|August 09, 2016|
What Trump gets wrong about energy in America
|In his economic speech in Detroit Monday, Republican presidential nominee Donald Trump laid out a series of energy proposals that, in stark contrast to those of Hillary Clinton or the Obama administration, would try to shore up traditional industries centered on coal, oil, natural gas.|
The most striking thing about the plan is that it seems premised on a world in which these energy sources don't have this major environmental drawback called climate change. Trump himself has told The Washington Post he is "not a big believer in man-made climate change," and the divide between himself and Clinton on this matter is one of the sharpest policy differences of the present campaign, clearly wider than the split in views between Obama-McCain (2008) or Obama-Romney (2012).
But even setting aside the climate change issue, there are many other oddities about Trump's claims. To hear Trump talk, you'd think the last eight years have been a tough era for U.S. energy (the sector has suffered, he says, under "President Obama's job-killing energy restrictions"), rather than one that saw tremendous growth in alternative, clean energy and similarly dramatic growth in home-grown oil and gas production.
"The Obama-Clinton Administration has blocked and destroyed millions of jobs through their anti-energy regulations, while raising the price of electricity for both families and businesses," Trump said in Detroit, according to a transcript of the prepared speech released by his campaign.
Let's take this piece by piece.
First of all, residential electricity prices haven't risen very much over the course of the Obama administration -- certainly not compared with what they did during the George W. Bush years. According to the U.S. Energy Information Administration, while home electricity prices rose from about 8 cents per kilowatt hour to 12 cents per kilowatt hour between 2002 and 2008, there hasn't been as much growth since then:
Indeed, if you look at the residential price of natural gas --- which heats many U.S. homes --- it shows seasonal variations but has actually declined for residential consumers since 2008, for reasons we'll discuss shortly.
But in any case, the Obama years have largely delivered a benefit to U.S. consumers, not a cost:
Let's turn to the other claim, then --- regarding energy jobs.
Trump claimed in Detroit that Obama-era energy policies have cost a large number of energy jobs. And it is true that the coal industry has been hammered in recent years, showing job losses and the retirement of numerous coal plants. "The Obama-Clinton war on coal has cost Michigan over 50,000 jobs," Trump charged.
But what's causing those coal industry job losses is another matter.
Some of these coal job losses can surely be attributed to Obama policies, such as the Environmental Protection Agency's rule to reduce mercury and other toxins from coal- and oil-fired power plants. But perhaps the major blow to the coal industry has little to do with Obama, but rather, was caused by technology and the free market --- the declining price of natural gas, brought on by the fracking and unconventional gas revolution.
That's right: One of the extractive energy industries in the U.S. has greatly out-competed another one. We are now burning much more gas for electricity, and accordingly, much less coal, for purely economic reasons.
It is important to remember that with Obama's Clean Power Plan --- the main policy from this administration that is disadvantageous to coal, and the one that draws by far the most ire --- you can't really blame that much on it because it is not in effect yet (except in a "writing on the wall" sort of way). Indeed, it is currently under a legal cloud and has an uncertain future.
Moreover, although Trump says coal jobs have been lost, he never mentions that vast numbers of clean energy jobs have been gained, and indeed, this has been part of the whole goal of Obama energy policies.
According to the Solar Foundation, for instance, the solar industry has added 115,000 jobs over the past six years. A recent study in Energy Policy similarly found that while coal lost 50,000 jobs between 2008 and 2012, wind and solar added 79,000 and natural gas added over 94,000.
Not only does Trump not mention renewable energy --- he also didn't mention the struggling nuclear sector in his speech. It's hard to imagine the reason for this omission.
The overall picture for oil and gas production jobs during the Obama administration, meanwhile, is that they rose greatly thanks to the fracking boom, but when the price of oil plunged in late 2014, many jobs were lost --- leaving the overall picture about a wash. Again, though, that's a free market affair, not a result of Obama policy.
So, look: Nobody is saying that coal fared well under Obama. But that is far different from saying that energy jobs or energy prices for consumers saw disastrous trends over the last eight years.
In the end, Trump's negative picture of the energy sector is similar to his dire picture of the economy, which has been criticized for being inaccurately skewed towards the negative. U.S. energy is definitely undergoing major changes. Whether it's in trouble --- that's a much tougher argument.