By Alex Epstein
Contrary to Joe Manchin’s “Build Back Better is dead” rhetoric about the energy/climate deal he just made, the deal contains many of the most destructive elements of the Green New Deal.
Two weeks ago, I praised Senator Joe Manchin for his seemingly courageous opposition to the ruinous Biden anti-fossil-fuel “climate agenda.” I also expressed concern that he would reverse course. Unfortunately, that concern turned out to be prescient, as Manchin has now endorsed an “Inflation Reduction Act” that contains many of the worst elements of “Build Back Better” and even “The Green New Deal.”
There is a good chance that Congress will pass this disastrous bill tomorrow. Let’s do everything we can to oppose it. Manchin in particular is sensitive to criticism from industry and from West Virginia. He is trying to pretend that his new deal is pro-fossil-fuel and has nothing to do with “Build Back Better.” The following points show that this is 100% false. Please share this with friends, colleagues, and especially Representatives and Senators.
- The Manchin deal = The Green New Deal1. More expensive, less reliable electricity via massive solar/wind subsidies.
2. New, costly restrictions on fossil fuels.
3. Billions to left-wing activists
4. Endless favoritism and corruptionTell your reps to stop the Manchin GND!
- Joe Manchin has been pitching the energy/climate deal he just made as a reasonable, pro-fossil-fuel policy totally different from BBB, let alone the GND.”Build Back Better is dead,” he brags.This is a lie. In fact, the Manchin Deal is just a new version of the Green New Deal.¹
- 4 of the worst elements of the GND were:1. Making our grid far more dependent on unreliable solar/wind.
2. Aggressively restricting fossil fuels.
3. Giving billions to left-wing causes.
4. Giving govt limitless, corruption-inducing power.Manchin’s deal contains all 4.
- 1. The Manchin GND makes our grid far more dependent on unreliable solar/wind.
The Manchin deal features massive new subsidies for solar/wind over the next few years, plus $10s of billions in other handouts designed to dramatically increase the % of “unreliables” on our grid.²
- 2. The Manchin GND aggressively restricts fossil fuels.
It includes among other things, new taxes on oil and gas—and, worst of all, granting the Biden EPA essentially unlimited power to restrict fossil fuel projects (via butchering Section 115 of the Clean Air Act).
- 3. The Manchin GND gives billions to left-wing causes.
It includes $billions for undefined “environmental justice.”The WH-commissioned report on EJ is an extreme left-wing wish-list that says we must “sunset investment by 2030 in fossil fuels, plastics…and nuclear energy”!!!³
- 4. The Manchin GND gives govt limitless, corruption-inducing power.
The deal itself has $10s of billions that bureaucrats can allocate arbitrarily. And Manchin’s requested permitting policies would give new, illegitimate powers that are guaranteed to be exercised corruptly.
- Manchin is positioning his deal as a “responsible path forward” in large part because Schumer offered him permitting reform, including faster permitting for some fossil fuel projects, this Fall.But these reforms are 1) not guaranteed, 2) undefined, and 3) corruption-inducing.
- 1. Manchin agreed to a mini-GND on the promise by Schumer to support permitting reform in the Fall. But that promise is not binding on Schumer, let alone the rest of the Democrats in Congress—who are already expressing virulent objections to things such as NEPA reform.⁴
- 2. Schumer’s unenforceable promise for permit reform isn’t even defined. Manchin put out a fairly vague wish-list, and according to E&E News Schumer has been assuring anti-fossil-fuel groups that nothing is set in stone.This is what Manchin considers a “deal”?⁵
- 3. Worst of all, Manchin’s permitting reform wish-list includes two terrible expansions of government power guaranteed to increase corruption: a top 25 list of projects that the President can arbitrarily expedite and a specific provision for a single pipeline in Manchin’s state.
- Manchin’s wish that the President should designate 25 (or more) projects for expedited permitting is an open invitation for massive corruption by all involved in granting privileged status.We need expedited permitting in general, not king-like powers for the President.
- Manchin’s wish that Congress “Complete the Mountain Valley Pipeline”—a single project he cares about—means Congress unconstitutionally usurping Executive power. MVP and other pipelines should be completed due to general permitting reform, not rampant favoritism for one Senator.
- The bottom line: Manchin has agreed to his own version of the Green New Deal in exchange for an unenforceable promise to do something largely undefined, which to the extent it did happen would likely bring about massive corruption.He and other Senators should cancel this deal.
- The Manchin GND’s new solar/wind subsidies + fossil fuel restrictions are guaranteed to worsen the issues Manchin says he cares about most:
2. electricity reliability
4. energy securityAnd do little about global CO2 emissions.⁶
- 1. How solar/wind subsidies + fossil fuel restrictions will worsen price inflationSenator Manchin has rightly expressed extreme concern about price inflation in our economy.The Manchin GND would inevitably increase electricity prices and therefore all prices.
