Bingaman's Energy Bill is a Distraction
Most of the states have established their own clean/renewable energy standards so it’s not clear why we need a national standard. Indeed, if market forces are allowed to drive fuel choice by utilities, the overall portfolio of power generation will become “cleaner” over time without additional federal mandates.
America is fortunate in possessing a practically limitless trove of shale gas that is becoming the fuel of choice for power generation. Though not a completely carbon-free energy source, GHG emissions associated with using natural gas as a boiler fuel are but a fraction of those produced when burning fuel oil or coal. What’s more, natural gas prices are projected to remain low for an extended period.
By contrast, requiring that utilities increase their dependence on wind and solar will have huge impacts on taxpayers. Today, investment and production tax credits amount to $776 for every megawatt of solar and $56 for every megawatt of wind power. What’s more, because these power sources are intermittent, utilities must continue to add gas-fired peaking units to meet demand when the wind isn’t blowing and the sun isn’t shining.
Senator Bingaman’s proposal is a distraction from what should be the focus of energy policy: crafting a comprehensive, domestically-focused strategy that encourages the development of all of our resources, including fossil fuels. For the first time since President Nixon talked about energy independence 40 years ago, we stand at the threshold of achieving this milestone. Building the Keystone XL pipeline, allowing more drilling on federal lands and the Outer Continental Shelf, speeding up the permitting process for shallow- and deep-water drilling in the Gulf of Mexico, and limiting the EPA’s oversight of hydraulic fracturing are important steps that can help get us there.