Bipartisan deals are often impossible, but on permitting it’s totally possible—because permitting delays kill projects that members of both parties deeply care about.

• There are at least 4 areas that both Democrats and Republicans should be eager to aggressively reform
  
  1) NEPA

  2) Clean Water Act

  3) Permitting certainty

  4) Electric transmission

Why aggressive NEPA reform is bipartisan

• Why aggressive National Environmental Policy Act (NEPA) reform is bipartisan
  
  1) It unleashes big projects both parties care about

  2) It poses no threat to environmental quality

• NEPA was supposed to be a short and non-binding bonus review to confirm that agencies considered the environmental impacts of projects before permitting them.

  
  Today, the bonus environmental review required by NEPA is abused to delay and destroy projects through endless review.

• NEPA bonus reviews are the #1 blocker of big projects in America—not only typical Republican priorities (power plants, pipelines), but typical Democrat priorities (solar/wind farms, transmission lines) and substantially bipartisan priorities (nuclear plants, geothermal plants).

• Since the bonus environmental reviews required by NEPA are on top of the environmental reviews already required by law, NEPA reform does not threaten environmental quality.

  
  In fact, NEPA reform speeds up projects that improve environmental quality, e.g., wildfire mitigation.

• Key NEPA reforms that both parties should support

  • Stop courts from killing projects for alleged deficiencies in bonus reviews

  • Clarify that bonus reviews have no power to overturn agency decisions

  • Only review direct impacts

  
  (All these are in the House-passed SPEED Act)

Why aggressive Clean Water Act reform is bipartisan

• Why aggressive Clean Water Act Reform is bipartisan
  
  1) It helps both electric transmission lines and natural gas pipelines

  2) It lowers electricity prices

  3) It poses no threat to water quality

• The Clean Water Act was supposed to protect waterways from dangerous emissions of liquids and solids.

  
  Today, it being abused to stop interstate natural gas pipelines and electric transmission lines that don’t even emit liquids or solids.

• The Clean Water Act is known as the #1 blocker of natural gas pipelines (a Republican focus).

  
  But if not reformed, it may soon also block transmission lines (a Democrat focus) through an arbitrary state “certification” process that can kill any water-crossing infrastructure.

• The Clean Water Act is making electricity unaffordable by creating shortages of natural gas, the leading fuel on our grid (a fact that, like it or not, will not change anytime soon).

  
  Reforming it will lower electricity prices and home heating prices, a bipartisan priority.

• A common concern, especially among Democrats, is that Clean Water Act reform threatens water quality.

  
  But neither natural gas pipelines nor transmission lines emit liquids or solids that endanger water quality! CWA can be reformed with no decrease in water quality whatsoever.

• Key Clean Water Act reforms that both parties should support

  • Streamline the multiple onerous federal water quality review processes

  • Limit the scope of state “certification” of the federal process to real water quality threats

  
  (These are in the House-passed PERMIT Act)

Why permitting certainty is bipartisan

• Why permitting certainty is bipartisan
  
  1) It protects projects both parties care about

  2) It still blocks any genuinely unlawful project

• A permit is supposed to certify that a project is legal and give it a green light.
  
  Today, permits are treated as revocable at will, with each new administration canceling projects it dislikes.

  
  This is disastrous for investment because it means no project is ever truly secure.

• Democrats are focused on permitting certainty because Trump has pulled permits from wind/solar projects.

  
  But Republicans also wanted permitting certainty when Biden retroactively suspended oil and gas leases in Alaska and canceled leases for the Twin Metals mine in MN.

• A common concern is that permitting certainty would prevent unlawful projects from being stopped if a genuine violation is discovered after a permit is granted.

  
  It wouldn’t. Courts retain the power to immediately halt projects that are found to be truly unlawful or dangerous.

• Key permitting certainty reforms that both parties should support

  • Only courts, not agencies, can stop permitted projects and only if they violate the law

  • Set hard deadlines at every stage of the permitting process, with consequences for missing them (as in the FREEDOM Act)

Why Federal Power Act reform is bipartisan

• Why Federal Power Act reform of transmission policy, if done properly, is bipartisan
  
  1) It helps affordability

  2) It helps reliability

  3) It helps the growth of American industry

• Both parties have legitimate objections to today’s transmission policy.

  
  Democrats say it’s too hard to get new transmission built. Republicans say it’s too easy to force ratepayers to fund wasteful transmission.

  
  The solution: make it easier to build cost-effective transmission.

• It’s currently nearly impossible to build interstate transmission lines because states often veto them to protect utilities from competition.

  
  Democrats are proposing to address this by giving FERC “siting authority” to approve interstate transmission lines over state objections.

• Easing transmission permitting is dangerous because ratepayers are forced to pay for it.

  
  Republicans fear that under today’s weak standards for assigning transmission costs to ratepayers, allowing FERC to approve lines could unleash wasteful transmission at ratepayers’ expense.

• The key electric transmission reform that both parties should support

  
  Allow FERC to authorize and force ratepayers to pay for transmission lines over state objections if and only if the transmission line demonstrably saves customers more money than it costs.

• Tell your Representative, Democrat or Republican, that if they want your vote in the midterm elections they must support a bipartisan permitting deal that aggressively reforms at least 1) NEPA, 2) the Clean Water Act, 3) permitting certainty, and 4) electric transmission policy.

Michelle Hung contributed to this piece.

Share

Questions about this article? Ask AlexAI, my chatbot for energy and climate answers:

Try AlexAI for free

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

Subscribe now

Share Energy Talking Points by Alex Epstein

Below, I share my testimony on 5 key issues related to energy and China, followed by a Q&A with Representatives on ideas from the new book I’m working on, The Moral Case for AI.

1. China’s chief advantage over the US in energy and everything else is far greater industrial freedom

2. China is expanding its reliable power by building new coal plants

3. China is using solar as a fuel saver for reliable power and selling it to us

4. America’s attempt to use solar as a reliable power source via subsidies and mandates has been a total disaster

5. We need a radical increase in industrial freedom

Rep. Eric Burlison (R-MO-7):

We have Mr. Alex Epstein, who is a philosopher and energy expert who argues that human flourishing should be the guiding principle of energy and environmental progress. And with that, I want to turn it over to you gentlemen and provide you with an opportunity to provide your opening remarks.

Alex Epstein

I have five points I want to introduce and then happy to answer any questions about them. But to me, these are the five points, at least most relevant to energy and China.

1: China’s chief advantage over the US in energy and everything else is far greater industrial freedom

Point number one is China’s chief advantage over the US in energy and everything else is far greater industrial freedom. So we’re often taught that, well, China has an advantage because they’re willing to spend more, they’re willing to dictate things. But America has proven in the past that by far the best “industrial policy” is freedom with property rights.

To give you a sense of how powerful this is in the 1870s, the first long distance pipeline built in the US, the Tide-Water Pipeline went from conception to completion safely in 6 months. You cannot do that with a yoga studio, or upgrading a yoga studio, in America today.

So what’s happened is not that we’re too free and we need to adopt anti-freedom things in any way, it’s that we are radically less free than China. Basically, your ability to build things is overwhelmingly a function of how quickly you can go from idea to execution. In the United States, our entire permitting system makes that basically impossible.

And so if we’re at all serious about being a country in the future, competing with China, etc., we need radical permitting reform and this should be bipartisan.

We need to aggressively reform NEPA, National Environmental Policy Act. So that’s something that, it was originally supposed to just do a bonus review for projects, so just follow the laws and then just do a bonus review. And now the bonus review can literally kill projects, or activists can sue over the bonus review and delay a project for 5 years. So NEPA needs radical reform. This affects projects Republicans care about and Democrats care about.

The Clean Water Act in its current state is an atrocity. It targets both gas pipelines and transmission lines as a menace to water quality. Guess what gas pipelines and electric transmission lines have in common? They literally cannot meaningfully contaminate the water because they don’t have any liquids or solids to go in the water. And yet the State of New York and others routinely kill these things in the name of fake justifications like “turbidity.”

Do people know what “turbidity” means? It means temporarily muddy water. So that’s what we’re destroying our economy for and that’s why we have way too high natural gas prices because we can’t build pipelines to take our abundant gas to market because we’re afraid of muddy water. And at the same time, New York is constantly creating a thousand times as much muddy water just to keep their ports clear. So Clean Water Act is a disaster. Republicans and Democrats should agree on this.

Now we have a more contentious one for today’s Republicans: permitting certainty. The idea that once you get a permit, it should be a real permit. It should be final. Presidents love to deny permitting certainty. So we had Biden killing Twin Metals, killing oil and gas projects. Now President Trump likes to use it to stop wind. Both parties have to recognize that you cannot be a real country if the president can revoke permits at will. We need permitting certainty. It should be bipartisan.

So number one is China’s chief advantage over the US’s far greater industrial freedom. If we don’t at minimum radically reform NEPA, Clean Water Act, and have permitting certainty in permitting legislation—we’ve got a very short clock to do that—you can’t seriously talk about competing with China.

2: China is expanding its reliable power by building new coal plants

Okay, number two is China is expanding its reliable power by building new coal plants. So there’s a mythology that China is winning on industrial electricity because they’re adopting solar. So this is a misunderstanding of what is happening. If you look at China, they’re always building new coal plants, they have a lot of coal plants in the pipeline, and they’re using a lot of solar at the same time.

What’s happening here? What they’re using the coal plants for is reliable power, what you can call “capacity.” So the ability to generate electricity when needed in the exact quantity needed. “Baseload” is actually not quite the right term, but what you really need is just dispatchable, reliable power, whether it’s baseload or it’s flexible.

Because when you have a peak event like Storm Fern, you don’t just need the base load. You need the flexible peak power. And what we saw during Storm Fern is something I’ve said for years, which is solar and wind can go near zero at any given time.

3: China is using solar as a fuel saver for reliable power and selling it to us

Solar and wind, this is point three, do have a use and China is making use of it, but they’re not using it as reliable power. They’re using it as a fuel saver for reliable power.

So solar and wind, you should not think of as real power sources. You should think of them as fuel savers. When the sun shines and the wind blows, you can save gas, you can save coal. And in countries with really expensive fuel, that can make a lot of sense.

Now, guess what? The United States does not have really expensive fuel, so most of our solar and wind is a complete just burning of money and harming our grid. But in general, we should be open to solar and wind when the fuel savings outweigh the cost of the panels and turbines of the transmission and the distribution, which again in the US is rarely the case and would be even rarer if we had good permitting policy.

But with China, it makes more sense because they don’t have all the same domestic resources. And for solar, they’re not only saving fuel with solar, but they have the solar industry where they’re making quite a bit of money selling us solar panels that we’re way overspending on.

Okay, so their advantage is industrial freedom, that’s point one. Point two is they’re expanding their reliable power through new coal plants. Number three is they’re using solar as a fuel saver for reliable power, not reliable power itself, and they’re selling it to us.

4: America’s attempt to use solar as a reliable power source via subsidies and mandates has been a total disaster

And number four, and this relates to the Big Beautiful Bill, America’s attempt to use solar as a reliable power source via subsidies and mandates has been a total disaster.

So we have preferred solar in all these different ways. We’ve subsidized it. Fortunately, the new subsidies at least have come to an end. We still have 10 years more of some of the wind subsidies in the pipeline. So we didn’t kill enough of those, but still it’s a lot better, but we’re doing that.

The markets don’t impose any penalty for unreliability, so we have huge problems with electricity markets, and many states still mandate large amounts of solar and wind through what are called “Renewable Portfolio Standards,” so we have all of these preferences. And at the same time, we have all these punishments on fossil fuels.

So what happens? We are artificially lowering the supply of reliable electricity. And at the same time, we’re artificially increasing the demand through electrification, and now we have this huge organic demand from AI.

I was warning of an electricity crisis before the AI era. Now it’s just totally, totally dire. So we need to abandon this idea of subsidizing, mandating intermittent fuel savers. We shouldn’t be subsidizing or mandating anything, but certainly not things that aren’t reliable.

5: We need a radical increase in industrial freedom

And what do we need? And this is point five. We need a radical increase in industrial freedom. And the two areas I’d point to are, one, tech-neutral permitting reform, so every kind of technology is much, much easier to permit in the ways I laid out.

And we need tech-neutral electricity policy, policy that values reliability and properly devalues unreliability.

If we do this, we have a real chance of being a serious country that’s growing and can meet the AI opportunity, which is not only a security issue, I think it is the chance for the greatest improvement in human life since fossil fuels caused the energy revolution. So happy to talk about that as well.

Q&A: The constitutionality of permitting certainty

Rep. Clay Higgins (R-LA-3):

Alex, you mentioned—I appreciate your work and your ongoing communication which I consider an asset.

Alex Epstein:

Thank you.

Rep. Clay Higgins (R-LA-3):

We don’t always agree.

Alex Epstein:

My job is to tell you what I think is true. That’s part of the reason why people listen. They believe I believe what I’m saying at least.

Rep. Clay Higgins (R-LA-3):

Roger that, but I always listen.

Alex Epstein:

I appreciate it.

Rep. Clay Higgins (R-LA-3):

So you mentioned permit continuity and reliance—reliable permitting, the major problem. I’d like to drill down on that.

Alex Epstein:

Yeah, let’s do it.

Rep. Clay Higgins (R-LA-3):

You rightfully identify that as an issue for American industry. And we are quite aware we have, in deference to our Chinese friends we have almost a yin-yang relationship with them, every eight years going from yin to yang.

So how would you suggest with Article One, we swear an oath to the Constitution, the founders effectively granted sweeping ballots to the executive. So any permit that would require executive authority and essentially the signature of the President, how would you constitutionally remove that authority?

Alex Epstein:

I mean, this is a great issue. I mean, I think of it as the opposite problem. I don’t think the current authority and the way the administrative state functions is constitutional or even defensible. So the basic structure is supposed to be Congress passes the laws. The executive faithfully execute the laws. We have this idea of a government of laws, not of men.

Rep. Clay Higgins (R-LA-3):

For an observation though, therein lies the interpretation of existing laws.

Alex Epstein:

Yes.

Rep. Clay Higgins (R-LA-3):

And the executive absolutely has the right to reinterpret laws if they believe they were wrongfully interpreted by the previous administration.

Alex Epstein:

True.

Rep. Clay Higgins (R-LA-3):

So, again, I ask you, how would you constitutionally address that as it would through Congressional authority, with Article One authority, without injuring Article Two constitutional authority?

Alex Epstein:

I mean, Congress needs to write clearer laws. So that’s one thing. They need clearer laws.

And what I’m saying with the permitting certainty is you need laws saying that once you have a permit, then you cannot just overturn it. And in fact, you could just have the permit be final. And then if the company actually violates the law in statute, then the executive can prosecute them. That’s different than the permitting thing.

Keep in mind, the founders didn’t even intend there to be permitting. So the whole premise of permitting is guilty until proven innocent, and it’s a fundamentally un-American premise. The only justification—

Rep. Clay Higgins (R-LA-3):

I think you hit it. I think we concur that given the modern phenomena of executive reversals of industrial permits, which is certainly a 21st century issue, Congress has to write legislation that includes prohibitive language and more clear granular language that can be less easily interpreted this way or that way. Would you concur with that?

Alex Epstein:

Yes, definitely.

Rep. Clay Higgins (R-LA-3):

Okay. But we do agree that in order to— we can’t just say, “Well, presidents can no longer, executive branches no longer has the authority to interpret an existing permit.” They have to be able to do that or else we’d be interfering with—

Alex Epstein:

I mean, the permit is a creation of Congress. Congress can attribute whatever stipulations to it wants. It can say, “This permit, once you pass this stage, it’s done. And then the only recourse is just if you’re violating the law, then you can do it.”

So I think we can dramatically constrain the executive. Now, the counter to that is, well, there’s lots of other things the executive can do, and that’s true and we should shore those up too. But in general, the vision is a government of laws, not of men. It should be obvious what the executive will do with these things. We’re far from that, but that’s the model. I don’t want one person having this authority.

Rep. Clay Higgins (R-LA-3):

Yes, sir. Well stated.

Q&A: The moral case for AI

Rep. Lauren Boebert (R-CO-4):

Mr. Epstein, and specifically talking about permitting, and of course you could take this anywhere you’d like, but will the United States ever be able to outcompete China manufacturing when we continue to make it harder to build mines and factories and refineries here at home?

And what are the biggest regulatory reforms Congress can make to help American manufacturers compete with China?

Alex Epstein:

I think we need—

Rep. Eric Burlison (R-MO-7):

Yeah. And I will say if everyone could, when you talk, use your mic, because we’re broadcasting this and we will be clipping it for—

Alex Epstein:

I think we need to recognize just how hard it is to do things here versus China, assuming the Chinese government wants something.

Now, the best is if you have real freedom, so it doesn’t really matter what the government wants, but the Chinese government wants a lot of industrial activity. And so people are relatively free to do it and we’re not.

If you look at the realms where we do have a lot of industrial freedom, say in particular oil and gas production in the United States where it’s largely a state permitting process and where, say Texas, you can have a pretty thin permit in terms of sheets of paper versus New Mexico or the federal government, you see that we can, I mean that’s in a sense a kind of manufacturing. So we see that when we do have the industrial freedom, we can do it.

The federal permitting regime is so bad that even if we make all the reforms that I’m advocating in permitting reform, we’re still going to be much less industrially free than China, but we’ll be much more industrially free than we are today. So we’re going to need to do that.

I do think where the real opportunity is is going to be in using and adopting new technologies. And in particular, let me just evangelize for AI as somebody who’s working on The Moral Case for AI.

Rep. Lauren Boebert (R-CO-4):

That’s what I was hoping to do before you leave. Yeah.

Alex Epstein:

Yeah, in fact have a... I can give you actually, my personal AI already wrote The Moral Case for AI for me, so I can give you a copy if you want.

Rep. Lauren Boebert (R-CO-4):

It’s a great app by the way.

Alex Epstein:

Thank you. So the best analogy I can give for AI for Americans to get it, those in particular who are familiar with my work on energy, is like billions of people in the world lack energy. We know this.

I talk in my book about the Gambia and where a woman can’t bring her baby— her baby dies because they don’t have incubators because they don’t have reliable electricity. You have 3 billion people in the world who have less access to electricity, who use less electricity than a typical US refrigerator does.

So in the United States, we can’t imagine this because we have access to abundant energy. Now, what access to abundant energy really means is access to abundant physical work. So we have all these machine servants doing work for us all the time. Basically the equivalent of 75 machine servants, like 75 machines worth of human energy are working on your behalf 24/7. And that’s why we’re so rich in the physical realm, because what energy does is it scales physical work.

Now, what most Americans don’t realize is that while they’re wealthy in terms of access to physical work, they’re quite poor in terms of access to mental work. And if you look at what really wealthy people do, and I know a lot of really wealthy people being in energy, one of the things they spend their money on is abundant mental work.

So they’ll get a direct tutor for their child or multiple tutors to get their child ahead. They’ll give one-on-one custom instruction, not just send them to the schoolhouse with 30 kids per teacher.

What will they do? They’ll have a private medical advisor or two, a concierge doctor, and they’ll have medical specialists, and they’ll have specialized veterinarians, and they’ll have psychologists, and they’ll have all of these other things. And then they’ll have assistants who help them plan trips and solve problems and stuff like this.

This is what AI is making available to everybody relatively quickly. AI is giving you custom teaching, so AI will soon be able to give custom instruction to anybody based on their context. That’s going to be much, much better than almost any teacher in the world very cheaply. And it’s going to give us custom advice where we can get expert advice from the equivalent of medical professionals and psychologists and anything else you can imagine.

