The Economist Butchers Reality in Favor of Narrative
The Economist Lexington Oct. 6, 2021
This morning’s Lexington was America’s green energy industry takes on the fossil-fuel lobby. It is fraught with lies, to the level of liar-liar pants on fire. It is also riddled with half-truths, the sleight of hand that magicians are known for. Normally, I dismiss these kinds of articles that seem to come with the territory, but today’s issue is too offensive and I feel compelled to set the record straight. Mind you, all of this comes from a 953-word article…
“Donald Trump, who falsely claimed renewables were expensive”
Donald Trump is more right than wrong, and The Economist is mostly wrong to categorize renewables as anything but expensive. This argument comes down to something invented by Lazard, a group of mostly Ivy League MBAs, coined Levelized Cost of Energy (LCOE). LCOE measures the cost of fuels (USD) per megawatt-hour (mWh, electricity). We will ignore the fact that this metric is comparing disparate fuels, which should make it wholly inadequate to start.
According to Lazard’s dull metric, onshore wind costs just $36.93 per mWh and utility-scale solar costs $30.43. They peg combined-cycle natural gas at $37.11 and coal at $72.78. Therefore, The Economist uses LCOE to (incorrectly) suggest that Trump’s claim is false. However, this is magician-level sleight-of-hand meant to confuse the reader.
The biggest problem with LCOE, absent comparing disparate fuels, is that it doesn’t include the cost of backup generation or the cost of battery storage for intermittent wind and solar. Battery storage’s LCOE is $119.84 per mWh, while offshore wind’s LCOE is a mind-blowing $120.52 (but we’ll ignore that little detail). Combining battery storage with either wind or solar skyrockets the cost of those fuels to $156.77 and $150.27, respectively, being more than 400% more expensive than natural gas. And that still doesn’t account for the cost of backup (thermal) generation.
Truth Rating: Magicians[1]
“He hobbled the solar industry with import tariffs.”
Donald Trump decided to take on China during his presidency, which had for decades taken advantage of the United States in trade. That position lead to a largely effective trade war with China. As a major manufacturer with 24 locations in the United States shared with me on the condition of anonymity, the tariffs worked and they were forced to move their supply chain from China to Mexico. However, these tariffs weren’t targeted at the solar industry. To suggest so is ludicrous.
It is possible that The Economist is referring to specific solar tariffs that were set to expire in 2022 that Trump renewed, as well as bifacial solar tariffs on imported cells and modules that were previously excluded, for which Trump re-instated. The renewables industry sued the Trump administration over these tariffs in 2019. Ironically, The Economist conveniently ignores that the Biden Administration has backed the Trump Administration on this lawsuit this year. It’s wrong to characterize this as a Trump-led issue. Tariffs existed prior to Trump, they continued under Trump, and the Biden Administration has continued them as well.
Truth Rating: liar liar pants on fire![2]
“He opened public land and sea to oil and gas exploration but not to renewables.”
This is patently false. While Trump did reverse many of the Obama-era Department of Interior and Department of Energy policies put into place to stifle the commercial development of oil and gas rights in the United States, that does not mean he didn’t open public land to renewables just because his administration didn’t make similar overtures for them.
The fact is, the Obama Administration set an unprecedented set of rules against oil and gas on federal lands that no president prior to him had taken. Take, for example, that both under the Bush and Clinton Administrations that federal lands were leased at a rate of 3.3 million acres per year, on average. The result of Obama’s unprecedented crackdown led to that normal rate of 3.3 million acres per year being reduced to 1.61 million acres leased per year (while rig counts were nearly 40% higher). This cost the government nearly $1 trillion in lost royalties. Reversing these policies back to non-partisan norms did not preclude renewables from federal lands.
Truth Rating: Liar liar pants on fire!
“Greg Abbott, blamed a catastrophic grid failure in February on intermittent wind power—despite official findings that poorly maintained gas power stations were mostly to blame—and ordered the state regulator to penalise the renewables industry.”
I’ve written about the ERCOT power failures extensively. I won’t duplicate those efforts. To read the day-of, real-time analysis before all the data had been released, you can read The Failures of (ERCOT) Power. For a more nuanced discussion on why The Economist mischaracterizes the situation, please read A Different Take on ERCOT’s Failures which was published both by The Oklahoman and Newsmax.
