Whatever the outcome of November’s elections, our economic well being requires that the dysfunctional relationship between the White House and Congress change. Governing needs to replace posturing.
A good place to start is energy policy. The failed energy policies of the past have been well documented. Industrial policy initiatives aimed at energy independence and alternative energy sources have failed, have wasted hundreds of billions of dollars, and have distorted the energy market.
Energy is to the economy what oxygen is to human life. To do its job, it needs to be abundant and affordable. As EU citizens and their leaders are learning, the rush to alternative energy has raised the cost of electricity significantly and caused private investment to migrate elsewhere.
Low energy prices alone are necessary but not sufficient to get the economy moving on a stronger growth track. But as we have seen, high energy prices are a dead weight that slows economic growth.
The Energy Information Administration (EIA) in its annual Outlook forecasts that our energy budget in 2035 will continue to be dominated by oil, natural gas and coal, although coal’s share declines and natural gas’ increases. Fossil energy will provide 73% of our energy, only slightly lower than today. Renewables, mainly solar, wind and biofuels, experience rapid growth but at best will provide about 14% of our energy needs. The EIA forecast is consistent with those by private firms.