Holiday Lighting! Let It Glow, Let It Grow, Let It Glow

Dec 24, 2018 — Institute for Energy Research

Three Cheers for Holiday Lighting! Let It Glow, Let It Grow, Let It Glow
Environmentalists critical of electrified America must have mixed emotions this time of the year. It may be the season of good cheer and goodwill toward all, but it is also the time of the most conspicuous energy consumption. America the Beautiful is at her best when billions of strung lights turn darkness into magnificent glory, border to border, sea to shining sea.

Holiday lighting is a wondrous social offering—a positive externality in the jargon of economics—given by many to all.

Flaws With a “Green New Deal,” Part 1 of 2

Dec 21, 2018 — Institute for Energy Research

There’s a growing buzz around a “Green New Deal,” spearheaded by newly-elected Alexandria Ocasio-Cortez. Although the details are in flux, currently the draft text calls for the creation of a 15-member “Select Committee for a Green New Deal” that would “have authority to develop a detailed national, industrial, economic mobilization plan” to make the U.S. economy “greenhouse gas emissions neutral.” As if that weren’t ambitious enough, the Select Committee’s detailed national plan would also have the goal “to promote economic and environmental justice and equality.” The draft specifically mentions spending $1 trillion over ten years, in addition to extensive taxes and regulations to steer the economy and society as the 15 committee members see fit. (To be clear, the draft text currently calls for the creation of the select committee, which in turn is then tasked with drafting legislation forming the “Green New Deal” itself.)

In this two-part series I will strongly critique both the spirit and substance of a proposed “Green New Deal.” In the second article, I will focus on the specific proposals in the draft legislation. But in this first piece I will give the historical context and explain why the very notion of a Green New Deal is misguided, because it relies on faulty history and bad economics.

Offshore Energy Exploration: Myth vs. Fact

Dec 21, 2018 — Institute for Energy Research

Myth: There’s not enough energy in the outer continental shelf (OCS) to make exploration worthwhile.

Fact: The Bureau of Ocean Energy Management (BOEM) estimates that the OCS contains 90.55 billion barrels of oil and 327.58 trillion cubic feet of natural gas. These estimates are likely very conservative, as bans on offshore leasing have made it illegal to explore and determine how much more energy is available. In other words, this is just the tip of the iceberg—history has proven that when people are allowed to look for energy, they generally find it. The best way to stop them from finding it is to stop them from looking for it.

IER Sues Treasury For Records On Russian Meddling in U.S. Energy Policy

Dec 21, 2018 — Institute for Energy Research

WASHINGTON —Institute for Energy Research (IER) filed an open records lawsuit against the Department of the Treasury concerning evidence of Russian attempts to influence U.S. energy policy. This Freedom of Information Act (FOIA) suit, filed in the U.S. District Court for the District of Columbia, seeks certain, specific records of Treasury officials as they relate to two congressional oversight reports detailing the apparent Russian campaign to oppose fracking and otherwise promote a “climate agenda” in the U.S. The FOIA request also seeks records related to oversight attempts by one congressional committee that apparently has fallen on deaf ears at Treasury.

American LNG and the Future of Energy in Eastern Europe

Dec 16, 2018 — Institute for Energy Research

On Oct. 17, 2018, Poland’s largest energy company PGNiG signed a contract with two American LNG companies to deliver up to 1 million tons of gas each over the next 20 years. It is the first large U.S. LNG contract in Eastern Europe, and it won’t be the last. Indeed, it is very likely that American LNG companies will become major suppliers to Eastern Europe in the near future.

Are We Finally Free of Fowl Folly and Frog Foolery?

Dec 16, 2018 — Institute for Energy Research

On December 6, the Bureau of Land Management (BLM) unveiled a plan that will likely be one of the most consequential for landowners and energy developers by the Trump administration thus far. That plan? Reforming the resource management plan for the greater sage grouse.

Macron’s Carbon Tax Disaster

Dec 6, 2018 — Institute for Energy Research

Most Americans are probably just hearing about the ongoing protests in France after images of rioting around the Arc de Triomphe in Paris this past weekend finally forced the topic onto the front page. The nationwide protests, now in their third week, had previously garnered little coverage outside France, and what limited mention was made often obscured the source of anger driving the protests with vague references to “rising fuel prices.” Since this weekend, international media has reluctantly gotten closer to identifying the root cause, citing “rising taxes.” But this is not just any old tax protest, it is targeted at a very specific kind of tax: namely, a carbon tax. The protests in France, which despite the focus on Paris have been overwhelmingly peaceful and span the entire country, should be considered another data point in the building backlash to the international green agenda of forcing energy prices higher.

Popular Analysis of the National Climate Assessment Misleads the Public on the Economics of Climate

Nov 30, 2018 — Institute for Energy Research

Popular Analysis of the National Climate Assessment Misleads the Public on the Economics of Climate
The Executive Branch’s recently released Volume II of the National Climate Assessment (NCA) is a massive document that is being cited as yet further evidence that the U.S. government should act quickly and boldly in the fight against climate change. The coverage in the New York Times was typical: “All told, the report says, climate change could slash up to a tenth of gross domestic product by 2100, more than double the losses of the Great Recession a decade ago.”

Canadian Crude Oil Sells at Record Discounts

Nov 9, 2018 — Institute for Energy Research

Canadian Crude Oil Sells at Record Discounts
Canadian crude oil is selling below U.S. West Texas Intermediate crude oil by a record $52.50 per barrel based on records that go back to early 2007. The huge discount is mainly due to a lack of pipeline capacity to move the oil to markets. But, also contributing are growing production from Canada’s oil sands and a reduction in demand due to U.S. refinery maintenance shutdowns.The widening price differentials are costing Canadian producers and governments upward of $40 million a day. A setback for the Canadian oil sector is a court’s overturning the Trans Mountain pipeline expansion approval.

Washington State to Vote on a Carbon Tax Again

Nov 3, 2018 — Institute for Energy Research

Washington State to Vote on a Carbon Tax Again

Washington state’s ballot in 2016 included a provision asking voters if they would approve a carbon tax, but the initiative failed with 59 percent of the voters opposing the measure. This November, the state will try again to solicit favorable votes from the state’s electorate for approval of a tax on carbon dioxide. The carbon tax plan would require fossil-fuel companies to pay $15 per ton of carbon dioxide they release into the atmosphere starting in 2020. The tax would increase by $2 annually (plus inflation) until 2035, when it would reach about $55 per ton. The goal is to reduce greenhouse gas emissions by 20 million metric tons (about 25 percent) by 2035. That would equate to reducing global emissions by 0.02 percent in 2035.

Wind Farms Could Cause Surface Warming

Oct 31, 2018 — Institute for Energy Research

Wind Farms Could Cause Surface Warming
A Harvard University study suggests that, under certain conditions and in the near term, increased wind power could mean more climate warming than would be caused by the use of fossil fuels to generate electricity. The study found that if wind power supplied all U.S. electricity demands, it would warm the surface of the continental United States by 0.24 ˚C, which could significantly exceed the reduction in U.S. warming achieved by decarbonizing the nation’s electricity sector this century—around 0.1 ˚C. The warming effect depends strongly on local weather conditions, as well as the type and placement of the wind turbines.