Truth Rating: Magicians
“Even without subsidies, wind and solar power are often the cheapest new source available”
This claim goes even further than the first Economist claim - that renewables are not expensive – to suggest that wind and solar are cheaper even without subsidies. As already explained, this is misleading at best and largely false.
If wind and solar didn’t rely upon subsidies to be built, then why does the Energy Information Agency willingly admit in their models that no new wind will be built in the United States after the wind subsidies (EIA definition) expire in 2023?
EIA: onshore wind capacity additions die after 2023 when the wind subsidies are set to expire.
Truth Rating: liar liar pants on fire!
“They [wind and solar] are also popular, having created a lot of jobs, especially in Republican states.”
First, they are not popular. As we are seeing across Europe (as well as in the United States), wind and solar are being fought tooth and nail because the people don’t want them anymore. As I provided in Climate as a Public Health Issue, the people of Norway – a “green” and “liberal” country – recently voted overwhelmingly against onshore wind. As a result of its unpopularity, even the Socialist Left party, which had wind turbines on their program in 2013, has changed its tune and now push for a wind farm ban. It’s likely a foreshadowing of things to come in the United States.
It hasn’t helped the cause that Europe is now not so coincidentally experiencing dramatic power reliability issues shortly after mandating the buildout of energy-disparate and intermittent renewables onto their grids, or that European electricity is now three times more expensive than that in the Untied States as a result of those failed policies.
Moreover, The Economist debunks the second half of this statement in its very own words later in the article, “Even where renewables create lots of jobs, they tend to be transient. It takes a lot of workers to build a solar or wind farm, but few to maintain them. Local support for such projects tends therefore to be shallow.”
Truth Rating: Magicians
In contrast to cosseted renewables, it claims to be a preserve of wildcatting free spirits, which is half true, and unsubsidised, which is not.
This is a widely written about topic that not even The Economist has educated itself upon – subsidies. The problem is that everyone has started to define “subsidy” with their own political view of it.
The actual definition of “subsity” in the Dictionary is, ““a sum of money granted by the government to assist a business so that the price of a commodity or service may remain low or competitive.” Stated plainly, the federal government literally hands you money (not to be confused with a tax break). For example, the federal government in May 2015 handed Elon Musk $4.9 billion dollars for his companies. No oil and gas company has received a direct subsidy to my knowledge.
The Energy Information Agency (EIA), however, has chosen to include (a) tax expenditures (b) direct expenditures, (c) research and development, and (d) DOE loan guarantees in its definition of a subsidy. Under this definition, the oil and gas is “subsidized.”
The International Monetary Fund (IMF) chooses to go into the world of crazy with their definition. I’ll spare you, but if you’re interested you can read my more in-depth, 30-minute read article on the subject - How Energy ‘Subsidizes’ the World.
Truth Rating: Magicians
“The renewables industry’s ability to fight back has until recently been limited. It was for years too small to lobby effectively and its diverse technologies made it slow to get organised.”
This narrative plays well… until you start following the money. As reported, the two largest environmental groups in the world – the Environmental Defense Fund (EDF) and the Natural Resources Defense Council (NRDC) – have a combined annual budget of nearly $400 million. This is nearly all spent on those big bad lobbyists and influencing governments. In fact, the popular refrain is that #ExxonKnew and that Exxon has spent tons of money on lobbyists to enforce the status quo. While true they employ lobbyists, just like the NRDC and EDF, it’s laughable to suggest that the renewables industry is a small lobby when one year of the EDF-NRDC budget equals more than 20 years of Exxon’s funding of “climate deniers.”
The NRDC was founded in 1970 and the EDF in 1967, hardly recently. To conflate matters, The Economist seems to ignore The Sierra Club as well, which was founded in 1892. Inconveniently, the Sierra Club, not the fossil fuel lobby, is directly responsible for killing clean-nuclear fuel in the 1970s via Congress and holding up coal generation as it’s replacement. But, sure, let’s blame that on fossil fuels too.
Truth Rating: Liar liar pants on fire!
Conclusion
While the overall question asked in the article is a good one – Renewable energy is growing fastest in convervative states, so why don’t Republicans love it?. The Economist had a great opportunity to provide some interesting insights, but is found left wanting. This critique comes on the heels of me praising their article yesterday too – The Age of Fossil-Fuel Abundance is Dead.
[1] https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf
[2] https://www.greentechmedia.com/articles/read/biden-administration-backs-trump-on-solar-tariff-suit