Rep. Eric Burlison (R-MO-7):

Tax advice.

Alex Epstein:

Yeah, tax advice, so the whole legal system will be accessible to people that’s not. And in the realm of assisting, you’ll know what it’s like to have a family assistant or a personal assistant or executive assistant, which most people have no idea how convenient that is. And then if we get self-driving cars, then you get, “Oh, yeah, I have a driver too.”

So we’re at this phase where most people are really poor in terms of access to mental labor, you could call it access to intelligence. And we have this unbelievable technology that we are leading in that still needs to evolve a lot to fulfill its potential and that we need to lead in for economic and national security purposes. And yet we’re demonizing it in the same way we did fossil fuels in the sense of not looking at the benefits and then catastrophizing the hazards.

But most of the hazards of AI can be dealt with fairly straightforwardly. There are AI policies that can actually allow data centers to make electricity cheaper, not more expensive. There are policies that cannot challenge water supplies, but can actually make water more abundant. You can deal with the noise issues. You can make the data centers beautiful.

All these things are solvable, but we need a solutionist mindset versus a defeatist or a catastrophist mindset. And that’s why I’m, look, there’s plenty to do in energy, but that’s why I’m focusing on AI a lot now is because I feel like this is like when Obama almost killed fracking.

One of my things with Obama and fracking was he took credit for it. But the real thing that happened is he didn’t know about it early enough to stop it. Otherwise, he would’ve banned it because he said, “I’m going to end the tyranny of oil.” But he didn’t know about fracking and fortunately fracking got off the ground.

Nuclear power wasn’t so lucky because it never really got off the ground because the catastrophists killed it. This is what can happen with AI. The catastrophists and the defeatists from both parties can kill this. That means it’s going to revolutionize the rest of the world, but we’re going to be far behind. We’re going to lose all kinds of jobs, all sorts of industries, and our security is going to be really, really bad.

So I think we are at this inflection point and we need to embrace AI as an enormous opportunity and something that’s going to make billions of people’s lives better.

Q&A: The biggest bottleneck to AI is electricity supply

Rep. Lauren Boebert (R-CO-4):

Before you leave, how does energy and our resources tie into data centers and looking at the benefits of AI?

Alex Epstein:

Well, it’s the same— one is you just need to look at them the same way, so you need to look at positives and negatives with both of them. But what we’re seeing with data centers and AI is that the biggest bottleneck that we face in particular is electricity supply.

The US always better at what Peter Thiel calls going zero to one, like inventing something, because we have the most freedom in terms of mental freedom in our thinking. So we invent things, but China’s much better at stealing them and scaling them, and in part because we don’t have the industrial freedom.

So what we’re finding is we’re really good at designing chips. We’re really good at designing models. And we’re freer to do those things than people are in China, but we’re not leaving ourselves to free electricity even though producing electricity is incredibly easy.

Edison figured this out. It’s very easy. You just take reliable sources of fuel, you build power plants, you build some power lines. Super, super easy to do. But the whole permitting system has ruined this and made it difficult.

So basically if we can deconstrain our electricity grid, and a good place to start is by allowing these AI data centers to build their own power, which can power them and contribute to the grid, and be free of a lot of these other permitting things, that’s a good start.

So AI is existential for the country, energy is existential for the country, and energy is existential for AI.

Q&A: A solutionist approach towards the hazards of AI

Rep. Eric Burlison (R-MO-7):

Can I ask, can I jump in?

Rep. Lauren Boebert (R-CO-4):

Yeah, of course.

Rep. Eric Burlison (R-MO-7):

So before you leave, and since you’re writing a book on the moral case for AI, what is your response when people say this is going to devastate and destroy jobs? Also, that these data centers are going to be sucking up all the water and all the electricity in our communities?

Alex Epstein:

Yeah. So there’s three different things.

So the water thing, most data centers need to be cooled. They can be cooled through some combination of water and electricity. You trade between them. So you can use basically no water if you want to. You just use a little bit more electricity. So the water thing, if there’s a water issue, you can just solve it by different methods of cooling.

Often it does make sense to use water because you can use less electricity and most places don’t have water issues. In places with water issues, just use more electricity to cool. It’s really simple.

Okay, what was the next one? Oh, electricity. Yeah. I mean we have to deconstrain electricity production, but in particular, you can allow them to build their own power and contribute to the grid. They can sign agreements where they won’t take power when there’s peak demand on the grid. You can sign agreements where they agree to pay even more for their share of power because they can make more financial use of power than other people.

Rep. Eric Burlison (R-MO-7):

And they’re subsidizing the people—

Alex Epstein:

Yeah. So, again, these things are solvable. So when people raise these hazards or problems, the question is, are you raising it because you want to solve it? Are you raising it because you want to kill something? And it’s often a defeatist thing.

And then the jobs thing is such an interesting thing because it will change jobs. I mean, if you look, we used to have almost everyone working in agriculture and now we don’t. So I hope it changes jobs more than it is now, but what is that going to mean?

What it’s going to mean for a lot of people is it amplifies the productivity of a given person in a field, so a customer service rep can now service 10 times as many people, they can make more money, and there are going to be a lot of new opportunities for them to do new things.

I mean, what’s funny about the jobs things to me is that, it’s not funny because— Well, the thing with jobs is insofar as your job disappears because of AI, which is not as frequent as people think, guess what? AI is the best job trainer ever invented because what AI does is it allows you to learn anything and any skill incredibly quickly. It’s already doing this for almost anybody.

So AI solves itself with a jobs problem. But if the catastrophist scenario is AI is going to make us so rich that we don’t have to work. Yeah, that’s not our problem. And I wish it—

Rep. Eric Burlison (R-MO-7):

—Star Trek future.

Alex Epstein:

Most people who have $5 million a year don’t think they have enough. You think that AI is just going to do all this stuff? So what it’s really going to do is it’s going to liberate people and the poorest people will be liberated the most because they’re the ones who suffer most from this access to mental work.

That’s why you’re seeing, like I mentioned The Gambia. I was just reading a website, aisavedme.org. And there’s a guy just coincidentally from The Gambia who’s like, “This allowed me to become software developer.” Think about that.

Eric Burlison:

Right. My response is for people that have that attitude about the jobs and that people will be unnecessary is that you haven’t truly used advanced AI clearly because anyone, because like I was explaining before that, I installed OpenClaw, I use Hermes Agent, I’ve experimented with a lot of these more advanced AI tools.

And what you immediately realize is that you become the most important thing to the AI. If you create an agentic AI and you give it a job, it’s almost like an employee you say, “Your job is to go make money for me on Printify or whatever you’re going to do.”

It immediately sees that the AI needs you more than you need it. And so you become of tremendous value and yet you’re now creating an amplified value.

Share

Questions about this article? Ask AlexAI, my chatbot for energy and climate answers:

Try AlexAI for free

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

Share Energy Talking Points by Alex Epstein

2. Challenging ALARA is not enough. To unleash nuclear power in this country, the NRC needs to reject “LNT,” the pseudoscientific radiation model on which ALARA is based.1

• ALARA (”As Low as Reasonably Achievable”) requires nuclear operators to reduce radiation when “reasonably achievable”—even when radiation is below legal limits, which are already far below harmful levels.
  
  This is a major reason nuclear is impossible to build cheaply in America.

• The “reasonably” in “As Low as Reasonably Achievable” is not clearly defined in NRC regulation. But in practice it’s come to mean any radiation reduction that is technically feasible using existing technology, with little regard for cost.2

• Thanks to ALARA, nuclear developers spend tens to hundreds of millions of dollars engineering a single plant with unnecessary features such as excessive shielding to reduce radiation below levels people safely experience every day in naturally higher-radiation places like Denver.

• ALARA is based on a false model of radiation danger called Linear No Threshold (LNT).

  
  LNT falsely assumes there is no safe radiation dose. It’s the logic behind public dose limits being 50x below what science shows is safe, and ALARA forcing radiation reduction even below that.3

• The NRC proposes replacing ALARA with a rule that lets operators weigh radiation reduction below the dose limit against the costs of achieving it.

  
  This will save developers some money. But it preserves ALARA’s #1 problem: the premise, from LNT, that no radiation dose is safe.4

• Replacing ALARA but keeping LNT

  • Preserves the super-low radiation dose limit that makes nuclear catastrophically expensive

  • Reinforces irrational fear of nuclear by conceding that no radiation dose is safe

  • Preserves the justification and infrastructure for ALARA to return

• The NRC estimates that its challenge of ALARA will save the nuclear industry around $9.5 million a year.

  
  That is tiny compared to the savings that would come from rejecting LNT, which an analysis by the Breakthrough Institute estimates is in the $10s of billions through 2050.5

• To unleash nuclear energy in this country, the NRC must reject not only ALARA but LNT.

  
  This looks like:

  • Raising the dose limit by up to 50x, a level science shows is still safe

  • Dropping requirements to reduce radiation below that limit, where science shows no health benefit

Michelle Hung, Steffen Henne, and Daniil Gorbatenko contributed to this piece.

Share

Questions about this article? Ask AlexAI, my chatbot for energy and climate answers:

Try AlexAI for free

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

Subscribe now

Share Energy Talking Points by Alex Epstein

Tell your Rep to end CA's EV mandate

America’s EV mandate is not dead, thanks to 4 “waivers” that California holds from the Clean Air Act, which let it impose vehicle GHG standards on the whole country.

Congress has an opportunity to get rid of these waivers, but they need to act before the midterm election!1

• No government should use vehicle GHG standards to mandate EVs.

  
  1) There is no “climate crisis” requiring lower GHG emissions—and even if there were, forced EVs (which have high-emissions supply chains) wouldn’t help
  
  2) People should be free to drive whatever vehicle they choose2

• As of February 12, 2026, America no longer has national vehicle GHG standards.
  
  But letting states set their own vehicle GHG standards effectively creates national standards, because automakers must shift their nationwide fleets toward EVs to comply with individual states’ rules.3

• The Clean Air Act normally bars states from having vehicle GHG standards. But EPA gave CA “waivers” to set its own standards, which other states are allowed to adopt.
  
  Today, more than a dozen states have adopted parts of CA’s standards, covering ~40% of the US new car market.4

• Congress can put an end to California’s vehicle GHG standards using a law called the Congressional Review Act (CRA). It allows Congress to disapprove agency rules by issuing a “joint resolution” that is not subject to the ordinary 60-vote filibuster.5

• The EPA could theoretically rescind California’s “waivers” on its own. But it would be far better for Congress to do so, because once Congress disapproves a rule under the CRA, a future EPA cannot reissue a substantially similar rule without new legislation.6

Here are the 4 California “waivers” Congress should put an end to, and how each one imposes an EV mandate on Americans:

• 1: Waiver for California’s GHG Emission Standards for New Motor Vehicles

  
  This waiver let CA enact vehicle GHG standards in 2009, before federal standards for model year 2012 went into effect, and today it lets CA enforce the Biden admin’s EV mandate even after its repeal.7

  

• 2: Waiver for California’s Advanced Clean Car (ACC I) Program

  
  This waiver gives CA permission to
  

  • effectively require automakers to sell ~15% EVs/hybrids or buy expensive credits

  • enforce GHG standards for model years 2017-2025 as strict or stricter than federal standards8

• 3: Reinstatement of the Waiver for California’s Advanced Clean Car (ACC I) Program

  
  The first Trump admin already withdrew the key parts of CA’s ACC I waiver, but the Biden admin reinstated the waiver in 2022. Congress should repeal both the original waiver and its reinstatement.9

• 4: California’s Small Off-Road Engine (SORE) Authorization

  
  This authorization gives CA permission to require zero exhaust emissions for small off-road engines, including lawn/garden equipment, beginning with model year 2024—plus later on, certain generators and pressure washers.10

• EPA has already submitted the 4 CA “waivers” to Congress for review under the Congressional Review Act.
  
  Congress has until around December 10 to respond, but strategically Congressional leadership should act before the midterm election so they have control over it.11

• Tell your Congressman to introduce and pass “joint resolutions” rejecting each California “waiver,” and to do it before the end of the 119th Congress.

  
  If they don’t, an EV mandate from California will continue to dictate what kinds of cars all Americans are allowed to drive!

Click here to use AlexAI to send a personalized letter to your Representative urging him or her to end California’s nationwide EV mandate.

Tell your Rep to end CA's EV mandate

Michelle Hung, Steffen Henne, and Daniil Gorbatenko contributed to this piece.

Share

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

Subscribe now

Share Energy Talking Points by Alex Epstein

I recently sat down with Alan Armstrong, the former CEO of Williams (one of America’s foremost natural gas pipeline companies) and now the freshman Senator from Oklahoma, to talk about a key part of the ongoing permitting negotiations: the Clean Water Act.

I knew the Clean Water Act had problems. But in our exchanges leading up to this interview, Senator Armstrong convinced me that its current state is even more insane than I had realized.

Natural gas pipelines do not emit liquids or solids that contaminate water. Their main water-related “risk” is temporary muddying of the water during construction—on a scale less than storms or even beavers create. Any theoretical risk to fish is dwarfed by the billions of fish we kill every year through recreational and commercial fishing.

Yet the Clean Water Act’s “state certification” process lets states effectively veto interstate pipelines that cross their land by claiming the project violates their water quality standards—even when the real objection has nothing to do with water quality.

Many Democrats assume Clean Water Act reform has little to do with their priorities. But this is wrong. Today, state certification is a major weapon against natural gas pipelines, which are crucial to keeping electricity reliable and affordable. But in the future, if Congress unleashes more transmission without fixing the Clean Water Act, that same state veto power will absolutely be used to block interstate transmission lines.

Here is my conversation with the Senator on how Clean Water Act abuse blocks pipelines, how the same abuse could threaten transmission, and how Congress can fix it.

Alex Epstein:

All right. Senator Alan Armstrong, welcome to Power Hour.

Senator Alan Armstrong:

Thank you. Glad to be here today.

Alex Epstein:

Let’s jump right into this permitting issue. So let’s start off with, you’ve made a lot of your career in pipelines, specifically gas pipelines. Why are gas pipelines so crucial for our country?

Senator Alan Armstrong:

Yeah, it’s becoming more and more evident, I think, but we have such a great abundance of low-cost resource here in our nation and we desperately need to be using that to our advantage as a country, not just for obviously domestic purposes as well, but it’s also giving us a very powerful geopolitical tool as well via our exports.

But having all that abundant resource is one thing, but being able to get it to the place where it’s used and needed to be used for growth is the next thing. And so pretty obviously, we’ve got to be able to build that infrastructure. The cost of those bottlenecks is enormous. And if you think about any kind of linear big energy infrastructure, you’re building for peaks and you have to be able to build for peaks to accomplish that. And so that’s—

Alex Epstein:

As in peaks of demand?

Senator Alan Armstrong:

Peaks of demand. And that really is getting to be a bigger and bigger issue and one that’s not very well understood, I think, sometimes, in terms of what really the impact of having those constraints are and what that means for our energy system writ large.

So the good news is, I will tell you, people have kind of started to give up on the notion of, well, “we don’t really need fossil fuels for the future.” And I do see that people are really backing off of that at the moderate level. Obviously on the extremes, you’re going to have different perspectives. But I do think that people are understanding how incredibly important natural gas is to our country and for our allies as well.

Alex Epstein:

Yeah. I’ll just add for people, natural gas, whether you like it or not—and I do like it—is by far the number one source of electricity for our grid. And so you see in events particularly where the grid is strained, like during storm Fern, you see these skyrocketing natural gas prices. And guess what? If we had more pipeline infrastructure, then we could bring more gas to market and your electricity prices would be a lot cheaper.

So one thing I think it’s important for everyone of both parties to recognize is this is an affordability issue. If you cannot bring gas to market, your heating bills and your electricity bills are absolutely going up and it accomplishes nothing at all to make it—

Senator Alan Armstrong:

The last part of my tenure as CEO with probably some of the very best years ever in the pipeline—

Alex Epstein:

—CEO of Williams, just for people who don’t know.

Senator Alan Armstrong:

CEO of Williams. Thank you. Thank you, Alex. Were some of the best times ever because pipeline capacity is constrained. That’s a great thing if you’re in the pipeline industry and you have that capacity. It’s a terrible thing though for our country and for consumers.

And in fact, if politicians and regulators and even the NGOs actually understood the energy systems better, they would understand that what they ought to do is get the capacity overbuilt and completely eliminate those bottlenecks and let the market of supply and demand dictate what we’re using, not the constrained infrastructure in between.

But today that is truly what we’re managing off of. The lowest cost part of the entire value chain being the infrastructure, and it’s the part we’re letting constrain the ability of using our own natural resource on one hand and growing our economy on the other.

Alex Epstein:

This is a purely political preventable thing. And let’s talk about, given how crucial gas pipelines are, how difficult is it to build them? So having been CEO of Williams, witnessing this firsthand, what do people need to know about how difficult this is versus how relatively simple it would be to just build it if you didn’t have all these crazy barriers?

Senator Alan Armstrong:

Yeah. I think people really are shocked when they hear how little the actual construction time is on a 5, 6 year project, and the fact that most of that pipeline, the pipeline itself, not all the compressor stations that go with it, but the pipeline itself is sell to more than a 6-month-long construction window. The rest of that is all spent in very low value added efforts that originally were designed to protect the local environment that the pipeline was impacting.

Today, that’s not that hard to do. We know how to do that. To build a pipeline today that’s done in an environmentally sensitive way is not rocket science, it’s not complicated. We know how to do it. We know what the right standards for doing it are, but we’ve let it turn into a perfectly politicized process that is exactly where the handles are.

And it’s actually the litigation that causes the problem. It’s actually not, for the most part, it’s not the federal agencies that are the problem. It’s the litigation that the federal agencies face from the NGOs and from anybody else that wants to try to make money in the business of stopping infrastructure. The litigation is really where the problem is.

Yes, we could do a lot better job at an agency level and in coordination of our agencies, but until we fix the litigation problem, we’re going to continue to add tremendous amount of cost both in terms of time and uncertainty to the mix.

And so if you think about today, there’s a number of projects, including one of Williams projects, that got the certificate—after the pipeline was up and operating—a certificate from the FERC actually got vacated by a court, after a billion dollars had been spent, after the pipeline was up and running almost at full load already and a DC circuit actually pulled that certificate. Same thing happened to a next decade LNG project in Texas.

But that is, the amount of impact that that has on icing up capital and raising the cost of capital because who in the world wants to take that risk of being able to—I remember very crisply, I remember being in front of our board answering questions from the board like, “What do you mean we spent a billion dollars and we got our permit pulled? And why in the world would we ever do that again?”

And so those are the kind of things, those kind of tough questions that really frees up capital and just at the end of the day, raises the cost to the consumer when we have constrained infrastructure because nobody can afford to take that risk.

Alex Epstein:

I mean, just to recap some of this, I mean, just how crazy it is that, hey, we’ve got a natural gas driven grid, we’ve got natural gas driven heating, they’re constrained by pipelines which are fundamentally cheap to build and easy to build.

You’re saying you build them in six months. We’ll talk about how little of a threat they are if they’re built properly. And yet we’re talking about 5 plus years plus some of these things just get killed. And so it’s 5 five years to infinity. And then the infinity in particular drives away people.

So whereas, in a rational world, investors would just be immediately investing in this because it’s just such an obvious high ROI thing to unconstrain natural gas delivery in a country that needs it, in a world that wants our LNG desperately, particularly in the wake of the Iran war. It’s just so insane.

