Can Biden Celebrate Energy Records Achieved In U.S., Both Fossil And Renewables?

Originally published on Forbes.com on March 25, 2024

Record U.S. levels in fossil and renewable energies are impressive, and Houston may become the Silicon Valley of energy, according to Bill Gates.

Joe Manchin is the senior senator from West Virginia, in office since 2010. He created a stir when he opposed the IRA bill when his support was needed to pass it.  The bill was in limbo for several months. Manchin finally relented, and the bill passed in August of 2022. Called the Inflation Reduction Act, it contained funds for all energies, but an enormous amount for renewables of all shades.  Coupled with the previous Infrastructure bill of 2021, this earmarked $479 billion for new energy, clean energy, and climate investment.

Last week, Senator Manchin congratulated President Biden, when he wrote an opinion piece in the Washington Post. Here are a few excerpts:

“I want to congratulate President Biden for the record-breaking energy production we are seeing in America today. The United States is producing more oil, gas, and renewable energy than ever before. We are exporting more fossil fuel energy than we import. Our country has never been more energy-independent than we are today.”

“The United States and its allies need fossil fuels for reliable power. That need cannot be met today with the technologies of tomorrow. Those technologies need more investment to become viable. This is why we made the largest investment in climate and energy technologies in U.S. history…

We shouldn’t be picking winners and losers when the cost of doing so could very well produce rolling brownouts or complete blackouts. We are proving that innovation, not elimination, is the key to energy security. Maintaining that balance—between improving today’s technology and betting on the future — will remain critical for years to come.”

Oil And Gas Production In The U.S.

Let’s take a deeper look at these statements. First, energy independence. In 2023, the U.S. exported a record amount of crude oil—4.1 million barrels per day (MMbpd). The amount has increased every year but once since 2015 when the ban on most crude oil exports was lifted. The bulk of these exports are to Europe and Asia/Oceania. This is a significant fraction of total oil produced in the U.S.—13 MMbpd in 2023 (see chart below). This story is more impressive when realizing the country became energy-independent only in 2020—the first time in over 70 years—and the reason for this success was the revolution in shale oil and gas.

Second, the U.S. ranks number 1 in crude oil production, at 13 MMbpd (Figure 1), followed by Saudi Arabia and Russia.  About 6 MMbpd comes from the mighty Permian basin, the king of oil shales.

Third, gas production in the U.S. has reached a record 102 billion cubic feet per day (Bcfd) in 2023. The U.S. ranks Number 1, followed by Russia then Iran. The Marcellus is the queen of shale gas basins, with the Permian running second.

Fourth, liquefied natural gas (LNG) was banned from exporting until 2015, but since then has entered a golden age, with exports booming up to 14 Bcfd at the end of 2023. LNG is ideal for energy security and necessary for Europe since Russia cut the gas pipeline. Within two years, LNG replaced all the lost gas from Russia. Most of this replacement occurred in one year, the first year of the war in Ukraine. At the end of 2023, Europe took 68% of US exports, while Asia took 19%. Export volumes and wealth from LNG could potentially lead to $100 billion in new LNG developments in the US.

Electricity From Renewables In The U.S. 

Figure 2 shows outputs in GWh in 2023 for the following: wind (425,000) and solar grid power (165,000) essentially at record highs, although these lie far below power from natural gas (1,802,000) and nuclear (775,000) and coal (675,000).

At lower levels of power, biomass is actually falling, while geothermal is steady. Renewables still have a lot to catch up.

Is Climate Security Important Too

Manchin stressed the reliability of energy supplies, meaning energy security, in his words above, and he is right to emphasize this, as the ongoing wars in Ukraine and Gaza have demonstrated. But nowhere does Manchin mention climate security even though this is a huge concern for much of the world now and especially for the future. If Biden were to reply to Manchin’s Opinion post, he would say this, because he believes climate deterioration is absolutely serious. 

It’s accepted that climate security depends on reducing greenhouse gas (GHG) emissions which are incessantly warming the world. The US is the second highest contributor to such emissions, after China. And around 50% of global emissions are coming from the oil and gas industry. So, if climate security is a concern, then oil and gas are complicit.

However, two considerations can ameliorate this climate insecurity. The first one is the so-called killer weather extremes which are blamed for the most damage to human populations—droughts, wildfires, flooding, and hurricanes. On a global basis, the data shows these have not worsened over the past 40-50 years even though Earth’s temperature has risen by 1℃. The fossil fuel industry is responsible for about half the global increases of temperature but not for the killer weather extremes. Therefore, the timing of net-zero emissions by 2050 is not as urgent as has been argued. But the oil and gas industry is complicit in affecting polar icecaps, glaciers, sea levels, and corals, so work needs to continue reducing GHG emissions.

The second consideration is innovation, which Manchin rightly identifies, and the U.S. is progressing in this, but it’s a challenge. Apart from CCS and hydrogen which will blast forward, nuclear fusion appears unlikely. Nuclear fission has Small Modular Reactors (SMRs) on the market, but they may be too expensive. Geothermal energy is promising, but it seems too little, too late.

A clever technique for extracting 700 ℃ heat from hydrogen without burning it has come out of Australia, and may be a clean hydrogen-based alternative to gas- and coal-fired power plants.

Bill Gates, who set up a funding company called Breakthrough Energy Ventures, spoke at CERAWeek last week and also toured Houston and the Gulf Coast visiting some companies he has invested in by way of $130 million in Texas-based energy and climate tech companies since 2015. One of these is Mars Materials who plan to capture carbon from smokestacks or the atmosphere and convert it to carbon fibers.

Gates sees Houston as the Silicon Valley of energy. Many start-ups exist in Houston or have moved there. The workforce is oriented to energy, and smaller companies will have to link up with larger companies that have the know-how to fully develop and to scale up, he said.