- In Joe Manchin’s comments about solar/wind subsidies and inflation he has expressed concerns about the 100s of billions of dollars these subsidies will cost the government.While that is a valid concern, the far worse consequence is their ruinous effect on electricity prices.⁷
- Rising electricity prices drive price inflation in two basic ways.
1. Increasing the prices Americans pay directly for electricity.
2. Increasing the prices of all goods produced using American electricity.New solar/wind subsidies will inevitably increase electricity prices.
- Every area of the world that has tried using significant amounts of solar and wind has had major problems with rising costs. Germans, to get 37% of their electricity from solar/wind, have doubled their prices—now 3X US prices. And their situation is getting worse fast.⁸
- The reason that solar and wind drive higher electricity prices is simple: because solar and wind can go near-zero at any given time, they don’t replace the costs of reliable power plants—they add to them. That means higher electricity prices—which means higher everything prices.⁹
- Given that we face, in Manchin’s words, an “inflation fire,” with the latest inflation figure at 9.1%, passing price-inflating solar/wind subsidies + FF restrictions should not be on the table, period. Instead we should foster innovation that can bring about cheap alternatives.¹⁰
- Calling the Manchin Green New Deal the “Inflation Reduction Act of 2022” when it is guaranteed to drive up energy prices and therefore all prices, rivals “War is peace” and “Freedom is slavery” for accuracy.
- 2. How solar/wind subsidies + FF restrictions will worsen electricity reliabilityManchin has said “The main thing that we need is…reliability. If not, you’ll have what happened in Texas and what happens in California.”More solar/wind subsidies will make TX and CA the norm.¹¹
- America already has worsening electricity reliability.Not only have we witnessed unprecedented problems in CA and TX, this summer blackout warnings are occurring all around the US.FERC Commissioner Mark Christie puts it bluntly “We’re heading for a reliability crisis.”¹²
- The root cause of the reliability crisis is simple: America is shutting down too many reliable power plants, often to try to cope with the large costs of installing so many unreliable solar panels and wind turbines and the massive new transmission lines they require.
- Since at any given time solar and wind can go near zero, using them as replacements for reliable power plants doesn’t work. For example, TX’s February 2021 disaster was caused by solar/wind disappearing and inadequate investment in reliable power plants and their weatherization.¹³
- Why is America shutting down too many reliable power plants? Two of the chief villains are the subsidies known as the Investment Tax Credit (ITC) and Production Tax Credit (PTC)—the very subsidies the Manchin GND will restore and extend!
- The ITC and PTC pay utilities to shut down or slow down reliable gas, coal, and nuclear power plants whenever the sun shines or the wind blows. This defunds reliable plants, causing many to be shut down and threatening the grid’s future.Extending these subsidies is insanity.
- Don’t fall for the portrayal of solar/wind subsidies as exciting “investments” that will “only” cost 100s of billions of $. By making the electricity grid even more unreliable, they will cost trillions of dollars in reliability costs—driving price inflation even that much more.
- 3. How new solar/wind subsidies + FF restrictions will worsen recessionSenator Manchin has rightly expressed worries about anything that might make “pending recession” worse.Solar/wind subsidies + FF restrictions will worsen any recession via high-cost, unreliable power.¹⁴
- The energy industry is the industry that powers every other industry. The lower cost and more reliable energy is, the better our economy is. The higher cost and less reliable energy is, the worse our economy is.
- At a time of increasing recession risk, it should be unthinkable to support policies that are guaranteed to make electricity—industry’s leading source of energy—more expensive and less reliable.
Yet that’s what the Orwellian “Inflation Reduction Act” insists on.
- 4. How massive new solar/wind subsidies will worsen energy securitySenator Manchin has repeatedly and rightly expressed concerns about “the state of American energy security.”Increasing solar and wind subsidies will inevitably make the situation worse.¹⁵
- The mining and processing of solar/wind-related materials is dominated by China to a staggering degree. The US does little mining or processing of these materials, largely because of “green” restrictions. Our dependence on China for solar/wind dwarfs past mideast oil dependence.¹⁶
- Making our grid even more dependent on China-centered, unreliable solar and wind is a direct sacrifice to China—whose >80% fossil fueled industry (including mostly-coal-powered grid) will profit mightily while holding our security at their mercy.¹⁷
- Do not be fooled by claims that new support for domestic solar/wind production will solve the problem of dependence on China.Because this support does nothing to reduce the “green” restrictions on mining and processing, it will just lead to even more expensive solar/wind.