And just to add to that, let’s add, we’re going to talk about the Clean Water Act, but just on the face of it: a natural gas pipeline. How can that be that much of a threat to the water? It’s a gas. You think of the Clean Water Act, you talk about liquids and solids that in a certain concentration can affect the water, but this is the gas. What is it? The gas magically mixing with the water and poisoning everyone? I mean, what is going on here? What’s the actual threat profile?

Senator Alan Armstrong:

Yeah, I think natural gas via its name of “gas” and gas prices at the pump has suffered that issue for a long time that politicians do a pretty good job of confusing those two sometimes. Sometimes I’m convinced on purpose. But it’s a gas that’s lighter than air, but the public doesn’t appreciate that.

The real risk to the water quality issue is generally in the construction of the pipeline project, not in the actual operation of the pipeline project for a natural gas pipeline. And so the issue of how do you cross a river, what’s the best way to cross a stream, are the issues that need to be dealt with.

But again, we’ve had standards for this for a long time. We know the best way to do it. We know the safe way to do it. We know what to look out for. The Corps of Engineers has under—their NWP 12, their Nationwide Permit 12 has very good standards for how you cross a water body with a pipeline. Yet we have decided to make that politicized.

I’ll give you a great example. When Williams was crossing, or was permitting a project that looped an existing pipeline across the New York Harbor, the state of New York, their veto right existed in the 401 water quality certificate, which looks at the impact on water quality under the Clean Water, under their rights under the Clean Water Act.

Williams had to actually wait until the Corps of Engineers got done with their annual dredging process across the harbor. We had to wait for the water and the turbidity set to settle to take a water sample and then we were actually going to use silt containment sheets, in other words, curtains that we lay down for our dredging through the same area, even though the Corps on an annual basis does annual dress and the state stopped that project over water quality concerns with our controlled dredging versus the uncontrolled dredging in the exact same section of water across the New York Harbor. So clearly, was not a water quality concern. It was purely just a politicized issue.

And so good example, though, of what the actual water quality is supposed to look for. It’s supposed to look for things like turbidity and impacts that are uncontrolled when the construction’s going on, but it’s been used well beyond that in a number of cases. In fact, if you actually read all of these denials, you’ll see there’s 30 pages of greenhouse gas and climate concerns and a lot of things that the state actually doesn’t have any legal right to object to. And then there’s a couple of sentences on the water quality impact.

And the truth is it’s not really—very, very seldom is it actually a water quality issue that can’t be dealt with. And the Corps of Engineers—by the way, the Corps of Engineers has already signed off on this process with their own standards—and then the state takes another swipe at it.

Alex Epstein:

I want to get in a little more depth in that in a second, but I just want to highlight. So even when you’re talking about water quality, I think people equate—they think the Clean Water Act is drinking water, which it’s not. That’s the Safe Water Act.

And even these terms like “turbidity,” I think, get misleading because “turbidity” means the water gets temporarily muddy. If you’re talking about dredging and this kind of thing, now granted, you’re doing a lot less than was being done before, so that’s absurd.

We’re talking about, I mean, we’re moving around water and rocks and dirt, which by the way, we do with all sorts of other activities, and nature does all the time with a storm. And the number one casualty, as far as I can tell, of all of this is some unprovable, usually risk to fish populations. By the way, we kill billions of fish voluntarily every year through recreational fishing and commercial.

So it’s this is—a lot of my philosophy is a lot of the environmental movement is not at all about protecting humans and a human environment. It’s just about we shouldn’t impact anything. And this is just the absurd version of it.

We can’t move around any dirt and rocks, even if it’s going to help us all eat food with our fertilizer from natural gas and heat our homes and have electricity. We can’t move around water even though we’re doing sometimes less than beavers do or less than storms do. And it’s all in the name of these fish that nobody cares about, and that they’re trying to kill anyway through fishing.

It’s just so outrageous. And I don’t think people think, “Oh yeah, it’s going to damage the water,” and they think their drinking water has nothing to do with that at all. Yeah, that—

Senator Alan Armstrong:

Yeah. Don’t get me started on that, Alex. I could go on for hours.

Alex Epstein:

Well, yeah. I’ve gotten—so we’ve had a couple of conversations about this, and I myself have just gotten progressively outraged as I looked into this because people think, oh wow, we really better be—we really better have many, many, many different successive approvals.

And you’re thinking, this is not even like a refinery or a mining operation or something like this can actually dump something in the water. It’s a natural gas pipeline that can’t really do anything except as a construction project.

But it’s just like any other construction project that’s going to cross a waterway. It’s not that. It’s just like a transmission line, which, by the way, they’ll—people will use that to oppose transmission lines. Democrats should know.

But let’s just—I just want to make sure I understand the process. So what’s the current process and the sequence in terms of what the Army Corps does, what happens under NEPA, and then what happens with this issue of state certification that even many Republicans, I think, are trying to protect, and I just think is insane because I think the federal process is already way too long.

Senator Alan Armstrong:

Yeah.

Alex Epstein:

But yeah. Tell us how it goes.

Senator Alan Armstrong:

Yeah. Today, the way if you’ve got any kind of major project, a gas pipeline project, the FERC has oversight authority on that. And so they manage—under NEPA, they manage what is called the EIS or the environmental impact statement that has to be written for a project like this, and that effort takes into consideration the community’s concerns, the Corps of Engineers, 404 water quality concerns, Fish and Wildlife, any species that would be impacted, highway departments. You name it.

It is a very long list of agencies that historical preservation groups, tribal preservation, any people’s concerns that should be related to what is the best route for us to take to make the least amount of environmental impact associated with this route.

So that process has been in place for time. It is arduous, but at least it’s a defined process. The FERC, I would tell you, given the litigation risk around them, I think they do an actually a pretty good job of managing that today for what it is. But now the state says, “Well, sorry, but we’re not going to be subject to the FERC authority on this—

Alex Epstein:

And this is interstate—let’s just stress this interstate project, right.

Senator Alan Armstrong:

The interstate project, that’s right.

Alex Epstein:

Interstate commerce, so this is federal government.

Senator Alan Armstrong:

And even if you were building a gas pipeline project that was in addition to an existing interstate project, you likely would fall under that jurisdiction. But for this argument, let’s say it’s an interstate project and the state now says, “Well, whenever you get your EIS done, after you spend your 3 or 4 years getting your EIS done, come back and see us and we’ll tell you what we think you should do with your water quality—for to not impact water quality certificate.”

So you’ve had all of these parties, including the Corps of Engineers that has well-defined standards under the water quality certificate issues and the 404 permit. You go through that process, and then the state says, “Okay, now we’ll take our year to tell you what route we think you ought to take.”

And they don’t have to look at it with all these other complexities in mind. They can look at it purely for, we’re here to see that you protect our water quality in the area via your construction, and we can tell you whatever we want to. And if you don’t do that, if you don’t follow us, then we’re not going to give you your certificate, but if you do take our new route, you’re going to have to go back to square one through the EIS process.

And by the way, this group’s already looked at it once and said, “This is the best route.” And so now you’re telling whatever other issues were being debated, whether it was a species issue, a community, whatever the issue was, you’re telling them, “We don’t really care what you thought. This is the route you’re going to take.”

So immediately you’re into a do loop that one way or the other is going to cause court litigation because the EIS has already said this is the best route to take, and the states and the NGOs know that. So that is—it is a, once you hit that state’s abuse of the 401 water quality certificate, you are in a do loop that is almost impossible to clear.

If you sue the state, you say, hey, this was a denial that was wrongly delivered to us. The judicial standard today is “arbitrary and capricious.” So the court has to find that the state was acting in an arbitrary and capricious manner. Any general counsel of a Department of Environmental Quality for a state knows enough to write enough in there to say, for this one item for this water quality, here’s why we thought that they should change their route. And once—And that’s all a court has to hear, that there was some reason that they had for you changing your route.

And that’s almost like it’d be hard to screw that up that bad if you were the general counsel, to not be able to write it to meet such an incredibly low standard for denial on that.

So that’s how that process goes today, and what needs to happen really is that needs to be moved to be in parallel or in concert with the same permitting process as the EIS, not sequentially to the EIS.

Alex Epstein:

Yeah. So let’s talk about the fixes. I mean, just from talking to you and from studying it more after talking to you, my sense is just we want, you can have a simple, efficient, and safe—particularly given what you’re talking about with pipelines and transmission lines—you can have one simple, safe process that should be fast.

I don’t know if we’re going to get that fully in permanent reform, but the state certification for interstate seems insane to me now, which it didn’t at the beginning. So you helped convinced me of this, but I’m curious where you are in terms of what you’re advocating as the fix.

Senator Alan Armstrong:

Yeah. So I think there’s 3 primary things. There’s a lot of things that beyond this we could improve with, but there’s 3 primary things. First, is you have to—if you look through the list of pipeline projects that have either been stopped in court or stopped by a state, it’s almost always been the 401 water quality certificate at the heart of what we call the handles. In other words, what stopped the project in the first place? It’s almost always the 401 water quality certificate because it’s so easy to sue around.

The second thing though is the judicial standards that we’ve been talking about and move it to where somebody has to have “clear and compelling” evidence that you’re actually going to harm the environment through the method. Not just we think you might, but they actually need “clear and compelling” evidence that there’s actually going to be harmed under the environment and that’s why they should be allowed to stop a project.

And then finally getting to a “no vacatur” rule so that a court, if an agency is issued a certificate that a court doesn’t have the right to just turn around and pull a certificate from an operating company after the project’s already in service.

Now, if they violated something about the permit conditions, that’s an enforcement issue and we’re not suggesting that you shouldn’t be able to be stopped if you’re not operating it or you didn’t construct it in a way that was consistent with what was required. But once you’ve done what the lead agency tells you to do, you ought to be protected as the operator under that and vacatur should not be the remedy for a court. It’s a very powerful remedy today and the NGOs know it and they know that it really ices up capital in the space when you can actually get a certificate vacated.

Alex Epstein:

Gotcha. So you’re understandably focused on natural gas pipelines because you’re so aware of the consequences, but what other type of infrastructure can Clean Water Act reform help with?

Senator Alan Armstrong:

So what’s going to be fascinating if this doesn’t get handled, and in fact, there’s already a few cases where this existed, but we’ve built so little interstate transmission lines these days, power transmission lines, that this really hasn’t come to fruition yet. But if we get to where like EPRA would’ve taken us and a lot of the new—

Alex Epstein:

That’s a 2024 Energy Permitting Reform Act.

Senator Alan Armstrong:

Yeah. Thank you. So that was a Manchin-Barrasso bill. If we actually get back to building power transmission and that being cited by the federal government, this same issue is going to hit transmission.

The only reason it hasn’t hit power transmission is because we haven’t been building any interstate big long haul power transmission to speak of. And so this issue hasn’t come across us yet where states don’t want it coming across their land.

Now, there’s two big transmission projects. One which was the Grain Belt project, which was trying to go permit across Missouri is still in the process of trying to do that. And another one that took wind power from Texas into the Tennessee Valley authority market. Both of those projects have been stopped because there was inadequate eminent domain rights for those transmission.

But if this bill gets done and you give the Feds the right to give eminent domain across the state for a power transmission line, those red states are going to have that same weapon that the blue states have been stopping pipelines with. You’re going to see the same thing occur.

So we just can’t have a world where interstate commerce can be so easily stopped without real standards existing for why you’re going to stop a project. And so my point is, yeah, it’s been seen as a pipeline issue. It’s going to become a transmission issue very quickly if that doesn’t get solved.

Alex Epstein:

I think I have a piece coming out about this soon about the bipartisan case for Clean Water Act reform, and you and some others have really solidified this point in my mind because if you look at the Democrat position negotiations, they say, “Well, we want NEPA reform, National Environmental Policy Act, because that affects everything. And then we want transmission reform because we don’t want it to be easy for interstate or interregional transmission to be vetoed. And we think that’s important for our vision of a grid. But Clean Water Act, we don’t care about that.”

And the point you guys have made is, “Well, that’s insane because if you get rid of these other barriers, then it’ll be super easy to kill these transmission projects based on Clean Water Act.” Just like we’ve seen with the lack of permitting certainty that both Republican administrations can kill Democrat-favored projects and Democrat administrations can kill Republican-favored projects.

So I think you’re helping wake people up to all these things are bipartisan. All these reforms are bipartisan. It shouldn’t just be Democrats care about transmission or Republicans care about Clean Water Act.

Senator Alan Armstrong:

Yeah. And if you think about a process where you said, “Hey, we really want a fair effort done at considering all of these various factors that have to be considered when you’re choosing that route to say that you ought to do something that’s already duplicative to the Corps of Engineers effort, but you’re going to do it sequentially to the process instead of part of the process?” Who can say that actually makes sense? There’s just no rhyme or reason.

Even if you said, “Well, I’m a transmission, power transmission guy, and I don’t think the states are going to block me.” Okay, but still why would you not want to have that process—

Alex Epstein:

Well, they say we don’t want fossil—I mean, you look at some of the states who are rejecting this and New York specifically said, “Hey, this is part of our war against fossil fuels.” Even though that’s obviously not a mandate under the Clean Water Act to deprive somebody of a permit because you want to wage a war against fossil fuels.

So I think it is very important for them. I mean, it’s very important for them to see for affordability, you need these gas pipelines, but also the transmission is going to get killed just as easily as the gas if you don’t change this.

One final question before we open it up to some others is what can people do? So executives and others, what can they do? Because we’re in the midst of negotiations right now, there’s not a lot of time. So what can they do to make sure that the right reforms get passed or at least maximize the chances?

Senator Alan Armstrong:

I do think we listed them out there a while ago, obviously NEPA reform and some of the judicial standards that go with that. The Clean Water Act is something you must insist on with the Senate right now, and finally making sure that the no vacatur issue gets dealt with, I think most of those are going to be dealt with.

The one that kind of seems to be the on that the Dems are really holding tight is the Clean Water Act and they’re smart to because they know that’s what’s stopped project after project after project. So really enforcing the importance of that to whoever you’re talking to on the Hill, but please don’t misunderstand the power of coming and being specific on these issues.

Because I actually have Senators from both sides of the aisle tell me, “Well, I’ve never heard anybody talk about that. So can’t be that important if nobody else is talking about that.” And so your voice on these issues is more important than you think it is.

When I was on the other side of this discussion, I’d always like, yeah, well, that’s just a lobbyist telling me it’s important because I’m going to pay them to march me around the Hill, but nobody’s really listening to me anyway. The truth is they really are listening.

They particularly are listening to the companies that do business in the states that they represent. And so it is really important that you do get your voice out there and I would target that voice right now, particularly within the Senate, I would target on the moderate Dems. That’s the people that really need to hear that this is important.

On the Clean Water Act, I would say every member of the EPW and the ENR, so the Environmental Public Works Committee and the Energy and Natural Resources Committee within the Senate, take a list, look at those committee members, both red and blue, and really target those individuals as to how important it is that we get this right, not just get a bill passed.

Because the bad news about this permitting reform is getting it right is hard and nobody really necessarily wants to do that. They just want to say we got a bill passed because everybody hears how important it is, but nobody’s going to know whether it was effective or not until 2 or 3 years down the road. And so it’s really important that you insist that we get some of these critical elements solved.

Alex Epstein:

All right. Well, I would definitely say knowing you, you care. If something good is done, you’re clearly not trying to become a lifetime politician and secure a Senate seat for life. I care, and I know that a bunch of the administration and Congress do as well, so thanks for your work.

Share

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

Subscribe now

Share Energy Talking Points by Alex Epstein

As often happens, the vast, vast majority of what I said couldn’t make it into the story. But I thought it would be valuable for my readers (many of whom are in government) to get the full picture.

Why reform of Clean Water Act in addition to NEPA is in Republicans’ and Democrats’ interest

I think that there are some pretty common misunderstandings or areas of ignorance that exist in both parties that make them insufficiently realize how many policies there are that they should both agree upon, given their particular objectives and preferences. So I can explain that.

If you look at the three biggest areas of focus—not the only ones, but the three biggest—are NEPA, Clean Water Act, and transmission. And let’s just say permitting certainty, let’s say there’s four.

If we leave aside transmission for a second—which I’m going to argue is also bipartisan—but if you take NEPA, Clean Water Act, and permitting certainty, all three of those are essential to the vast majority of projects that both Republicans and Democrats care about.

Now, the clearest area of consensus here is with NEPA, where Democrats have an increasing recognition that NEPA is impeding them in all sorts of ways, and Republicans have it. So you have that, so that’s the most straightforward.

But with Clean Water Act, there is a hugely underappreciated sense in which it is bipartisan. So the most appreciated sense in the Clean Water Act is that it is used as a tool, in its current state, it’s used as a tool for states to stop interstate natural gas pipelines for reasons that have literally 0.0% to do with any water impact that could possibly threaten human health.

So one thing is most Republicans, let alone Democrats, do not understand that. So when they hear “water quality,” they think, “Oh, the water is going to be contaminated. We’re going to have trouble drinking it.” It’s like, no, operating natural gas pipelines doesn’t get gas in the water. That can’t physically work for any amount of time. And the impacts involved are things like “turbidity,” making the water muddier.

It’s basically just different ways of moving around soil and rocks in different waterways in ways that are usually smaller than what nature does, and then affecting fish, which is on a tiny scale compared to, A) what nature does, and B) what we do by killing billions of fish annually, including hundreds of millions, arguably, recreationally. We kill probably a billion fish recreationally, and then a couple of billion commercially.

So, A) people don’t understand, with natural gas pipelines and most infrastructural buildings, how there is no threat to human health whatsoever that’s related to the water, so they don’t get that.

But they also don’t get that if NEPA is improved and transmission policy makes it easier to build transmission—so particularly the FERC “backstop” issue, which we can talk about—the Clean Water Act can easily be used to stop transmission in the exact same way NEPA can be used or state veto can be used.

So anyone who cares about solar and wind transmission lines should be incredibly afraid of what anti-solar-and-wind Republican AGs have up their sleeves, if you get transmission reform plus NEPA reform and no Clean Water Act reform. And I would say that what I just said is not known by 90% of the politicians involved in this process.

Why strong reform of NEPA and Clean Water Act is in Republicans’ and Democrats’ interest

The standard directional reforms proposed for NEPA, proposed for Clean Water Act, and proposed for permitting certainty, those are the things where both parties benefit from them, and in general, both parties benefit from the most “extreme” proposals.

So I support generally the most “extreme” proposals, so-called, the biggest reforms, and in fact, I would hope for bigger reforms, but in terms of if you take—we could go through them. But NEPA in terms of the SPEED Act, or stronger than the SPEED Act. And then, on water quality, Hudson’s thing even versus the PERMIT Act.

And then, the permitting certainty, something like the FREEDOM Act, so that is another thing where both parties have an incredible amount to gain in any sort of long-term sense, because pulling project permits is absolutely toxic to investment in any technology.

So in terms of anyone’s long-term concern about any type of project, there is, I think, an irrefutable argument that both parties should want strong NEPA reform, strong Clean Water Act reform, and strong permitting certainty—and all of those are tech-neutral reforms.

Why transmission permitting reform is in Republicans’ and Democrats’ interest

Transmission is the hardest case to make that there’s overlapping interests, but there actually are overlapping interests in transmission.

Now, they’re not totally overlapping, because some people want transmission permitting policy to change in such a way that it is easier to force consumers to pay for wasteful transmission projects that primarily service solar and wind generators.

Republicans are generally concerned, and I share this concern, about the illegitimate building of wasteful transmission that ratepayers are forced to pay for. That is a problem now. It’s a problem that relates to solar and wind, and it’s also a problem that just relates to utility exploitation of various loopholes, which we could talk about.

But one important point for Republicans who are concerned about this issue is that the current law is very bad in terms of the potential for the federal government to authorize a lot of ratepayer-coerced financing of wasteful pipelines.

