Almost nothing could be more important to the future of American workers than access to affordable energy. This is why Vice President Kamala Harris needs to come clean about her energy policy.
Kowtowing to the climate zealots currently running unchecked in the Biden-Harris White House will lead to soaring electricity costs and clobber our country’s ability to compete in the industries of the future such as artificial intelligence.
Harris has reversed herself on a number of issues, but none as critical as her stance on energy and on fracking.
While in 2019 she promised to ban fracking, today her campaign says she’s changed her mind. She hasn’t explained why she flip-flopped. She doesn’t need to; we know she needs to win the Pennsylvania’s electoral votes to win the election, and fracking is a large source of employment and revenues in the Keystone State. Therefore, Harris is playing nice and not threatening to put some 400,000 workers out of the job.
Conservatives don’t believe Harris. Apparently, neither do progressives. Green New Deal enthusiast Sen. Ed Markey (D-Mass.), recently said, “On climate, on abortion, on racial, LGBTQ issues, we are absolutely in agreement on her agenda.” Sen. Bernie Sanders (I-Vt.) said that in walking back many of her progressive positions, Harris was just “doing what she thinks is right in order to win the election.”
In her debate with Donald Trump, Harris touted the record oil production that has occurred during the Biden-Harris administration. And it is true: output recently reached a new high of 13.2 million barrels per day, finally topping the 13 million per day peak recorded when Trump was president. That achievement, however, comes in spite of her and her boss’s efforts, not becuse of them.
We should be producing substantially more oil than we are today, but the Biden-Harris White House has done everything possible to stifle oilfield activity, including putting off limits millions of acres in Alaska’s Arctic National Wildlife Refuge, raising royalties for production on federal lands and slow-walking drilling permits. Industry experts say the resources now unreachable in Alaska alone might boost U.S. output by as much as 1 million barrels per day.
Restricting fossil fuel production in a drive to lower emissions is foolish. Natural gas production (60 percent of which is produced via fracking) has displaced coal to become a greater part of our energy mix, allowing the U.S. to lower emissions, even as many other developed countries have failed to do so.
It is also foolish because it comes at a time when the government is driving the country hard toward electrification, trying to get consumers to switch from gas-powered cars to electric vehicles, steering consumers toward electric appliances and so forth. Climate advocates want the country to feed our electricity needs with renewable energy, but that is not happening fast enough.
Accidents and poor economics have virtually shut down the offshore wind industry, while activists are blocking construction of the new transmission projects that were supposed to connect renewable energy to consumers. The results are electrical grids overwhelmed and increasingly fragile, and rising electricity costs. The cost of electricity barely budged under Trump; under Biden, it has risen by more than 20 percent.
The Biden-Harris energy policy has been very tough on consumers, but the stakes are about to get much higher. Among the most exciting and promising opportunities for innovation and investment are AI and cryptocurrencies, both of which demand huge amounts of electricity. A year ago, the International Energy Agency calculated that data centers and data transmission networks worldwide already were accounting for between 1 and 1.5 percent of total electricity consumption. With the rapid escalation of AI, the increases in demand will become staggering.
In October of last year, an article in Scientific American quoted researcher Alex de Vries, who said, “A continuation of the current trends in AI capacity and adoption are set to lead to NVIDIA shipping 1.5 million AI server units per year by 2027. These 1.5 million servers, running at full capacity, would consume at least 85.4 terawatt-hours of electricity annually — more than what many small countries use in a year.”
And in a forecast published this past January, the IEA projected that global electricity consumption from data centers, artificial intelligence and cryptocurrencies in 2026 would likely be more than twice the amount consumed in 2022, an amount “roughly equivalent to the electricity consumption of Japan.”
Blackstone CEO Steve Schwartzman told investors on an earnings call this summer that the firm had committed $70 billion to data centers. He also said, “The need to provide power for these data centers is a major contributor to an expected 40 percent increase in electricity demand in the United States over the next decade compared to minimal growth in the last decade.”
Participants in these industries may well discover ways to reduce energy consumption, but for now, cheap electricity is essential.
Schwartzman further said that “current expectations are that there will be approximately $1 trillion of capital expenditures in the United States over the next five years to build and facilitate new data centers, with another $1 trillion of capital expenditures outside the United States.”
One of the most popular destinations for those expenditures here in the U.S. is Virginia. Why? Partly because electricity costs in the state are 28 percent below the national average.
Because of our abundant cheap fossil fuels, the U.S. has always enjoyed the competitive edge of lower power costs. That advantage remains. U.S. electricity costs averaged 16 cents per kilowatt hour last year, compared to 47 cents in Ireland, 40 cents in Germany and the U.K. and 28 cents in France.
Kamala Harris could eliminate that advantage, by pursuing high-cost renewable energy and making it even harder to produce U.S. oil and gas. Today, renewables only account for about 21 percent of our total electricity production, while natural gas provides about 43 percent. For the foreseeable future, we will still rely on oil and natural gas.
Kamala Harris needs to explain her energy platform. Will she let climate-obsessed elites price us out of global competition for the industries of the future? Voters deserve to know.
Liz Peek is a former partner of major bracket Wall Street firm Wertheim and Company.