- “I will not vote to support policies that make the US more dependent on foreign energy and supply chains or risk moving the country closer to the unstable and vulnerable European model of energy we are witnessing today.”
— Joe Manchin
But he and 49 other Senators are about to.¹⁸
- Harming West Virginia the mostSenator Manchin’s statement endorsement of the “Inflation Reduction Act of 2022” contains no mention of the people of West Virginia. Which makes sense because the largest victim of this Act’s many victims will be the economy of West Virginia.
- The evidence is clear: the IRA’s massive solar/wind subsidies + fossil fuel restrictions would worsen inflation, electricity reliability, recession, and energy security.
And West Virginia would suffer the most.
- Low-cost, reliable electricity is one of West Virginia’s great assets. Thanks to its overwhelmingly coal-fired electricity, West Virginia has some of the lowest electricity rates in the country—second only to coal-heavy Kentucky on the East Coast.¹⁹
- Low-cost, reliable electricity saves everyone money and makes WV a hub of industry. The industrial sector uses over 40% of WV’s electricity. Low-cost, reliable electricity also makes WV a major exporter of electricity to its regional grid, meaning more money from other states.²⁰
- West Virginia currently has low electricity costs due to its coal-dominated power grid, which benefits private households as well as industry. But with more subsidized solar and wind this grid will be transformed to a costly, less reliable one like in Texas or California.
- The #1 target of the IRA is US coal. That means its #1 target is West Virginia. A 2019 study by WVU economists found that coal mining and coal-fired power plants generated economic activity of almost $14 billion, employment for over 30,000 West Virginians, and >10% of WV taxes.²¹
- Do not believe claims that magic “green jobs” will make West Virginia better after the IRA destroys the coal industry. “Green jobs” are: 1) unproductive, 2) largely in China, and 3) the cause of job losses in other industries via high energy prices.²²
- The Manchin GND, aka the “Inflation Reduction Act,” would decrease electricity reliability, increase price inflation, worsen recession, weaken energy security, and wreck West Virginia.WV citizens, please demand that Senator Manchin withdraw his support for this disaster.
- The IRA’s pretext of “climate emergency” is totally invalid because while there is “climate change,” there is no “climate emergency.” Fossil fuels actually make us far safer from climate. That’s why climate disaster deaths have decreased 98% over the last century.²³
- The IRA’s pretext of “climate emergency” is also totally invalid because its “emergency” policies of solar/wind subsidies will do nothing to make low-carbon energy cost-competitive—which is the only humane and practical way to lower global CO2 emissions.
- Tomorrow, Joe Manchin and 49 other Senators plan to pass an “inflation reduction act” that’s really a “Manchin GND” due to its support of unreliable electricity, fossil fuel restrictions, leftist causes, and corruption.
We must tell our Senators to stop this. Especially Manchin.
“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.
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2 Senate Democrats – Schumer Statement On Agreement With Senator Manchin To Add Climate Provisions To The FY2022 Budget Reconciliation Legislation And Vote In Senate Next Week
The largest increase in energy consumption and CO2 emissions is projected to come from non-OECD countries, but this might be underestimating future growth potential for the poorest regions in Africa.
U.S. Energy Information Administration – International Energy Outlook 2021, reference case
BDEW Strompreisanalyse Jul 2022
The average US household price in 2020 was $0.1315 per kWh. In California it was $0.2045 per kWh.
U.S. Energy Information Administration Electric Power Annual table 5a
Increasingly, Germany depends on interconnections with neighboring countries. In 2020 the country experienced a sharp increase in electricity imports, while still massively exporting solar and wind overproduction.
Reuters – German power export surplus shrank 46.2% in 2020
Alex Epstein – Talking Points on the Texas Electricity Crisis
Alex Epstein – Talking Points on California Blackouts
Energy Information Administration – Electric Power Annual
“In 2020, West Virginia had the second-lowest average price for electricity, after Kentucky, among states east of the Mississippi River”
U.S. Energy Information Administration – West Virginia State Energy Profile, Analysis
20 U.S. Energy Information Administration – ELECTRICITY DATA BROWSER
“The industrial sector accounts for the largest share of end-use energy consumption in West Virginia, at 45% of the state’s total.”
U.S. Energy Information Administration – West Virginia State Energy Profile, Analysis
Data on disaster deaths come from EM-DAT, CRED / UCLouvain, Brussels, Belgium – www.emdat.be (D. Guha-Sapir).
Population estimates for the 1920s from the Maddison Database 2010 come from the Groningen Growth and Development Centre, Faculty of Economics and Business at University of Groningen. For years not shown, population is assumed to have grown at a steady rate.
Population estimates for the 2010s come from World Bank Data.