So the Republicans need to understand the status quo is very bad in terms of what an antagonistic administration can do, because what it can do is it can basically authorize certain corridors. The DOE can basically authorize any corridor it wants, and then it can give FERC this “backstop” authority to forcibly permit things over state objections. And the current criteria involved are utilities, there’s scenarios in which utilities will be able to run wild with consumer coercively-financed transmission.

So one thing that’s important is the status quo isn’t good, and in quite a few ways, EPRA was better than the status quo. Now, EPRA is not what I would advocate. I’m advocating significant modifications of EPRA. But nevertheless, the current state of affairs is not good for Republicans.

So I think what can be advocated here, I mean, I’ve put out a bit of my policy ideas already. But the general thing, I think most reasonable people should agree to, that it should be easier to permit transmission that genuinely lowers costs for consumers and increases reliability, and it should be harder to force consumers to pay for transmission that doesn’t. And I think that there is some agreement.

Some people just throw out EPRA wholesale, but there is reason for this to be a federal issue, by the way, in the same way that the permitting of interstate pipelines should be a federal issue, in my view. So I do think there’s a real compromise.

I think even with transmission, even if it wasn’t part of a separate permitting bill, there is a valid compromise that you could pass standalone if the people involved had full knowledge of the status quo versus what’s potential.

So I think the four key areas of fighting are actually ones where both parties benefit from a dramatic change to the status quo, and that’s really what I’m trying to advise on, and I’ll have something public soon. I have previous versions, but I have some better stuff coming out. You can look at my previous versions. I’ve been advocating, “Hey, you guys have way more in common than you think.”

And so, one of the problems with this negotiation mindset is people are acting like things that actually benefit them, they don’t care about. Because people would advise, “Oh, tell the administration we don’t care about permitting certainty. We don’t even like it because it limits our current power.” Versus, no, this administration, given energy dominance, should absolutely want permitting certainty.

By the same token, the Democrats should not act like they don’t validly benefit from very strong NEPA and Clean Water Act reform. They absolutely do. And again, if they do not get it, if they get a weak NEPA reform—which some advocate, some want a weak NEPA reform—and they want no Clean Water Act reform, and they want this transmission deal, then all their transmission is going to get killed by Clean Water Act.

So let’s just all be adults here and recognize that the state of permitting in America is a completely existential threat to our country, and we will not have a grid, and arguably an economy, if we cannot actually build things and our adversaries can, and then the age of AI makes this even higher stakes.

How the cut-off of new solar/wind subsidy streams affects transmission permitting

I would say the biggest change with the availability of new subsidies is that the worst case scenario of transmission is probably better than it was before. That, plus demand. Because the demand is very focused on dispatchability.

Even two years ago, even last year to some extent, but definitely two years ago, everyone was pretending that they didn’t need reliable electricity, and now you see that we have shortages of gas turbines, and we’re turning to other forms of turbines, and this kind of thing.

So I think on the demand side, there’s more of a stress on reliability, and on the supply side, we’ve cut a major source of preferences for unreliability. We definitely haven’t cut all of them. There are a lot of market rules that still favor solar and wind.

So I do think that from the perspective of unreliable electricity being promoted by transmission, the worst case scenario is less than it used to be. So that’s my main thing.

Why the administration should restore permits for blocked projects regardless of negotiations

Just as a straight policy thing, absent negotiation, I would tell any administration that it should be incredibly, incredibly rare that you pull the permit of an approved project, and you better have something really existential that you could really easily prove, and that’s not going to deter people into thinking that it’s politically motivated.

I was on the record, I was considered by many to be the most influential person outside the government in cutting solar and wind subsidies. And I was publicly against any deal that involved the administration cracking down on solar and wind in any way outside the law.

I said, once you made the law—I’m in favor of taking away the subsidies, but if the subsidies are legally there, you should absolutely not discriminate against those projects. And I told this to people privately and I told this to people publicly. So I’ve totally been against any sort of technology-related crackdown of any kind by any administration. I’m already very against that publicly and privately.

Now, I’m not an expert on every single project, but in general, yes, the volume of projects that have had permits pulled or stalled, I don’t think there’s any real argument. You can’t make any real argument that that is a good thing. So I think those should be restored no matter what, regardless of negotiations. I mean, obviously nobody’s following me on that, but that’s the policy.

So in terms of negotiations, sure, I hope that the negotiations lead to the restoration of any projects that are illegitimately being delayed. The negotiation thing though is, ultimately, I’m trying to get all the pro-freedom carrots out there. So insofar as the administration can use permitting certainty, both supporting law that does it and changing its administrative policies, okay, that’s fine.

I mean, again, I want the administrative policy to be the right policy, regardless of negotiation. That’s my position. But I’m not anyone’s negotiator. I’m mostly just telling them what’s good policy. But what I’m telling them as far as negotiation is, “You guys have way more interests in common than you think you do.”

The importance of bipartisan permitting reform being technology-neutral

I’m always trying to be technology-neutral in what I’m thinking of. So I’m not thinking in terms of, “Oh, I want fossil fuels to benefit,” or something like that. But what I do want is I want reliable electricity to benefit, and solar and wind by themselves are not reliable, and that needs to be factored into thinking about the grid and developments.

But in any case, yeah, I would advise everyone just to think about, you need tech-neutral permitting reform, don’t think of it in a technology-specific way. But even if you think of it in a technology-specific way, recognize that your technology of preference is going to need reforms across permitting certainty, and NEPA, and Clean Water Act.

And we could also add in NHPA and ESA, you also need to think about those bottlenecks, because these things are so elastic, that if you get rid of one of the blockers, you still have the other blockers. So you basically need to get rid of all of these things’ ability to illegitimately delay and destroy projects.

Share

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

Subscribe now

Share Energy Talking Points by Alex Epstein

Tell your Rep to vote NO

The corn lobby, joined by many oil lobbyists, is pushing a bill to expand the ethanol mandate by 1) loosening air quality rules and 2) imposing the mandate on small refineries. This will raise fuel costs.

Stop corn + oil lobbyists from permanently expanding the ethanol mandate!

Congress is voting tomorrow on whether to expand the ethanol mandate

Tomorrow, Congress is voting on the absurdly-named “Nationwide Consumer and Fuel Retailer Choice Act,” which expands the government’s immoral and costly mandate that we consume billions more gallons of corn ethanol than we would freely choose to.

The new bill permanently expands the ethanol mandate by

1. Congressionally loosening the air quality rules that currently serve as a check on how much ethanol can be forcibly injected into our cars

2. forcing more small refiners to comply with the mandate by significantly reducing their “small refinery exemptions.”

Advocates of expanding the ethanol mandate not only have the gall to pretend they are increasing freedom when they are reducing it, they are also pretending they will lower fuel prices when in fact expanding the ethanol mandate can only raise prices.

Here’s why the ethanol mandate increases fuel costs while providing no benefits (except to corn farmers and lobbyists), and why expanding it will only make fuel costs worse.

Note: I use “the ethanol mandate” as shorthand for the Renewable Fuel Standard, which mandates the use of ethanol as well as certain other biofuels.

Tell your Rep to vote NO

The ethanol mandate directly increases the price of fuel by forcing us to buy ethanol when it’s more expensive

The ethanol mandate forces around 7.5 billion gallons of ethanol into gasoline each year that would likely not be used in a free market (assuming most gasoline would be E5 in a free market). Thus, when ethanol is more expensive than gasoline, the mandate raises costs by 7.5 billion times the price differential of ethanol and gasoline.1

In 2025, when ethanol was roughly 40-50 cents per gallon more expensive than wholesale gasoline (after accounting for ethanol’s lower energy density), the ethanol mandate could be estimated to add replacement costs of over $3 billion, or over 2 cents per gallon.2

Supporters of the ethanol mandate like to point out that ethanol can be cheaper than gasoline when oil prices are high—as is the case right now.

But any modest benefit from cheaper ethanol would occur in a free market in fuel with no mandate—because retailers and consumers could freely choose higher ethanol blends when they were cheaper. Yet the corn lobby has repeatedly rejected fuel freedom proposals.

A new E15 law would make no difference to prices this year, since current law already lets the federal government allow year-round E15 on a case-by-case basis—and it has already done so this year.

Ethanol lobbyists don’t want Congressional year-round E15 for any other reason than to permanently expand the ethanol mandate so we always have to pay for a lot of ethanol—no matter how expensive it is.

The ethanol mandate increases the price of gasoline by up to $0.30/gallon by forcing refiners to buy expensive biofuel credits whose costs get passed onto us

The ethanol mandate has demanded significant investments from refiners into ethanol transport systems and ethanol blending equipment, on the order of billions of dollars so far. To accommodate E15, some gas stations would be required to make upgrades ranging anywhere from $13,000 to $71,000.3

Smaller refiners, who often can’t afford the expensive infrastructure to blend ethanol, are forced to buy biofuel credits called RINs from refiners that blended extra ethanol. These biofuel credits become a compliance cost, much of which is passed on to consumers through higher fuel prices.

A small refinery producing 60,000 barrels/day (920 million gallons/year) might be required to “retire” roughly 140 million biofuel credits. At recent biofuel credit prices of $2, that would cost $280 million. The refinery might only have a $200–400 million net income, forcing it to pass a significant portion of the cost on to consumers.4

A recent study found that attaching biofuel credits to a biofuel increased its price by almost the same cost as the credits. At today’s biofuel credit prices, this implies the ethanol mandate may add up to 30 cents per gallon to gasoline.5

Expanding the ethanol mandate to small refiners will increase costs by decreasing competition

EPA currently grants “Small Refinery Exemptions” from the ethanol mandate to some small refineries on the basis that they would face significant economic hardship from having to buy enough biofuel credits to comply.

In 2025, EPA retroactively granted 63 full and 77 partial Small Refinery Exemptions from the ethanol mandate for the years 2016-2024. The exemptions totaled 5.34 billion biofuel credits—about 3% of the biofuel credits mandated over that period.6

The “Nationwide Consumer and Fuel Retailer Choice Act” significantly reduces the number of small refineries that can get exemptions from the ethanol mandate, and makes it nearly impossible to get a full exemption. This may put small refineries at risk of shutting down, reducing refining capacity and competition and thereby increasing fuel prices.7

Other costs of the ethanol mandate include damage to older vehicles, time wasted due to less energy-dense fuel, and higher food prices

The ethanol mandate adds vehicle incompatibility costs because tens of millions of vehicles and engines on the road and sea (including cars and trucks before model year 2001, most motorcycles, and most boats) are not built for fuel blends above E10 and may be damaged or lose warranty coverage if forced to use them.8

The ethanol mandate adds time costs because ethanol contains about one-third less energy per gallon than gasoline. As a result, E15 gets about 1.5-2% fewer miles per gallon than E10 and 3-4% fewer than E5.9

The ethanol mandate adds food costs by diverting large amounts of corn from food and animal feed into fuel production. One 2021 analysis estimated that in 2019, the mandate cost livestock farmers about $3 billion in lost revenue and increased consumer costs by 1.1% for beef, 1.2% for pork, and 1.8% for poultry and eggs.10

Why corn lobbyists and oil lobbyists have joined forces to expand the ethanol mandate

Corn lobbyists have long wanted to expand the ethanol mandate because it means more demand for corn. But this time, many larger oil companies have decided to join with corn lobbyists on an ethanol mandate expansion that reduces “small refinery exemptions” that are sometimes “reallocated” to them.

One of many unjust components of the ethanol mandate is that when it gives small refineries exemptions from the obligations of the mandate it allows (not requires) the government to “reallocate” those obligations to larger refineries—often at huge cost.

Both large and small refineries are against “reallocation,” and would support a bill to abolish the practice. But the corn lobby wants as much “reallocation” as it can get, since that means more government-dictated ethanol.11

Since larger oil companies don’t think they can get a bill to eliminate reallocation, they have chosen (in my view improperly) to join forces with the corn lobby to support a mandate expansion that drastically reduce small refinery exemptions—so that they have less risk of having to pay for “reallocated” ethanol obligations.

It is also not lost on them that reducing small refinery exemptions is extremely harmful to their competition, which can mean higher fuel prices and ripe acquisition targets.

Large oil companies have, above all through the powerful and well-funded American Petroleum Institute, decided to spend a lot of money and political capital on an ethanol mandate expansion that will protect them from some unfair “reallocation” but also unfairly harm their smaller competitors.

While this move is understandable, it is absolutely not a good move for American consumers—and all the claims that it is are self-serving propaganda.

Tell your Representative to vote No on the “Nationwide Consumer and Fuel Retailer Choice Act”

E15 supporters have said it’s “not a mandate” (Rep. Derek Schmidt) and “it’s ultimately about retailers engaging with consumers” (Rep. Adrian Smith)—but they continue to reject proposals to allow all blends of ethanol and gasoline in exchange for phasing out the ethanol mandate.12

Legislating year-round E15 would absolutely expand the ethanol mandate. The mandate already forces US gasoline to be about 11% ethanol, which is pushing the limit of today’s E10-dominated market. If Congress passes year-round E15, EPA will have the green light to force US gasoline consumption to be 15% ethanol or even more in the future.13

The right position is to let all fuel blends compete freely on an open market without mandates or subsidies. If ethanol supporters genuinely believe their product is competitive, they should welcome fuel freedom via the repeal of the ethanol mandate. Insofar as ethanol is truly competitive, it doesn’t need a mandate.

Click here to use AlexAI to send a personalized letter to your Representative opposing the ethanol mandate expansion.

Tell your Rep to vote NO

Michelle Hung, Daniil Gorbatenko, and Steffen Henne contributed to this piece.

Share

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

Subscribe now

Share Energy Talking Points by Alex Epstein

John Coogan

Up next, we have Alex Epstein, the author of Fossil Future, live in the TBPN Ultradome, taking us through what’s going on in the world, what’s going on in energy markets, what’s going on with OPEC.

Great to see you again, Alex. Thank you so much for taking the time to come on down to the TBPN Ultradome.

Please, get us up to speed. What should we be paying attention to?

Jordi Hayes

Look at this black on black.

John Coogan

You look fantastic.

Alex Epstein

Oh, thank you.

Jordi Hayes

With the hair too.

Alex Epstein

Oh my god. Do you guys remember what we talked about last time?

Jordi Hayes

The Strait?

Alex Epstein

The Strait. Yeah, yeah, yeah.

So by the way, interesting fun fact about AI. I think most of what I said last time was vindicated in terms of the main thing was this Strait needs to open and there’s no substitute for it. There are all these other little things you can do, but nothing compares. And that’s still true.

I would add: you need to enduringly open the Strait. So if you cut a deal with Iran and they have control over it—even if they give you control for a year or whatever, that’s not—then you’ve actually made the situation way worse than it was before the war, where everyone figured we really have control over the strait.

John Coogan

Yes.

Alex Epstein

But fun fact, since you’re talking about AI tokens. So in preparation for that—in addition to consulting experts and thinking about the issue—I have my own internal AI called AlexAI Pro, which I’ve invested over a million dollars in.

John Coogan

What!

Alex Epstein

Oh yeah, it’s nuts. So to talk about—and one of the things I’ve invested in is—

John Coogan

A stack.

Alex Epstein

Yeah, yeah. I don’t get enough compute from off-the-shelf AI. So if you can run your own agents, then you can do it. So that query, which I think led to very valuable content, was 48 kilowatt-hours.

John Coogan

Wow.

Alex Epstein

So that’s half a Tesla.

John Coogan

Yeah.

Jordi Hayes

Wow.

Alex Epstein

Think about that. That’s three power walls for one query.

John Coogan

That’s a ton.

Alex Epstein

Yes, I know.

Jordi Hayes

How long was that running for?

Alex Epstein

10 or 20 minutes.

John Coogan

What? That’s crazy. And what is it doing? Pulling data from the internet, pulling it together, writing?

Jordi Hayes

It’s like God Mode—

Alex Epstein

It’s really God Mode. I’ll show it to you sometime.

John Coogan

Okay.

Alex Epstein

Well, actually, so here’s an announcement for the first time—a version of that AI is now free to everyone who works in government. So it’s gov.alexepstein.ai.

John Coogan

No way.

Alex Epstein

Yeah, yeah. So it’s free—if you use too many tokens, we’ll have to just charge you cost beyond that.

John Coogan

Okay. Okay. Yeah.

Alex Epstein

But yeah, I mean, I have a lobbying firm—which is the only pro-freedom lobbying firm—the Energy Freedom Fund, which is a 501(c)(4) that I’m the unpaid president of. And I figure one of the best ways to spend those dollars is to give people a pro-freedom AI. So I’m not going to make any money off those queries, but I’ll at least cover our compute costs.

So this is a real world example of—I believe that if you know how to intelligently integrate AI, you can make use of a lot of energy and very profitably.

John Coogan

Sure, sure, sure. Yeah, of course. Because the results that come from good research or good policies and good consulting fees and all sorts of things.

Alex Epstein

But you need to train it. So a lot of the work is just literally breaking down everything I do and my researchers do. So I just built one today, which is the policy validator. Anyone is free to send us policies and we’ll lobby for them in proportion to merit, not in proportion of payment. We don’t take payment for this kind of thing.

John Coogan

Interesting.

Alex Epstein

But I needed to replicate, hey, I have these two really brilliant researchers, and then I’m pretty good, and we have some other pretty good people. How do you break that down?

And it turns out there are about 25 questions you need to ask to get the credibility of the people. Is this a pro-freedom policy? Is this going to increase energy abundance? Are there better ideas? And if you know how to really do it—and you have human validators at the end of it—it’s wild in terms of what you can do.

John Coogan

Okay. Let’s start with—on the Strait, there was this interesting piece in The Economist that was arguing that the market was simply not processing or digesting the fact that even if the Strait were fully open today, there’s still a massive shortage of energy that is effectively delayed and that that would have ripple effects on the economy, inflation, all sorts of things. How have you processed the impacts, the downstream impacts?

I think a lot of people see it at the pump when they go and fill up their cars if they drive gas cars. It’s starting to show up in other places, but how are you thinking about just what’s at stake, why the Strait being open is important from first principles?

Alex Epstein

Yeah. I’m very sympathetic to that argument. It would be just miraculous if it didn’t get a lot worse in terms of prices. I mean, you’re dealing with a situation we talked about last time. You have a certain amount of spare capacity. So international agencies released a lot—a reasonable amount—

John Coogan

Of oil reserves.

Alex Epstein

Yeah, yeah, in terms of their oil reserves, but these are all very temporary measures.

John Coogan

Yeah. It’s like 30 days here, 90 days there, 180 days over here.

Alex Epstein

Yeah. And there was already a bunch of supply.

John Coogan

Yeah. No one’s sitting on 5,000 days of oil.

Alex Epstein

And the thing you have to realize is, in America, we are very America-centric. We don’t even think about Canada, let alone Asia. And a lot of what’s happening with the Strait is oil that is intended for Asia and Asian consumption.

Now, the Chinese are in an interesting situation because they did build up a bunch of spare oil. Now there are questions of other things they need—like sulfur and helium—that go through the strait. And I’ve heard interesting claims about that.

But we’re already seeing in Asia various shortages, and one analyst that I like likened it to, okay, one part of the Titanic is starting to fill, and not everyone on the Titanic realizes this is happening, but you’re cutting off a huge—whether it’s 14% or 20% or whatever—you’re cutting off a huge percent of global oil supply, and that cannot last. And even if you solved everything today, it takes a while to bring it back.

John Coogan

Of course.

Alex Epstein

And right now we’re in ceasefire mode, which is not creating enduring—that doesn’t enduringly open it up.

