The two most left-leaning presidential candidates, Elizabeth Warren and Bernie Sanders, seem to think that a ban on fracking would help solve the climate crisis. Hydraulic fracturing is a process that has enabled a revolution in the U.S. production of oil and especially natural gas.
Natural gas emits half as much of the planet-warming gas carbon dioxide as does coal. The newfound abundance of natural gas has lowered its price, nearly putting coal out of business. In fact, there’s now a glut of natural gas that has sliced its price nearly in half from a year ago. As a result, gas producers are closing drilling rigs and filing for bankruptcy.
Another negative for natural gas is that power companies are increasingly turning to wind and solar energy, whose prices are rapidly tumbling. Morgan Stanley predicts that the demand for natural gas will fall 13% during the coming decade as utilities move to wind and solar power. A carbon tax could accelerate that switch to renewables, the investment bankers add.
Really, why are these candidates trying to shut down an industry that has already started to shut itself down? There are environmental reasons, understood. Fracking worsens water and air pollution in drilling communities. And natural gas is still a fossil fuel.
But Bill Gates offers a more effective approach to halting the rise in temperatures than going after specific industries. Rather than boycott fossil fuel stocks, which the Microsoft multibillionaire regards as a waste of time, investors should put their money into green technologies. Rich entrepreneurs are already doing that for the good of the environment but also for their bottom lines.
Renewable energy sources have become competitive with fossil fuels because new technology is making them cheaper. For example, petroleum accounts for nearly half of U.S. energy-related carbon emissions, but the ascent of electric cars and trucks threatens to slash its use.
Saudi Aramco produces about 10% of the world’s oil. The Saudis have been selling off the company to investors with the argument that as demand for oil declines, Aramco will survive because its oil is cheap to get at and relatively clean next to that of its competitors.
There are numerous ways to wager that climate-friendly investments will pay off handsomely. Elon Musk famously turned the electric car into a mass-market product. He’s also invested billions in turning out batteries for electric cars but also to store energy for times when the wind isn’t blowing or the sun not shining.
In 2008, Warren Buffett’s Berkshire Hathaway put $232 million in BYD, a maker of rechargeable batteries. The investment is now valued at over $1.5 billion.
Colorado mogul Philip Anschutz expects work to start next year on his TransWest Express, a high-voltage transmission line that will bring wind power from Wyoming to California. Gates himself has poured at least $1 billion into companies like Carbon Engineering, whose mission is to convert carbon dioxides in the air to fuel.
Then there’s Bill Joy, a co-founder of Sun Microsystems. He boasts that his technology investments could do away with half of all greenhouse gas emissions. Good luck to him.
There is political work to do in building incentives to move into a clean-energy economy. Billionaire Democrat Michael Bloomberg has put $500 million into Beyond Carbon, a nonprofit that encourages lobbyists and politicians to build a green agenda at the state and local level.
Given these developments, why would Warren or Sanders or any other politician want to be held responsible, fairly or unfairly, for forcing layoffs in industries already under stress? Better to concentrate on replacements for dirty energy and then boast of the jobs being created.
Froma Harrop is a syndicated columnist.