John Coogan

Yeah. Yeah. I heard, I think it was Rahm Emanuel who was saying that the Gulf states do not want Iran to have a veto over the strait, even if the strait is opened. Now the conversation has shifted to: What does it take that America is potentially responsible or is being held responsible for removing that veto, right? Is that your perception as well?

Alex Epstein

Yeah, yeah, yeah, that’s my perspective; it needs to be enduring. In advance of this, there was the idea that, hey, if America ever goes into Iran, obviously we’re going to keep the Strait open, obviously we’re going to prioritize it. That unfortunately did not happen to the extent that it did.

I mean, there are different people in the administration, but overall—I mean, we have to just be objective; I’ll praise them where they deserve praise—but they were not prepared for this in terms of whatever the final decisions were.

I think within a week of our last interview—not because of our last interview, but just talking to people in the administration—they all became very clear that Hormuz is non-dispensable. Before that, there had been people saying, “Oh, we have Venezuela. We have all these”—just all nonsense. So they understand it’s—

John Coogan

We talked about that with Venezuela. It’s like 1% maybe.

Alex Epstein

Yeah, 1, well, you might get to 1. Now, at some point—

John Coogan

Might get to 1% and we’re talking about 20%.

Alex Epstein

Yeah, we’re talking about years and years.

John Coogan

Are there 30 Venezuelas? No. There’s no one to do business with.

Alex Epstein

Yeah. They understand the importance, but it’s still in this mode where Iran now is known to have—look, Iran has proven that they can control the Strait of Hormuz in a way that the US cannot obviously counteract. So if we cut a deal with them again where they can use the same power to stop us anytime they want, then it’s not open.

“Open” is a little bit ambiguous. It can be open momentarily, but it’s open on their terms. So basically you need—without giving any strategy, because I don’t know the exact strategy—it needs to open on our terms. That’s the only way you have a victory.

John Coogan

Let’s shift to OPEC. Can you give me a primer on OPEC? It’s the Organization of Petroleum Exporting Countries.

Alex Epstein

Yeah, yeah. And now it’s OPEC+ and—

John Coogan

OPEC+. Yeah, take me through the history and the impacts and importance.

Alex Epstein

Let’s talk about cartels. I think the easiest way to understand this—it’s important to understand cartels. And I think people have a uniformly negative view of cartels, which is plausible, but a little bit exaggerated. So you take the—

Jordi Hayes

People that aren’t a part of cartels.

John Coogan

There’s no “I” in cartel.

Jordi Hayes

Yeah, exactly.

Alex Epstein

Well, so you think about the—if we look at the early oil industry where Rockefeller is criticized as a “monopolist” and we created this thing, the Sherman Antitrust Act, and other things to prosecute so-called “monopolists.” And I’m totally against these laws for any number of reasons. The government should not be able to create monopolies that it enforces by force saying, “Hey, there’s one producer, nobody can compete.” But nor should it be able to say, “Hey, you’re really successful in this market—

Jordi Hayes

You’re too good.

Alex Epstein

—and so I’ve decided that you’re too good.” And one of the things that people counter with is, well, what if—

John Coogan

Economic deadweight loss.

Alex Epstein

What do you mean?

John Coogan

Just the idea that if you actually do control 100% of a resource, you can charge dramatically above market rates, which reduce demand and wind up having less human flourishing because you have less energy produced, in fact.

Alex Epstein

Yeah, so what happens in practice is, if you look at what happened with Rockefeller—Rockefeller’s focus was refining—but you look at the early people in the oil industry, the different producers, what would happen is oil prices are decent, then you get a flood of new oil on the market and people just get wasted. They get ruined. And so what does that do? That disincentivizes people from investing over time because the volatility is so high.

So what Rockefeller was basically able to do is he said, okay, I’m going to buy you up. You’re exposing yourself to way too much risk. I’m going to buy you up. I can run everything much more efficiently. And so in the long term, we can have something that is A) profitable and B) has much lower prices on average than the very volatile situation. And in fact, he dramatically lowered prices.

So the interesting thing—so you could think of Rockefeller, they call it—it’s in a sense a cartel, but it’s a free market cartel, which I think should be able to exist, but you can call it—

John Coogan

Yeah. And I believe that’s in the Sherman Antitrust Act in some ways. You have to prove consumer harm, and this is why it’s hard to go after Amazon, Google—

Alex Epstein

Well, there are later versions. I mean, it’s very vague. It’s like you can’t do “restraint of trade,” which—what the hell does that mean? And then later they have these different things. And I have a lot of reasons for being against it, but it’s notable that the volatility is a really, really big thing in oil markets historically, and that’s why people—

John Coogan

And that yields big organizations—

Alex Epstein

Whether or not you think free market cartels should exist, as I do, you have to understand why these things exist. Why any cartels—OPEC is not a free market cartel—but why these exist is because the volatility is just so, so high and oil is so, so valuable. So people want steady oil and they want people to be comfortable being in the oil business instead of just getting wrecked all the time and getting thrown out.

So we had this era of Rockefeller and then that was broken up. And then the United States had something called the Texas Railroad Commission, which basically cartelized—America was the dominant producer and so they did these things that basically rationed how much everyone could produce.

So the term that’s often used is “swing producer.” The US was the swing producer, which meant that they could basically control the supply in the world. And in particular, if there was a cut in demand for some reason, they could cut supply. And if there’s a huge increase in demand, they could increase supply.

So that happens until the Middle East starts to boom, and then the Middle East starts to become the swing producer with the rise of Saudi Arabia and others having very low cost oil. And so then you have the era of OPEC. But then you have fracking. And so for a little while, the US becomes the swing producer in the sense of we have unrestrained production, we add a lot of oil to the market.

And what happens at a certain point is prices crash, there’s overinvestment. Our US consumers benefit hugely from fracking, but a lot of these companies just get wrecked. And then they start doing what they’d call fiscal discipline, which functions as a restraint on supply. Even though they’re not doing any kind of cartel activity, they’re basically saying, “Hey, we’re not going to produce if prices go below this. We’re not going to keep increasing our production,” etc.

The reason, if you take OPEC right now and OPEC+, they have a lot of reasons—even though there’s a lot of unethical stuff and I don’t think the government should own the oil and I think they stole the oil. But if you just understand how they’re thinking, they want to sustain a certain level of price.

So you have the different swing producers, particularly Saudi Arabia and then UAE who we’re talking about—what happens if there’s excess supply on the market relative to demand? They will cut—this is the key—they will cut their supply as a swing producer to keep prices high. Because if they don’t, then prices will go low and that will have a ruinous effect on many people—including US shale by the way, because we have higher production costs—but including these economies that are dominated by oil.

So you take Saudi Arabia—they’re so dependent on oil and they have all of these alleged “green” ambitions that are totally fueled by oil and they have all these welfare schemes that are totally fueled by oil. UAE is a little bit less dependent.

So the interesting thing about UAE saying they’re going to withdraw is, can they sustain this if there’s a supply glut? Right now there’s a supply shortage. So it’s easy to say, “We’re going to leave OPEC,” because there’s no need from their perspective to cut supply. And then everyone will take all the supply they get. And Saudi Arabia doesn’t really care if UAE produces more now.

But when there’s a supply glut, is UAE—are they going to stay out of OPEC or is Saudi Arabia going to be able to pressure them back like they’ve done? Because Saudi Arabia can say, “We’ve got the most oil. We can just flood the market too and ruin you.”

Jordi Hayes

Is there a history of major suppliers leaving and coming back?

Alex Epstein

I don’t know, I mean, there’s at least been threats. Like Saudi Arabia has been able to use a lot of force. Now, they’ve been able to do that in the past, but the argument—so there’s an argument that the UAE won’t stay out of OPEC because Saudi Arabia can pressure them back in when there’s a supply glut.

There’s also an argument that UAE has become more disentangled from oil now than it used to be because it’s diversified its economy. It doesn’t have all the welfare obligations of Saudi Arabia, and therefore it can call Saudi Arabia’s bluff.

Now, people will say both UAE and Saudi Arabia have incredibly low production costs. It’s very cheap for them to bring a barrel up from the ground. But they don’t just have the production costs; they have all the governmental costs of actually how they’re obligated to spend that oil. If Saudi Arabia spends $5 a barrel on oil, say, that doesn’t mean at $100 a barrel, they get $95 profit because they have to finance all these schemes that they’re involved in.

John Coogan

Sure.

Alex Epstein

So that’s going to be an interesting thing. The other interesting thing is—so if UAE stays out, they’re going to increase production. Let’s say on some timetable this Hormuz thing gets resolved. Then it’s plausible in the next few years at some point you’ll have a supply glut because you’ll have added a million and a half barrels a day on top of everything else and you won’t have a corresponding increase in demand and you won’t have some other decrease in supply. So it’s possible that this could dramatically lower prices, which would be hardest for US shale.

Now long term, I believe—the best estimates I’ve seen is longer term—we’re actually screwed in the other direction. We’ve had all of these anti-fossil fuel policies that have disincentivized long-term investment in oil, and oil is really hard to sustain.

People need to remember oil depletes over time. So you don’t just take the same well and keep tapping at the exact same amount. You have to do what’s called reserve replacement. And there are many credible arguments that our reserve replacement has been incredibly inadequate in the ESG era, and that takes a few years to show up, but that’s actually my biggest fear. My biggest fear—I’m afraid of Hormuz keeping prices high, but I’m really afraid of insufficient reserve replacement with high oil demand because you’re talking like $200 a barrel.

Jordi Hayes

That’s drilling new wells or it’s—

Alex Epstein

You have to drill so much. You have to replace so much. And the oil supply is so politically driven. There’s so much oil in the world that you could harness if everyone had the policy of the United States under Trump and under a friendly Congress, but most of the world has these national oil companies. We’ve had ESG all over the place. It’s been hard to finance things.

I mean, as recently as 2021—think about this—the International Energy Agency said, “There should be no new oil and gas development financed.” So we could be really screwed in terms of higher prices.

John Coogan

I mean, geographically, it’s coming up on the map there. The UAE is directly affected by Hormuz.

Alex Epstein

Yeah.

John Coogan

Every barrel that they make will have to go through the strait.

Alex Epstein

Well, they have a pipeline.

John Coogan

They do.

Alex Epstein

They have one pipeline, but it’s about a million and a half barrels.

John Coogan

Okay. So they can get some out so—

Alex Epstein

Yeah, but they’re—Oh, yeah.

John Coogan

So if they become a swing producer, they are in fact important even in a world where the strait is closed.

Alex Epstein

No, no. It doesn’t matter as much right now because they’re saying we want the right to expand our production, but none of them can produce nearly as much as they want right now. This is why they’re doing it now. They’re not doing it in the time of a supply glut. They’re doing it in the time of a supply shortage because nobody really cares.

It doesn’t really affect things for them to say, “Oh yeah, we have a million and a half spare capacity that we’d like to use and we’re planning on using into the future, but right now we can’t bring most of that to market, and no one can bring anything to market.”

That’s different from a situation that we’ve had fairly recently where there’s tons of supply on the market—there’s too much, and US producers are saying, “Hey, we’ve got $50 a barrel oil. This is really hard to sustain.” Imagine then a million and a half new barrels coming on the market.

Jordi Hayes

Who wins? Who saw the news this morning and was fist pumping?

Alex Epstein

Well, I don’t think most people understand the consequences of these things because I think many people think, oh, it’s going to be amazing for the US. OPEC bad, US good. But OPEC, the way it’s set up, it in a sense favors our shale producers because they’re one of the set of higher cost producers in the world.

Jordi Hayes

So if OPEC collectively decided to just massively increase supply and flood the market, they could do real damage to our shale.

Alex Epstein

And this has happened already.

Jordi Hayes

Yeah.

Alex Epstein

This has happened in the previous year.

Jordi Hayes

Yeah. Like you’re saying, if you’re in shale and you’re trying to make money at $50 a barrel, you’re really hoping—what’s the sweet spot again? It’s like somewhere between 70 and 90.

Alex Epstein

Yeah. I mean, sweet spot is interesting because they’ll take whatever they can get. But yeah, if they get to 70, 80, 90, it’s a lot more profitable. And basically, not much changes about their cost structure when prices go low. So it’s almost pure profit.

I mean, a little bit they can squeeze from what are called the oil field service companies—but when you’re thinking of oil and gas, particularly oil, you’re just thinking every $10 that goes up, that is almost pure profit for them. And every $10 that goes down, that is almost pure loss of profit or loss in absolute terms.

Now in terms of policy, look, I think we should forcibly reopen the Strait. And I don’t believe that the US government should be directly trying to favor or disfavor its shale companies, but it’s just important for people to understand these dynamics. And also you have to understand the UAE is doing this at an opportunistic time. They’re not doing it at a time when there’s already a supply glut.

John Coogan

Sure. Shifting gears, where do you want to go?

Jordi Hayes

I wanted to ask you about beaming sun—

John Coogan

I had the exact same question—

Jordi Hayes

—down into solar panels so that you can get 24—

John Coogan

Yeah, Meta announced that they’re going to do something.

Alex Epstein

In space?

John Coogan

They’re going to put a mirror in space that shines light onto a solar array so that they can get 24/7 power to a data center potentially.

Alex Epstein

They’re going to do it on Earth?

John Coogan

The recipient of the light will be on Earth, the solar panel next to a data center, but there will be a mirror in—there’s a specific orbit that is always in the sun. And the sun will hit the mirror and the light will bounce down onto this particular solar panel in their solar array. And so they will be able to get power from their solar panels 24/7.

Alex Epstein

There’s no weather that interferes with this?

John Coogan

Weather might interfere a little bit.

Alex Epstein

Okay. So I have not—

John Coogan

Closer to 24/7 than current.

Alex Epstein

I mean, here’s the dynamic: obviously in space, you have 24/7 solar, and it’s really hard to do things in space. So all credit to people who are willing to invest their own money to try to do this. There are a number of variables that might make it succeed or not.

I mean, the more you’re talking about chips that are evolving very quickly on Earth—because we don’t have this moon colony yet—you’re talking about replacing chips every year, you’re doing these very logistically difficult things in orbit. That tends to disfavor the energy advantage you’re going to get from having the stuff in space. If you’re doing something that—some of these solar things work if the energy cost is high and you don’t need to change a lot about it, if it can run a long time.

So my view of solar is always, you need to recognize its strengths and limitations and use it accordingly. My argument continues to be on Earth—with the solar that we have right now—solar is primarily a fuel saving technology, not a real on demand power source. And I wrote a long article about this, go to alexepstein.substack.com to check it out.

By the way, that means that in some places, solar is a lot more valuable than others. And in particular, it’s valuable in places with very high fuel costs, which the United States is not really one of those places because we have really cheap natural gas and could get cheaper natural gas.

But in general, what we don’t have, what the holy grail would be is if you got solar and batteries so cheap that you could have self-sufficient solar by sufficiently overbuilding the panels and having multi-day battery storage.

So overbuilding the panels means—let’s just say round numbers—you have a hundred megawatts of demand in a given location, so one tenth of a gigawatt. Well, if you overbuild it by 10, then you have a gigawatt. Well, even when the sun is fairly low, you’re going to be able to meet your demand and then you can—

John Coogan

Especially with batteries.

Alex Epstein

Right. And then you can get rid of it and then you can charge the batteries. So you have more to charge the batteries. But then to make that work—because sun is not around at night, people really underestimate this as a problem. It’s not as much of a problem for wind, but it’s a big problem for sun; night is a huge, huge, huge problem.

So you need to then—and think about a winter day like we had during Winter Storm Fern. Even in Phoenix, you can have storms that disrupt the sun for a week. So you need lots and lots and lots of batteries, and you need lots and lots of overbuilding. And the question is, how cheap can you get it? And China’s not even nearly there yet, let alone the US, but it’s not a bad path to pursue.

It’s not bad to pursue because batteries are valuable anyway. Batteries are valuable, number one, to store reliable power and dispatch it. And Elon is in favor of that, and I’ve said on the show before, I’m in favor of that—so it’s good to get the cost of solar lower. It’s good to get the cost of batteries lower, but you have to recognize primarily it’s a fuel saving play, not a replacement play. But if we had 24/7, all bets are off. Then you get the benefits of solar all the time.

John Coogan

That’s the space mirror.

Alex Epstein

I hope that—as long as they’re doing it in a safe way, they should be free to try. And it’s interesting—the schemes I’ve seen in the past haven’t worked, and I don’t know if they have better energy people than they used to at Meta, so we’ll see.

John Coogan

We’ll see. Well, thank you so much for coming on the show.

Alex Epstein

Hey, man. Good to see you.

Jordi Hayes

Yeah, wish we had more time.

John Coogan

Have a good rest of your day.

Alex Epstein

Alright. Anytime.

Share

Questions about this article? Ask AlexAI, my chatbot for energy and climate answers:

Try AlexAI for free

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

Subscribe now

Share Energy Talking Points by Alex Epstein

Read until the end for a demo of my newest AI product: AlexAI Gov, an extra-powerful version of AlexAI available for free to all government employees.

Alex Epstein

Show of hands, how many of you think of yourselves as pro-human? Anyone think of yourself as anti-human?

Are you guys willing to be challenged? Because I actually think that almost everyone, Republican and Democrat, has accepted anti-human ideas that mess with the way they think about energy and environmental issues, and that’s what I’m going to talk about today. By the way, this has certainly been the case with me. It’s taken a long time for me to expunge anti-human philosophy from my thinking.

Today I’m going to talk about how to reframe energy and environmental thinking from anti-human to pro-human. I think this is going to be one of the highest leverage things you can get as attorneys, because the depth to which anti-human thinking has messed up these issues—your ability to think about them, your ability to argue them, how your audience is thinking about them—so even if you don’t think about them in any kind of wrong way, your audience does. I think you’ll find this enormously clarifying.

Certainly what I’m going to share with you today I regard as the root of the success I’ve had persuading a lot of people to think differently about energy and helping a lot of policymakers make better policy. I’m not just going to show you how bad the thinking is and what the anti-human framework is; I’m going to show you the complete pro-human framework.

And then probably most valuable, I’m going to share with you three powerful tools to apply that framework, including an AI tool that—I don’t have any fear of exaggerating—will change your life. And it’s now free to you, if you work in the government, it’s free to you. If you don’t, you have to talk to me separately.

Let me go into what I mean by framework, quickly. Framework is a term that’s used a lot—it’s not usually defined. I think of a framework as a starting structure. So you think, in a physical context, a building has a framework. The starting structure of the framework has enormous determination on how the building turns out. Same thing with a car. Same thing with any kind of physical object that’s planned.

The exact same thing is true for our thinking and our communication. Whether we know it or not, whenever we think about something, we have certain starting points in our thinking that then affect so much else about how our thinking proceeds.

When we have a conversation, we have certain starting points, and I’m going to go through each of these starting points in some depth. But just to give you a preview, one is called your standard of evaluation, which is how you view—how you measure good and bad. Two is your fundamental assumptions, how you think the world works.

Number three is your method of evaluation, how you evaluate and think about competing technologies, and then fourth is your terminology, and that involves all of these things. What words you use and what words you don’t use. There are a lot of words I would advocate you not using that we very commonly use—things like “renewable” energy or “capacity” of solar and wind.

Let’s start off with standard of evaluation. With each of these, what I’m going to do is I’m going to say what the issue is, I’m going to prove beyond a reasonable doubt that the prevailing way of thinking, of using it, is anti-human, and I’m going to give you the pro-human alternative.

What do I mean by standard of evaluation? Well, standard is a measure of something, and evaluation is—how do we value it? Do we disvalue it? Is it good? Is it bad? How good? How bad? In particular, I want to talk about our environmental standard of evaluation. How do we think about environmental issues? What do we think of as good or bad, environmentally? The prevailing standard we have is really bad, and I want to show you an example of this.

This is a chart that I’m somewhat known for. What it shows is two things juxtaposed: so, one is the fact that we have rising CO2 levels—which I believe is caused dominantly by the combustion of fossil fuels—and number two is that we have an absolute plummeting in the death rate from climate disasters, which are the things that we’re supposed to be worried about by burning more fossil fuels.

What you can see is we have affected the climate in a certain way. At minimum, we’ve changed the amount of CO2 in the atmosphere from a little under 0.03% to a little over 0.04%—and I believe it’s had some other changes in terms of warming and certain consequences of warming—but nobody has refuted that we are at peak climate livability.

You have never been safer from climate. If you think about today versus 100 years ago, would anyone here—from a survival perspective or even an enjoyment perspective—prefer the climate of 100 years ago? No.

Here’s the interesting thing, though. If you take most of our so-called “experts” on this issue, they call the present state of climate—and have for decades now—they call it a crisis. They don’t say, “We’re in a climate renaissance right now, but it’s going to turn into a crisis.” They say we’re in a crisis right now. How is it possible that we have maximum livability for human beings and yet it’s called a crisis? Anyone want to suggest an answer.

Audience Member

They’re saying the trends for the future are—

Alex Epstein

Well, that’s the charitable thing. That’s why—you said that they’re saying the trends for the future, but they’re not just saying that. They’re saying we’re in a crisis now, and the way they portray it is all this hellfire. The New York Times doesn’t say, “Yes, if it just stayed like today, it’s the greatest climate situation humanity has ever faced,” which is exactly the factual case.

What’s interesting is it’s not about the future. I mean, they do have views about the future, that it’ll get worse—and we’ll talk about why they think that and why that’s also a dogma—but it can’t be explained by a scientific prediction about the future. In fact, it can’t be explained by any kind of science, because the science that’s relevant is that human beings are surviving and thriving better in today’s climate, including from a climate death perspective, than they ever have.

So the only thing that can be happening, by people who know this truth—a lot of people just don’t know the truth—but for people who know this truth, is they’re measuring what’s good climate-wise and environmental-wise in an anti-human way, because if you measure in a pro-human way, we’re in a climate renaissance. It’s not just a non-problem, it’s not a problem, it’s a literal renaissance.

Their standard evaluation that they’re using, which I believe almost everyone picks up to some degree—is that a good environment, a good world, a good climate, is one that has a lack of human impact. Notice, the overriding goal of civilization until a couple of years ago was net-zero by 2050, and many of you have companies, many of your companies probably endorse this or associations endorse this, but that was saying our number one goal—they weren’t saying everyone has energy by 2050. They weren’t saying global human flourishing by 2050. They were saying net-zero by 2050.

That was the overwhelming goal that the most political groups—including nations, corporations, investment groups—that was the number one goal. Why? Because they’re on this standard. “Net-zero” just means no impact on climate, so our entire civilization was changing itself to focus on this goal of no impact on climate.

That’s a philosophical thing. It never made any sense from human terms. You would never tell your kid, “Hey, your goal in life should be to not impact the climate.” The easiest way to accomplish that is just to die, and that’s in fact where we were heading in terms of energy policy: this idea of impact is bad, North Korea is the ideal. That’s even too good for human life, for the ideal of low environmental impact. And so this is such a toxic idea, but we accept it all the time.

It’s called being “green.” “Green” means little or no impact, and the fallacy here is we should not be demonizing impact. Impact is how we survive. Impact is not a four-letter word. We absolutely do not want to minimize our environmental impact. We want to minimize negative environmental impact, but that qualification is rarely there.

The pro-human way of thinking of this is that a good environment is not one that is least impacted by humans but one that is most conducive to human flourishing. So, South Korea is a superior environment to North Korea. It’s a superior human environment, and I believe we should be thinking about environment in human terms. That’s number one.

Does that make sense so far? When we think about the world—we think about the environment—we’re thinking of it from a human perspective, not the anti-human perspective of minimized impact.

Just to give you one other way of thinking about this, imagine somebody came up to you and said, “My environmental goal is to minimize bear impact.” What would you think they were trying to accomplish? They’re trying to kill all the bears. Everything survives by impact, so if you’re trying to minimize your impact, you hate that thing and you want to destroy it.

We have a very pernicious phenomenon I call human racism, which is—racism is evil because it’s taking some aspect of human race and saying this group should be marginalized, but the anti-impact idea is saying we should all be marginalized. We’re all inferior. We’re all unnatural. It’s a very anti-human idea, and you see it everywhere.

Once you start seeing it, you see, everyone says, “Let’s minimize our impact.” If people say “minimize impact” in front of me, I don’t care who you are, I’ll say, “No, that is wrong. You should minimize your negative impact.”

Number two is your fundamental assumptions about Earth and humans. Here, again, we have a very, very anti-human way of thinking about it that we’re taught. One of the answers to my original question was, “Well, people are saying climate is going to get worse. That’s why they say it’s a crisis,” but no—they say it’s a crisis now—but they also do say it’s going to get worse.

Notice they don’t just say it’s going to get worse with climate. They always say it’s going to get worse, and their reasons change. Here’s a young Paul Ehrlich, who—can’t really say I’m so sad that his life ended in his 90s, because I think he ended a lot of lives very prematurely because of his ideas—but he was one of the people arguing, “Hey, we don’t have enough resources, including enough fossil fuels.” Basically, there’s not enough fossil fuels, therefore the world was stuck.

But then also, he and others argued, “Well, actually, there’s too much fossil fuels. We’re going to have too many fossil fuels and the world’s going to be overridden with pollution.”

Then it was, “Well, we’re using fossil fuels and it’s going to cause a cooling catastrophe.”

And then, “We’re using fossil fuels and it’s going to cause a warming catastrophe.” Notice that the reasons always shift, but it’s always that catastrophe is somehow inevitable.

The civilization we live in is always “unsustainable”—by the way, do not use “sustainability” as a term. “Sustainability” is a term that comes from—my background is philosophy, by the way, in case you can’t tell—it’s a term that comes from Marxism, and it’s the idea that capitalism is unsustainable. Capitalism is just economic freedom, so it means freedom is unsustainable, and yet companies and lawyers take over these terms. One thing I’m going to caution you against is intellectual parasitism. When your enemy has used terms and you don’t trust them, do not trust their terms.

What’s underlying this—we have this over and over and over. The world’s going to get worse, and yet it doesn’t just not get worse—it gets better, right? We have more usable resources than ever. We have a cleaner environment than ever. We’re safer from climate than ever.

So what’s going on is not just somebody’s wrong in a superficial way. They’re wrong in a deep way, and in particular, they have the idea that the Earth is what I call a “delicate nurturer.” So the Earth in its unimpacted state is stable—it doesn’t change too much; it’s sufficient—it gives us enough as long as we’re not too greedy; and it’s safe—it won’t threaten us too much.

This is the “Gaia” view—and humans are viewed as what I call “parasite polluters,” so our impact consists of taking from the Earth and then ruining the Earth. It’s the “delicate nurturer” versus the “parasite polluter,” and therefore when you see the state of development, it’s always unsustainable, because if we’re impacting things, including impacting climate, it can’t sustain.

So many scientists believe in “delicate nurturer” and “parasite polluter,” but it is total pseudoscience. It’s not even pseudoscience. It’s just the opposite of the truth. The truth is that Earth has what I call wild potential, so it’s not stable, it’s dynamic; it’s not sufficient, it’s deficient—that’s why the cavemen were poor, even though there were so few of them—and it’s not safe, it’s dangerous.

What do we do to it? We produce new value. That’s what we did with oil and gas. I’ll give you another trick question. Who here agrees that oil and gas are valuable natural resources? Raise your hands. Who believes that they’re not? I told you, it’s a trick question. You’re all wrong.

Was oil a valuable natural resource in 1850? No, it was a nuisance. You were trying to find salt, and oil got in the way or whatever—so oil is not naturally a resource, it’s not a natural resource. Human beings made it a resource, and that’s what we do, right?

We take the raw materials of Earth—which have certain inherent physical potential, but usually aren’t resources—and we turn them into resources. So we are producers. That’s why the world keeps getting wealthier and that’s why it can sustain forever—not just sustain, but progress. And so we’re not parasites, we are producers, and we’re not polluters primarily. We can pollute, but we also improve.

Do we have more clean water now than we did 100 years ago? Yes or no? Yeah, we have way more. Why? Because nature didn’t give us Evian and Perrier flowing all over the place, and then fracking ruined it. That’s a narrative that gets bought into. It’s just like, “Oh, we didn’t pollute anything.” Well, it’s a lot better than that. Drinking water is usually naturally distant and dirty, so what do we do? We use energy to pump it and purify it, and that’s a lot of the reason why we have a good environment.

When you see the Earth wealthy and us consuming a lot of stuff and even having quite a few byproducts, that’s not unsustainable. That’s ever improving, and dare I say the P word, it is progressive. I don’t know why pro-freedom people want to abandon the term progressive. Freedom is progressive. Anti-humanism is regressive.

Okay, so we have standard of evaluation, which should not be minimizing our impact; it should be what I call maximizing flourishing. And our assumption about Earth and humans should not be the delicate nurturer and the polluter parasite; it should be wild potential and the producer-improver.

Now let’s talk about our method of evaluation. So how do we compare different forms of technologies? The anti-human method is very stupid when you look at it directly. It just makes no sense how we think about fossil fuels. But it’s important that this was pioneered by anti-human thinkers. It wasn’t an accident.

Because the way we think about fossil fuels, and I kind of became famous for this, but it’s sort of the stupidest thing ever to become famous for. All I basically said is we need to look at the benefits of fossil fuels. There was this, whatever, $4 trillion industry and no one was talking about benefits; people were only talking about the negative side-effects, particularly in a climate context.

Basically, I said, well, this violates good thinking, because in good thinking we want to be even-handed. We want to look carefully at positives and negatives. If you’re going to the doctor, you want the doctor to give you the benefits and the side-effects of all the alternatives, and you want them to do it with precision. If the doctor only gave you the negative side-effects, that would be a very bad doctor. If they only gave you the benefits, that would be a very bad doctor.

And yet, what we see is this incredible tendency to, with fossil fuels, ignore the benefits, and then what I call catastrophize the side-effects, so make it seem like they’re the end of the world. Then often with solar and wind, it’s the reverse. Only talk about benefits and don’t talk about any negative side-effects.

The biggest violation of this—and the most unforgivable violation of this—is from what’s called the Intergovernmental Panel on Climate Change, which is the UN’s allegedly scientific entity for assessing these issues. They come up with lots of different reports, and these reports—if you ever have to go through them—are thousands and thousands of pages.

And the cliché point that conservative lawyers will make that is true is that the scientific claims in these reports are not nearly as extreme as what’s reported in the media. That’s true for sure, but the more interesting thing I think is that these reports are pure fossil fuel benefit denial. They don’t talk at all about the broad benefits of fossil fuels, but in particular, they don’t talk about the climate-related benefits of fossil fuels. Remember, we have an amazing decline in climate-related disaster deaths, which, if you think about it, is obviously related to having a lot of energy, which is obviously related to fossil fuels.

Who knows the number one climate killer, historically? Can anyone guess? Cold is close, but there’s a bigger one. Dung? That’s trivial compared to this. It’s drought, right? Because drought leads to famine and famine leads to death. So drought-related deaths have gone down over 99%, and we basically don’t have drought-related deaths in the United States anymore. But just 100 years ago, you would have millions of people—even not adjusted for population—dying frequently from drought.

Why don’t we have that? We have fossil fuel powered irrigation, which can alleviate a lot of drought, and we have fossil fuel powered crop transport, which, if you still have drought—you don’t need irrigation, people can still bring you food. They can also still bring you water. We can do the same thing for heating and air conditioning, for sturdy buildings, for storm warning systems.

Fossil fuels are fueling our mastery of climate. The way I put it is fossil fuels didn’t take a safe climate and make it dangerous. They took a dangerous climate and made it safe, and yet this whole report doesn’t talk about this at all.

It’s pure fossil fuel benefit denial. It’s a 1000-plus page report. They don’t once mention that climate-related disaster deaths are at an all-time low. This would be like a polio report that didn’t mention, “Oh, by the way, polio is a lot less of a problem than it used to be”—I think overwhelmingly because of vaccines and then also sanitation.

There are other examples, and one that might hit home for many of you is, when you think about health effects—so when people talk about health effects of fossil fuels, and even in statute, it’s often required that you do this—it excludes the fact that fossil fuels are the best thing that ever happened to human health, because they give us ample and healthier food and water, because they power modern medicine, etc.

And yet you can’t talk about—either people don’t talk about it, or even sometimes you’re not allowed to talk about it in EPA analyses because the Clean Air Act is such a bad piece of legislation. You cannot talk about the benefits, and yet the health benefits of fossil fuels, even just compared to particulate pollution, are so great.

The opposite—in terms of a method—you do not want to be biased; you want to be able to spot bias. You want to be pro-human and even-handed. And that’s really what my work does.

That’s really all my work is, saying hey, I’m going to measure good and bad by what’s good for humans, and I’m going to reject this anti-human idea of eliminating or minimizing our impact, and I’m going to carefully weigh the pros and cons of different forms of energy. That’s really all I’ve done. The facts are quite obvious and indisputable once you do that.

Let’s talk a bit about terminology, because all these bad ideas in terms of the standard of evaluation, the assumptions, the methods—they get embodied in bad terminology. One good thing about Fossil Future—I’ll give you some easier resources—is that it challenges all the terminology. You can see what I think is good and bad terminology.

Just to give you some ideas, I hate, hate, hate, hate, hate, “minimize environmental impact,” because we survive by intelligently impacting our environment. So the idea of saying we should minimize it is bad. You want to minimize our negative impacts. The pro-human thing is you want to minimize negative impacts, but you want to maximize pro-human ones.

Another one, and this one is even more so, I hate, hate, hate, “protect the environment.” Protect the environment from what? It means protect the environment from us. “The environment” is a very sloppy term because it’s not clear whether it means a good environment for us or unimpacted nature apart from us—but it usually means the latter. It means “the environment” is the rest of nature and it’s superior to us, so we shouldn’t impact it.

“Protect the environment from us,” I think it’s the wrong way to think about it. We want to improve our environment. We want to improve it for us, so one way I put it is, I don’t want to save the planet from human beings, I want to improve the planet for human beings.

Another one—this is a little more subtle—is solar and wind “capacity.” Capacity means the ability to do something, and solar and wind are given these capacity numbers, but they don’t have the actual ability to provide it. It leads to all of this stupidity. So the real thing is solar and wind are intermittent fuel savers. That’s really their function in 90-plus percent of cases. They don’t provide you any capacity you can rely on, but they do save you fuel, and the question is, are the fuel savings worth the often very large cost of saving your fuel?

As I mentioned before, the mindset shift I would suggest here is just: be so rigorous. I know as lawyers you’re taught to do this, but I would say to do it even more. You want to be so rigorous about your terminology, because terminology frames so much of conversations, and the bad side, in my view, has just taken over all the terminology.

I call my approach the human flourishing framework—in terms of these four pro-human approaches—and I call the other one the anti-human or the anti-impact framework. Basically you’ll see it in my work, but I can just outline it really quickly here. Once you do this, it’s very, very obvious. The key is the framing of it, both in your thinking and your conversations, and then it’s pretty obvious.

Point number one is just—to decide what to do about fossil fuels and other forms of energy, we must carefully weigh the benefits and side-effects—so that’s framing it. Then just the facts are pretty straightforward. Fossil fuels for the foreseeable future will remain a uniquely cost-effective and scalable source of energy. I think that’s even more clear in the AI era.

The more cost-effective and scalable energy is, the more we can flourish on this naturally deficient and dangerous planet. That’s important, to not worship the unimpacted planet and to not condemn humans. We perfect the planet. The planet is not perfect without us, from our perspective, anyway.

Given that the vast majority of the world is energy poor, the world needs far more energy as quickly as possible. Any negative climate side-effects of our massive fossil fuel use so far have been way offset by what I call our fossil fuel climate mastery.

If you look at the mainstream climate science, it predicts levels of warming and associated impacts that human beings can continue to master and flourish. So there’s no idea of, “We don’t impact climate at all.” It’s just any plausible account of how we’re impacting climate will be fairly easy to deal with and does not at all justify restricting energy. Energy is the best thing—from a climate perspective and any other perspective—and so the proper policy is energy.

I think it’s quite straightforward if you frame it correctly, and this is true for any sub-argument on the sub-issue: you just need to frame it correctly.

So how do you incorporate this framework easily? The hardest—in that it costs you $17 on Amazon and it takes a while, is reading Fossil Future. You can get it on Audible, too. I spent 16 hours reading that thing—I mean, I spent way more than that, but it’s 16 hours to listen to. Reading Fossil Future, that’s the most comprehensive, and for people who’ve really internalized it, it’s a benefit, but it is hard.

The much easier thing is, we have a resource, EnergyTalkingPoints.com, which has thousands and thousands of very usable copy-and-pastable talking points on every issue.

A resource that I created last year is called the Energy Freedom Fund, which is a truly principled lobbying group where I’m the unpaid president, but I raised a bunch of money to basically hire lobbyists who have to do what’s best for energy freedom and have no accountability to any particular company or interest besides the interest of the country.

Then, finally, the one I really want to get you excited about—and I’m hoping at least a third of you take advantage of this because I worked a lot to get this thing available and to make it free—is called AlexAI Gov. For the past few years, I’ve been developing a public AI called AlexEpstein.ai, which you can check out for free—but much more impressive is my own private one called AlexAI Pro, which behind the scenes has allowed me to do a lot of the work that’s been successful.

I created a government version that is in some ways even better than the Pro version. So it’s free—and by the way, it’s available to all government employees, so it’s not a gift, nothing like that. It’s available to all government employees of any kind. If you’re a private entity, it’s not. You can talk to me about other tools that you can get. It’s secure, so we do not store any of the chat history. We delete everything after 72 hours so that we don’t keep any records of you, and it is by far the most powerful thing.

One reason it’s powerful is it systematically incorporates this human flourishing framework. So it’s been taught to think like I do. It has all my knowledge base. It’s just crazy lengths. I basically have a full-time AI team who does this, so you can do anything you can imagine on it. You can draft legal opinions, you can draft model legislation, you can write op-eds, you can create action plans.

Just to give you a quick demo, I’ll just show you a little video. Some of you are familiar with these false “100% renewable” claims, where Apple and others say, “We’re 100% renewable,” even though they’re using a lot of coal and natural gas, because they pay entities to take the blame—to give others the blame for their fossil fuels and give themselves credit for solar and wind.

I just wrote this prompt for AlexAI Gov, “Write a 1500-word investigative action plan for the state Attorney General’s consumer protection division to launch an investigation.”

The AI goes through a very extensive and energy intensive planning process to figure out exactly what the best way to do this is. It’s searching the web, it’s searching everything, but from my perspective, and it has a lot of checks in it to minimize the errors—it doesn’t eliminate the errors.

Again, it’s free to take advantage of, so all you have to do is—main thing is if you’re interested in this stuff, just email me directly and I can send you access to all these resources really easily.

Email me at alex@alexepstein.com (ideally with your .gov email) to request access to AlexAI Gov. We will validate that you are a government official, and give you free access!

Number one thing is that I think the framework is everything. I think that anti-human thinking has affected almost everyone’s framework, but I do think that if you apply the pro-human framework I gave, it’ll be really game-changing for your thinking and for your legal action, allowing you to do a lot more.

In particular, I think AlexAI Gov will get you a lot of the way there, and you can always just email us as well at Energy Freedom Fund, and we’ll help you as well. What I would like to see come out of this is lots and lots and lots of powerful pro-freedom actions by AGs that are made possible by the magic of framework and the magic of AI.

Questions?

Audience Member

One of the issues that we deal with in some states, including legislation, is this idea of attribution that suggests that all the evils in the world that are bad things—including storms and hurricanes and tsunamis—are all the direct result from fossil fuels. I’m curious as to your thoughts on that.

Alex Epstein

Yeah, so these attributions—this is Friederike Otto, and these other kinds of people, who do this—the attribution issue is a perfect example of some of the traps that one can fall into by falling into the other side’s framework. Because the way they’re framing it is that the thing that matters most in the world is climate change. That there’s a lot of devastating climate change, and the only question is, who’s responsible for it? They also have this assumption that the producer of the product gets all the blame and the consumer gets none, which doesn’t make sense, because the consumer is the one who asks for the product.

The whole way of thinking—the temptation is just to go and take Otto or somebody else and be like, “This is nonsense”—to dissect them just from a scientific perspective and say, “Hey, look, our understanding of geophysics is not nearly at the level where you can attribute any given portion of anything to any particular amount of CO2.” At most, what you can do is say, “Well, in general, CO2 has these kinds of impacts around the world and so we might expect this kind of signal,” but even then, most of the signal is in the future.

You can do this kind of analysis for those specifics, and you should, but I think it’s a mistake to let it be framed the way they’re framing it. Because the actual thing that’s happening is the fossil fuel industry—with the voluntary consent of consumers—has created an unprecedented level of prosperity, including climate livability, where the threat to human life from these storms is lower than it has ever been and will continue to get lower by every reasonable climate prediction. Thus, they obviously get a huge amount of attribution for climate safety.

Then, the question is, how big is the side-effect that they have? We know that it’s way less than the benefit, and the question is, how much less? How small is it compared to the benefit? That’s actually the dispute, but it needs to be framed in that context. The climate framing of fossil fuels should always be fossil fuels are making our climate situation way better, and we think about the side-effects in that context.

Also, one thing with energy in general and fossil fuels in particular is—you always need to factor this in—they have a unique ability to cure their own side-effects. This is where you can take antibiotics—and it’s somewhat of an analogy because you need to look at the benefits and side-effects—but if I give my son an antibiotic to cure some infection and it gives him a rash, he still has the rash, which is somewhat of a negative, right? But with energy, you can actually cure it.

If energy causes more drought, energy can also cure drought. If energy causes health problems, energy can also cure health problems, so it’s another thing where—it’s another reason why you can never look—you can never drop the benefit, because the benefit can literally fix the side-effect, which is not true of most things.

We have time for at least one more. That was a really good one. Yes, in the back.

Audience Member

Thank you for all the pro energy advocacy work—particularly engagement with policymakers—I think that’s really important. What’s your perspective on government involvement in energy policy through trying to shape markets through mandates, subsidies, things like that.

Alex Epstein

That’s a softball I assume. Yeah I mean I became most known for helping kill a lot of solar and wind subsidies last year, and I tried to kill everyone’s, I tried to best kill everyone’s subsidies, just to be fair about it, carbon capture, etc. I just wasn’t as successful as I hoped, but I at least killed a lot of the solar and wind ones.

Yeah. I mean, my view is energy freedom. I don’t think the government—I mean, fundamentally, the government needs to do certain things on energy for the national security of the country, but overwhelmingly what it needs to do is just get out of the way and have proper laws—including property rights and proper laws against pollution—and let the best technologies win.

There’s somewhat of—for electricity, it’s a little bit more nuanced. Now, I think ultimately you could have a private electricity system, but we don’t, so insofar as you have a government controlled one, it does need a management role—which it often fails at, by the way, and is manipulated. So you do need things like public utility commissions if you’re giving a government granted monopoly.

But even there, the goal is you want it to function as much as it would if you had a free market, which—just as one editorial comment—the so-called “electricity markets” are totally fake and they do not function at all as a real market would in so many ways. But the most obvious is that in their energy “markets,” they treat intermittent fuel saving from solar and wind as equivalent to the capacity. I know there are capacity markets which don’t compensate sufficiently for this—but you cannot treat an unreliable thing the same as a reliable thing.

I have two kids under two. We look for babysitters. Let me tell you, an unreliable babysitter who costs $20 an hour is totally worthless to me, because then I need the reliable babysitter as well.

And it’s the same thing for energy and electricity. You have all of these huge duplication costs, and you have screwed up so many things by allowing unreliable and reliable to compete and by misclassifying solar and wind as reliable “capacity” when in fact they’re intermittent fuel savings. So in general, totally free market, but when we have the government controlling things with electricity, we need to be really, really wary of phony, fake market things, and that’s a lot—let alone subsidizing, but even the way the markets are structured are a huge subsidy to solar and wind and a huge detriment to the country.

Send me an email, try AlexAI Gov, and I’ll talk to you soon.

Share

Questions about this article? Ask AlexAI, my chatbot for energy and climate answers:

Try AlexAI for free

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

Share Energy Talking Points by Alex Epstein

Subscribe now

The Sorensen amendment expands government-dictated ethanol by exempting E15 from air quality limits that currently restrain the ethanol mandate.

The Fischbach amendment does the same thing AND it also punishes small refiners by making it much harder for small refineries to obtain exemptions from the mandate.

The House Rules Committee should block both amendments for two reasons:

1) Moral: The amendments entrench and expand the destructive and immoral ethanol mandate, which no one seriously supports on its merits.

2) Procedural: The amendments have nothing to do with farming policy and instead change air quality law, so they should be disqualified as “non-germane” per the Committee’s own rules.

For more on why to oppose government-dictated ethanol, read this:

Questions about this article? Ask AlexAI, my chatbot for energy and climate answers:

Try AlexAI for free

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

Subscribe now

Share Energy Talking Points by Alex Epstein

This is what I argue in my first ever speech on AI—which I delivered earlier this month at my annual private energy conference. The full video is above, and a detailed summary is below.

I believe that AI can have the same scale of positive impact on human flourishing as low-cost energy—but only if we properly value it, integrate it, and liberate it.

Properly valuing AI: AI, like low-cost energy, is a new fundamental of human flourishing

What does low-cost energy do, and why is energy a fundamental that is at the root of everything we think of as a good life today? The key is what I call “machine labor.” Low-cost energy—machine calories—enables us to use machine labor to dramatically amplify and expand our physical abilities.

Low-cost energy amplifies and expands our physical abilities

Low-cost, in the end, means that it does not take a great deal of human time to make something happen. Our ultimate cost is our time. If people can have a great deal of energy without spending much time to produce it, then they gain an army of machine servants that can do all sorts of things they could never do before.

Machine labor amplifies our physical abilities. My favorite example is a modern combine harvester. One person using a combine harvester can reap and thresh as much wheat as it once took roughly 1,000 people to handle. That is why only a small share of the population now needs to work in agriculture. Low-cost energy turns ordinary men and women into supermen and superwomen.

Machine labor also expands our physical abilities. It powers machines that can do things no number of humans can do. If a child is born prematurely, no number of people can get together and function as a human incubator. Even a king 500 years ago could not fly across the country, no matter how many people he could assemble. Machines can do things we simply cannot do.

Low-cost energy amplifying and expanding our physical abilities has made the modern human environment unrecognizably better. Procuring food and water now takes a tiny fraction of our time compared with what it required for most of history. We are dramatically safer from climate, predators, and disease. We have running water, easy travel, modern medicine, and instant communication. And we have far more opportunity because so much of our time has been freed up from basic survival.

AI amplifies and expands our mental abilities

If low-cost energy has dramatically amplified and expanded our physical abilities, then AI can dramatically amplify and expand our mental abilities.

Just as the masses once lacked the physical abundance we now take for granted, most people today lack the mental abundance that the wealthiest take for granted. Wealthy people have access to forms of teaching, advising, and assisting that others do not. AI has the potential to make those benefits available to billions.

Teaching: The best teachers do not just know a subject. They know the specific student. They understand that student’s context, starting point, confusions, and gaps in knowledge. That is why great teachers and tutors are so valuable. AI is getting to the point where it can provide a deeply customized explanation about virtually any topic to an individual learner. This is a world-changing improvement in teaching.

Advising: Much of the value of an advisor comes from applying expert knowledge—whether in medicine, law, psychology, etc.—to a specific situation. AI is increasingly able to provide useful, tailored advice, at least as a supplement, at a cost that is vastly lower than what human experts charge. That means billions of people will gain access to forms of guidance that today often cost hundreds or thousands of dollars an hour.

Assisting: In work and in life, people benefit enormously from having more junior helpers who free them up for higher-level tasks. That is true in programming, research, writing, law, and many other fields. AI is already acting as an invaluable assistant for many people—saving their time, increasing their productivity, and allowing them to focus more of their effort on higher-value work.

AI will not only create more mental abundance, it will also compound physical abundance, because physical abundance ultimately depends on mental labor. The internal combustion engine was created by minds. Battery improvements come from minds. Better power systems come from minds. If AI amplifies and expands human mental abilities, it will accelerate improvements throughout the physical world.

The human flourishing potential of AI matters enormously because most of the world is still poor by our standards. Even after adjusting for purchasing power, the average world income is still extremely low relative to what many in the developed world consider normal. The world is not running out of things to do. The world is full of unmet needs. We should be deeply excited about a technology that can create such extraordinary mental and physical abundance.

Just as we cannot think clearly about fossil fuels without recognizing that the modern world depends on them, we cannot think clearly about AI without recognizing the scale of value it can provide. One day people may look back and find it hard to imagine a world without customized geniuses teaching them, advising them, and assisting them. But that will only happen if we first learn to see AI’s value clearly.

Properly integrating AI: AI will reach its potential only if we use it according to its strengths and limitations.

Once we properly value AI, we must learn to properly integrate it into our work. This is one of the key practical challenges with getting the most out of AI right now.

The Industrial Revolution did not work by creating machines that simply replicated human beings. Machines had different strengths and weaknesses, and people had to learn how to use them intelligently. The same is true of AI.

AI has extraordinary capabilities, but it also has real limitations. It can simulate intelligence in powerful ways, but it does not have an independent connection to reality. That means human beings still need to validate many of its outputs.

AI is already changing the nature of work. In many cases, AI can do a great deal of front-end research or drafting, but humans still need to check the results. That changes the division of labor. It does not eliminate the need for judgment. It changes where judgment is most needed.

A common mistake is to overuse AI by treating it exactly like a competent human employee. Another common mistake is to underuse AI because it makes some obvious errors. Both approaches fail to recognize that AI is a powerful force with unique strengths and limitations, and it needs to be integrated accordingly.

Properly liberating AI: AI will fall short of its promise if it is trapped by bad policy.

Once we properly value and integrate AI, we also need to properly liberate it. Freedom is a requirement of progress in every field, and AI is no exception.

Today, AI faces serious political threats, such as opposition to data centers, opposition to industrial development, and restrictions on permitting. If we continue to impose severe industrial restrictions, we will fall far short of AI’s potential. This matters first because life will be far worse than it could have been with AI freedom. And it also matters because technological underperformance can become a security issue in a hostile world.

Like low-cost energy, AI is already under irrational and anti-human cultural and political attack.

Much of today’s popular opposition to AI is reminiscent of the popular opposition to fossil fuels that we’ve heard for decades.

In particular, critics of AI often fail to acknowledge the enormous potential benefits of AI and instead focus only on the negatives. One version of this is the abuse-use fallacy: the idea that because a technology can be abused, it therefore should not be used.

AI can certainly be abused. But that does not change the fact that it can also become one of the greatest tools for informing, teaching, advising, and assisting people in human history.

AI needs to be championed from a confident human flourishing perspective.

It is not enough to defend AI as a necessary evil. The same was and is true of fossil fuels. For years, many defenders of fossil fuels accepted the premise that fossil fuels were dirty, regrettable, or dangerous, while arguing only that society still needed them for now. But fossil fuels are not a necessary evil—they are a profound good that have made human life radically better. The same is true of AI.

AI is not an unfortunate necessity, but a profound potential good. It is a new fundamental technology with the power to make people more capable, more productive, and more knowledgeable.

We are at a crucial point in the development of AI. We have a new fundamental technology, but many people are thinking about it through the wrong philosophical framework. If we think about AI through the right framework—on the standard of human flourishing—we can value it properly, use it properly, and fight for the policies needed to unlock its full potential.

That’s what I’ll be doing, and I hope many of you will join me.

Share

Questions about this article? Ask AlexAI, my chatbot for energy and climate answers:

Try AlexAI for free

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

Subscribe now

Share Energy Talking Points by Alex Epstein

Truth: These politicians saved our grid by incentivizing reliable generation, which was having its operating revenue looted by subsidized, unreliable solar and wind.

Last year, America was already in a serious electricity reliability crisis. The North American Electric Reliability Corporation—the body charged with assessing grid reliability—found that over half the country is facing the risk of power shortfalls over the next decade.1

That crisis is far from over. But now, for the first time in years, the economics of building reliable power plants are turning around. And we owe this to a handful of politicians who led the charge to cut solar and wind subsidies in the “Big Beautiful Bill.”

Solar and wind subsidies were defunding reliable power plants

To understand what these politicians accomplished by cutting solar and wind subsidies, you have to understand the condition of the grid as of last year.

For decades, the federal government paid massive subsidies—the “Investment Tax Credit” and “Production Tax Credit”—to solar and wind projects. These subsidies didn’t just take hundreds of billions of taxpayer dollars. They systematically destroyed the economics of the reliable power plants that keep our grid running.

When subsidized solar and wind flood the grid with cheap electricity every time the sun shines or the wind blows, they take away operating time and therefore revenue from reliable power plants.

Thanks to subsidies many reliable plants had no choice but to shut down prematurely, while investors were deterred from investing in building new reliable plants whose revenue under subsidies and unfair market rules would be taken by unreliable generation.

Subsidies were a big reason why as electricity demand increased over the past decade, America saw a decline in reliable capacity.

The IRA accelerated the catastrophic effects of solar and wind subsidies

Then came the “Inflation Reduction Act” of 2022. The IRA increased solar/wind subsidies, and it also extended them for over a decade. These subsidies were projected to cost taxpayers over $1 trillion over that decade.2

But the damage to the grid would have been incomparably greater than the tax bill. The biggest cost by far was the defunding and disincentivizing of reliable power plants.

By 2024, solar and wind “capacity,” which as we saw during a recent winter storm can’t be relied on at all3, represented 70% of all new electricity additions in the US.

Energy Secretary Chris Wright was not exaggerating when he said solar and wind subsidies are “a big mistake,” which “result in higher costs and less reliable electricity.”4

A handful of energy freedom fighters cut solar/wind subsidies in the “Big Beautiful Bill”

When the “Big Beautiful Bill” budget negotiations began early last year, the solar/wind subsidy lobby descended on Washington in full force. The expected outcome was that Republicans, despite running on a promise to dismantle the IRA, would keep most of the solar and wind subsidies.

That’s not what happened. Instead, a handful of energy freedom advocates fought relentlessly to cut the IRA’s solar and wind subsidies—and won.

The initial draft of the budget bill produced by the House Ways and Means Committee included a long “phase-out” of the subsidies that would have allowed new solar and wind projects to continue receiving 10-year subsidies well into the 2030s and even 2040s.5

When this bill came to the House Budget Committee for review, Representatives Chip Roy, Ralph Norman, Josh Brecheen, and Andrew Clyde withheld their support (voting “no” or “present”). Because the Republican majority on the committee is very slim, their votes were crucial. This stalled the bill, and they were able to work through the weekend to significantly limit subsidy eligibility to projects that were “placed in service,” i.e., operational, by 2028.

Solar and wind lobbyists threw a fit, claiming that cutting subsidies would raise electricity prices and destroy the grid. But Roy, Norman, Brecheen, and Clyde didn’t back down. And in later stages of the process, they were joined by more energy freedom politicians, including Rep. Scott Perry on the House side, and Senators Mike Lee, Rick Scott, and Ron Johnson on the Senate side.

Unfortunately, a last-second change by the Senate (sneaked in by the solar/wind lobby) weakened the House’s solar and wind subsidy cuts by allowing projects to collect subsidies if they are technically “in construction” (an easy threshold to meet) by July 4, 2026, at which point they have 4 years to be “placed in service.”6

Nevertheless, the final “Big Beautiful Bill,” significantly cuts solar and wind subsidies for projects. The upshot: Starting July 5, 2026, virtually no new subsidy-collecting solar/wind projects can be initiated. (They can only collect subsidies if they are actually “placed in service” by the end of 2027, a standard most new subsidy-seeking projects won’t be able to meet.)

Politicians who cut subsidies are wrongly being blamed for rising electricity prices

As soon as the “Big Beautiful Bill” was passed, the solar-and-wind lobby began blaming the politicians who cut solar/wind subsidies for depriving our grid of power and causing electricity prices to rise.

Not only is the timeframe of this claim absurd—the subsidy cuts would not even go into effect for another year—it gets the relationship between subsidies and price increases exactly backwards.

Solar and wind subsidies have contributed to the electricity price increases we’ve seen so far—by forcing the premature shutdown of the reliable power plants our grid needs to function. (And we’re also paying for the subsidies through taxes and inflation.) Cutting these subsidies was necessary to stop price increases going forward.

The energy freedom fighters who cut solar/wind subsidies did not deprive the grid of power; they did more than anyone to ensure that the grid had electricity when it needed it most. They set up a market where new reliable plants can be profitable. And they did not increase electricity prices, they created the necessary conditions for electricity prices to decrease.

In fact, that’s exactly what we’re seeing already.

The solar/wind subsidy cuts in the “Big Beautiful Bill” are already saving our grid

After the passage of the Big Beautiful Bill, investors looked at the electricity market and saw that building reliable power would soon become much more profitable than if the solar/wind subsidies had continued. At the same time, they became more and more aware that they need ultra-reliable power to power AI data centers.

The US nearly tripled its gas-fired capacity in development in 2025, reaching 252 GW—more than any other country7. Developers plan to add 18.7 GW of combined-cycle natural gas capacity by 20288. Major utilities are announcing record capital plans to build reliable generation.

This is what happens when you stop paying people to build an inferior product. Capital flows to what actually works: power plants that can run when you need them, in the quantity you need them, regardless of the weather.

The AI data center boom makes the timing of the solar/wind subsidy cuts even more crucial. Data centers need power that is available 24/7, 365 days a year. The subsidy cuts arrived just in time to help redirect investment toward the reliable generation that America’s growing digital economy urgently needs.

The lesson: Energy freedom works

Any energy source that is genuinely cost-effective will thrive without subsidies. The path to affordable, reliable electricity isn’t subsidies for some politicians’ and lobbyists’ preferred energy sources—it’s the freedom to produce and invest in the energy sources that actually work.

A year ago, NERC was warning that more than half the country faced electricity shortfalls. Today, the market is responding to restored price signals by building reliable power at a pace we haven’t seen in decades.

The politicians who cut solar and wind subsidies didn’t just save taxpayers hundreds of billions of dollars. They saved our grid.

Share

Questions about this article? Ask AlexAI, my chatbot for energy and climate answers:

Try AlexAI for free

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

Subscribe now

Share Energy Talking Points by Alex Epstein

At a high level, my message was: There is absolutely no substitute for re-opening the Strait of Hormuz, whether through victory or a well-protected convoy. But there are other forms of unlocking access to oil that can make a significant difference.

I also cautioned against proposals I think are terrible, such as banning oil exports, manipulating oil futures, and treating Venezuela as a near-term solution.

John Coogan:

What’s going on? How should we even be thinking about oil prices right now, the impact of the war in Iran? How should we be processing this news?

Alex Epstein:

Okay. So there’s a million things to comment on, so I’m going to try to segment what I comment on, but we did get involved militarily in Iran, which I would just say, in my non-area of expertise, in general that is a good idea. I think it’s a better idea to have Congress involved if you can get them involved. And I think it’s a good idea to have a lot of expertise on international oil markets being brought to bear when you do this.

And I think this administration does a lot of good stuff on energy, but I think it’s pretty clear at this point that there was not maximum expertise brought in on this. And so the standard issue when you’re talking—

Jordi Hays:

And indicators there would be like the Strategic Petroleum Reserve hadn’t been refilled—?

Alex Epstein:

I mean, we can talk about that. So let’s make sure to get back to that one. But the main thing is just, rough numbers, Strait of Hormuz, which Iran has control over, is 20% of the world’s oil production is flowing through that every day. And so whether you’re looking backward or looking forward, there is no replacement whatsoever for opening that Strait and keeping it open.

And one of the things we’ve heard from different people is, “Oh, we have a lot of options on the table. There’s a lot of things that we can do.” There are definite things that you can do, but none of them is 20 million. So I mean, that’s more than US oil production, just flowing through that one place.

So we can talk about the other things, but I think the first thing people need to recognize is if you do not get that thing open, then you have dramatically higher oil prices. And then the other thing to get is: oil prices really matter.

John Coogan:

Strait of Hormuz, dumb question, can’t you just go around?

Alex Epstein:

I mean, you can try to some extent, but there’s a reason why 20 million a day are being routed through here.

John Coogan:

Because it actually comes out of there as well, right?

Alex Epstein:

Yeah, I mean, all of these things are very, very optimized. One of the things about just understanding the energy industry is things are just very optimized in terms of where the infrastructure is. You’re doing all of these things. So there are other, and we’ll talk about this, I mean, there are certain pipelines you can pipe more oil through. There are alternate routes, but we’re talking about in the millions a day maybe. Most of our other options are sort of in the one to two million barrels a day.

John Coogan:

Sure.

Alex Epstein:

And just so people know a barrel is 42 gallons, so you’re talking about almost a hundred million gallons a day for the stuff. So you don’t have a lot of great options. And I think that’s very important for— I’m going to give some options, but the number one option is keep that thing open. And there are basically two ways to do that.

One is you just win the war, if you want to call it that, a lot more quickly.

John Coogan:

Sure.

Alex Epstein:

If you get some form of surrender and you have friendly people controlling it, then guess what? It can open. That’s one thing. And so I’m not an expert on how to do that, but schematically doing that is very effective. The other thing, which is a little bit—

Jordi Hays:

But game theory for Iran is they actually benefit from global markets being in turmoil because it gives them some leverage over any type of negotiation.

Alex Epstein:

I mean, this is the biggest damage that they can do. I mean, clearly we’ve seen they’re not going to send missiles to Israel and get rid of Israel, let alone do anything to the US, but they have this incredible control of one of the centers of the world economy, and they have a bunch of stuff going on there. So let’s talk about that.

So option one is you get a surrender, and they don’t use all of their options, but then let’s talk about their options. So they have mines in this thing, so they can blow up mines. They have missiles. Maybe the worst thing they have, and this is a change in recent years, and you’ve had Palmer on here and Ethan on here. The drone thing is just a total game changer because you can have a small vehicle, you can launch one of these Shaheds out of the back of a truck, they can go really far, and that’s a lot harder to deal with than a fixed installation.

Jordi Hays:

They have something like 500 miles of range on a typical—?

Alex Epstein:

Yeah, depending on, yeah, right, so—

John Coogan:

The truck drives up to a beach, drone launches, as soon as it finds that cargo tanker that has a bunch of oil on it, it hits it.

Alex Epstein:

Yeah. And then you’re worried about that—

John Coogan:

So you’re not even going to go.

Alex Epstein:

—as you’re going through. So you have to think about, those are the kinds of threats you face. So how do you deal with that? I mean, basically, you need the US to lead some sort of convoy where people have sufficient security and economic assurances that it’ll go through. So what’s involved in that?

Well, one thing is, if possible, you want to get allies involved. And it’s even possible you get unconventional allies like China, who has—well, they depend on this. Unlike us—you want to go back to SPR—they’ve been filling up their reserves.

So they have more reserves relative to their imports than we do relative to ours. If you think about ours, we have about 400 in the SPR, and we can release about four million a day. So we don’t have as much— But still, they really care about this, and a protracted thing is bad. But for sure, Japan, South Korea, India.

So one thing is just at a high level, if you’re doing this convoy, can we get these countries that are aligned economically—maybe China, but definitely these others—can we get them involved? Because then they have military presence there. That’s an additional threat to Iran if they attack one of their ships. But that’s a macro thing, is just, can you do this alone or can you do it with allies? I think ideally you would do it with allies.

Then there’s a question of what you do about these various things. I mean, the other macro thing you can do is just in some way credibly threaten Iran and say—and I can’t give the details of how to do it—but, “If you attack in the Strait of Hormuz, it’s going to be very, very bad for you.” So just at a high level, can you make that threat so they understand this is going to be very, very. Now, we’ve wiped out a couple layers of leadership, so they might be taking these things seriously.

After that, I think the biggest thing from what I’ve heard from military experts is just these drones. What do you do about these drones? How do you give any kinds of assurances?

And as far as I can tell, we don’t have any one perfect solution, but you can do a certain amount of stuff from the air. You can do a certain amount of stuff from the ground, although it’s very, very expensive. And then most cost-effective where you can do it is you can take out certain stockpiles and facilities with the proviso that these things are decentralized. And of course, I have no specific knowledge about where they are.

John Coogan:

But in theory, if there’s the suicide drone, the Shahed, there’s a factory, and you take out that factory, you have reduced that capacity.

Alex Epstein:

So that’s going to be it. And I know you guys had on Ethan Thornton, who I’m friends with. And he talks about this a lot, is just this cost asymmetry issue, is you just want to be doing things, even if you’re way wealthier, you do not want to be spending $3 million to take out $30,000.

John Coogan:

Which might be what’s happening with the Patriot missile batteries, corrrect?

Alex Epstein:

Yeah. That’s the kind of thing that happened, so you need a combination of those kinds of things. Then, the other thing, so that’s all the security stuff, so you get the allies involved, you take these actions specifically against drones. What was I going to say about, the other thing you can do? I’m just making sure—

Jordi Hays:

Well, the other big factor is the loss—

Alex Epstein:

Oh, the insurance.

Jordi Hays:

Okay. Insurance.

Alex Epstein:

Yeah, the insurance. This has been floated by the president, and it’s a reasonable idea, but my understanding is the insurance vehicle we have, the Development Corporation, does not have enough funding, so you might need to go to Congress.

But basically, you want to be able to say, “Hey. We’re going to lead this as the United States. We’re going to lead it with allies. If Iran does anything, it’s big trouble for them, and we can counter their specific attacks, and if something goes wrong, you’re insured.”

You’re trying to create that confidence to get enough people going through, and then you get a certain amount of stability, and then you start to get closer to your 20 million barrels a day. Either that, or you just defeat them really quickly—or both.

Jordi Hays:

So, the other factor is just the loss of production, disruption to production, plants shutting down, plants being damaged. How does that factor in? Do refineries get brought back? I’m talking about an allied country.

Alex Epstein:

You mean just the trend over time or what?

Jordi Hays:

Yeah. Generally, I mean, just seeing the videos coming out. You’ve seen places I think like Qatar, Kuwait, places basically just saying, “Yeah. We’re going to pause production, because we don’t even have a place to store this,” and/or they’re suffering damages, and it doesn’t make sense to keep refineries online.

Alex Epstein:

But this is all just downstream of, do you have the route open?

Jordi Hays:

Yeah.

John Coogan:

Got it.

Alex Epstein:

If you have the route open—

John Coogan:

Then, you’re good.

Alex Epstein:

—it solves everything.

John Coogan:

Okay, okay.

Alex Epstein:

The way to think of the other things, because we do have some other interesting options, we have to think of them as, “These are temporary stop gaps.” I mean, you hear some crazy things. People are like, “Oh, Venezuela.” We talked about this last time.

John Coogan:

I was just going to ask you.

Alex Epstein:

Venezuela is less than a million. I mean, it’s beyond crazy. It’s just impossible. It’s not like Venezuela has the ability to just increase the oil production by any significant amount in the near future.

John Coogan:

Sure.

Alex Epstein:

I mean, we’re talking about companies considering going in harm’s way to get some incremental boosts, so Venezuela is essentially useless right now.

John Coogan:

So, best case scenario in the next year, Venezuela goes from under a million to two million?

Alex Epstein:

No.

John Coogan:

Not even that?

Alex Epstein:

I mean, two million would be—

John Coogan:

Insane.

Alex Epstein:

I mean, if we made it our entire goal in life, I don’t know, but why would you for that?

John Coogan:

Venezuela was at three million a decade ago or something.

Alex Epstein:

Yeah, some years ago.

John Coogan:

Right, but there’s a lot there. It’s not going to happen.

Alex Epstein:

Yeah, so Venezuela, I would not even. That’s just in the category of, it’s not even a bad idea. It’s just not an idea.

John Coogan:

Sure.

Alex Epstein:

There’s nothing there.

John Coogan:

No, no. That’s fair.

Alex Epstein:

So, the bad ideas, by the way, the worst idea imaginable is ban oil exports from the United States, which I have heard floated in conversations.

John Coogan:

Okay. Seems somewhat reasonable. I want the oil. Yeah, explain.

Alex Epstein:

I mean, so many different things, but one obvious one—not obvious one, but it’s obvious if you know how these things work—is the refiners in the US do not match up well to the oil produced in the United States. The refineries in the United States are based on heavier crude.

Crude is rated in terms of weight and sourness, and so our refineries are mostly for heavier crude. It’s actually one reason why Venezuela has some appeal. Canada has a lot of appeal, because they—

John Coogan:

Because they have heavier crude.

Alex Epstein:

Yeah, and we’re going to talk about Canada.

John Coogan:

And we’re good at refining it.

Alex Epstein:

We’re going to refine it.

John Coogan:

But we produce a lighter crude here.

Alex Epstein:

Yes, because the shale revolution was just this dramatic shift very quickly in oil production, so our refineries are not primarily equipped. That’s why when we ended the crude export oil ban, I forget if it was 2014 or something like that, it was just this huge unlock, because it allows us to produce for a global market.

John Coogan:

So, you can’t look at American oil production as a monolith.

Alex Epstein:

Yeah, it’s not fungible.

John Coogan:

We import heavy crude and export light crude. Is that roughly correct?

Alex Epstein:

Yeah, that’s roughly correct. Yeah, so that’s one thing is it’s just insane to do that, but in general, think about it. What is the value of higher prices? It stimulates production. We’re going to talk about all these different ways where we want to unlock oil, so you want to tell American oil producers, “Hey. We’re going to actually totally screw you over. It’s actually going to be worse for you, maybe than it was before, because you don’t even have a market, so you’re going to strand all this oil.”

So, that’s terrible. There’s also this financial manipulation idea which has been floated, which I think is terrible of, “Hey, let’s manipulate the financial markets, basically, in a way that you’re selling future short on a certain time period, and then you’re buying them. What you’re trying to do is lower the near term price—

John Coogan:

Oh, like Fed policy, basically.

Alex Epstein:

—and raise the long term, or Treasury. Yeah.

Jordi Hays:

It’s a very American way to try to solve a real-world problem.

John Coogan:

A lot of people that like that.

Alex Epstein:

The only solutions involve unlocking oil in one way or another. You do not want to screw up the markets so that people are less inclined to unlock oil, nor do you want to screw up the markets to destroy information.

So again, the main unlock is reopen that Strait. There’s no way around that. But then we can talk about other things.

John Coogan:

Yes.

Alex Epstein:

So, one category is what you call spare or emergency capacity, and there’s some uncertainty here, but it—

John Coogan:

Quickly, this is separate from the Strategic Reserve?

Alex Epstein:

Yeah. Well, emergency capacity is the Strategic Reserve.

John Coogan:

Oh, it is. Okay.

Alex Epstein:

So, spare means you could pretty easily be producing more per day, but you’re not, because you’re not happy with the price, and this is, mainly Saudi Arabia is considered Exhibit A in terms of amount of this. Now, there’s debate among experts about how much they have, but some people estimate they have one, two, three million barrels a day of spare capacity. They could ramp up on some kind of—

John Coogan:

And do they know how much capacity they have and they’re just not sharing it, or does no one know?

Jordi Hays:

I mean, that’s always been the story that’s been the story of the Gulf, right? If they just flooded the market with every single barrel that they could possibly produce, they would be getting a much worse price.

Alex Epstein:

Yeah, and there’s this cartel arrangement that does, I mean, in a sense everyone has this on different timescales. You think about US shale producers.

John Coogan:

Sure.

Alex Epstein:

If prices were sustained at $100, guess what? There’s a whole bunch of shale deposits that they could produce at $75 a barrel and make a fortune on, that they’re not going to do four weeks ago when it was around $60 a barrel.

But in terms of, the thing about the Saudi oil is it’s produced at a much lower cost, so this is them saying, “Hey. We have some of this on the table.” Then, the question is, you need to be able to produce it and then you need to be able to transport it, so you have estimates around maybe you could get one to two million barrels a day, so that’s one of them.

In terms of emergency— if you look around the world, you don’t have a lot of immediate spare capacity besides that, so we have what’s called emergency capacity or Strategic Petroleum Reserve. Jordi mentioned that we didn’t fill up our Strategic Petroleum Reserve. I think this is unequivocally a mistake. I mean, if you look at it, the whole thing of the Strategic Petroleum Reserve is you want it for when you need it, and the best possible time to fill it up is when prices are low.

John Coogan:

And is that physically a place with a bunch of barrels that we store?

Alex Epstein:

There’s a bunch of different parts of it.

John Coogan:

Is it like the Fort Knox of oil?

Alex Epstein:

Well, there’s multiple different places, but you can think of it roughly that way.

John Coogan:

We, basically, hash the physical oil in America or somewhere where we own it or can access it.

Alex Epstein:

Yeah, yeah, yeah. It’s physical. Yes, exactly.

John Coogan:

And it’s sitting there, going unused until we’re ready.

Alex Epstein:

Yeah.

John Coogan:

Got it.

Alex Epstein:

Now there’s issues of, Biden definitely misused it. So they used it to basically have lower gasoline prices during midterm elections, even though, parenthetically, their entire policy goal was get rid of fossil fuels, which means you want the price to go up so people can’t afford it. It’s a very cynical kind of move.

John Coogan:

Got it.

Alex Epstein:

They did it in a way that degraded the facilities.

John Coogan:

Interesting.

Alex Epstein:

So, let’s say we’re at about four million barrels a day. We can get out of that thing. We have 400 million in there. We should have over 700 million. We could have easily filled it up. I mean, it was a perfect time when you’re talking about $50 barrel of oil, $60 a barrel oil.

John Coogan:

Yeah, and can I do the basic arithmetic of four million a day, 400 million in the reserve, 100 days of oil?

Alex Epstein:

Yeah.

John Coogan:

But that’s not actually, if we’re talking about relieving price pressure, you could trickle it out over a year and have 1/4 of the effect or something?

Alex Epstein:

But just think about 100 million barrels a day is roughly the global market.

John Coogan:

Okay. Okay.

Alex Epstein:

So four million is just, that’s its maximum—

John Coogan:

Throughput.

Alex Epstein:

—capacity.

John Coogan:

Got it. Okay.

Alex Epstein:

It’s kind of an analogy to batteries.

John Coogan:

Sure.

Alex Epstein:

If we’re talking about batteries. So there’s a certain amount, like with a battery, if you hear there’s a one gigawatt battery installation, it usually means there’s one gigawatt for four hours. But if you wanted to do half a gigawatt, then you could do eight hours. It’s the same deal with this.

But keep in mind, this is not a hundred days of US oil demand. And by the way, for the refinery reasons, we can’t just supply it all with our SPR. It’s just the maximum output is— but four million barrels a day is something, we’re talking about, that’s 1/5 of what’s flowing through the Strait of Hormuz. Yeah, it’s a thing.

John Coogan:

Not enough.

Alex Epstein:

But, yeah, you can think of, yeah, maybe we’d be willing to do one to two million barrels a day from ours. Now, interestingly, the International Energy Agency—we are part of the International Energy Agency Reserve program. So we have about 400 million, but they have about 1.4 billion. So we have allies around the world that can also release this oil. So maybe we could get one to two million from them.

Now, at least last I checked the news, they hadn’t agreed to do this because they don’t think it’s an emergency, but that’s what it’s there for. So notice the pattern is we’re—

Jordi Hays:

At what point would they think it’s an emergency?

Alex Epstein:

I don’t know. I mean, and we can put pressure on them. I think some of these determinations have to be made in conjunction with the military determinations. You can’t make them in isolation because if you think about what’s the military objective? How close are we to that? Or how close are we at least to opening this up via high security and financially backed convoys? Then you can think about the timetable here. If you think about, well, the Strait of Hormuz is going to be closed for five years, let’s just get used to being poor.

John Coogan:

Black bill.

Alex Epstein:

No, I mean, people don’t get oil. There’s a reason why I focus a lot of my life on oil. There’s no material in the world of energy that is more valuable than oil because oil is just so unique in terms of it has this very high energy density and portability. And there’s nothing like it. I mean, nuclear has higher—

John Coogan:

What about plutonium?

Alex Epstein:

Yeah. Yeah. It doesn’t have the same portability.

John Coogan:

Five years? We’re going to be rich. We’re going to have energy too cheap to meter in five years.

Alex Epstein:

Yeah, that’s—

John Coogan:

I’ve talked to a lot of nuclear founders.

Alex Epstein:

Well, look, I love nuclear as much as anyway. They don’t even have a portability solution though for the near future, unless you’re talking about an aircraft carrier or an icebreaker or something like that. So I’m just saying the world runs on mobility and oil is ideal for mobility. So are you going to—

John Coogan:

Oh, portability in the sense of using nuclear to actually power trade and commerce and moving ships around.

Alex Epstein:

Yeah, yeah. I mean—

John Coogan:

Even if you can power the grid, you will be poor because you will not be able to trade. Is that what you’re—

Alex Epstein:

Yeah. Trade is really important.

John Coogan:

Trade is really important.

Alex Epstein:

And, well, and also it’s within the country too. We don’t have the nuclear trucks to move things around.

John Coogan:

Sure, sure, sure.

Alex Epstein:

So, obviously, you want super cheap electricity and you want super cheap transport fuel. And we want to see if we can electrify some of this stuff, if you can do it cost-effectively. It’s just—

John Coogan:

Yeah. There’s some people working on electric bulldozers, for example. It’s very hard and I don’t know the timeline but—

Alex Epstein:

And by the way, guess what? You need a lot of oil to even get that whole supply chain started because you need the mine— So anyway, bottom line, yes, I meant that thing about we can all be poor very seriously. Very seriously.

So we have, if you look at the spare capacity, I think that’s all of them. So we have the rest of the IEA, we have ours, and then to my knowledge, we have Saudi/UAE, them using spare capacity and then piping it where they can. So maybe combined, we’re talking about six million a day if you use all of those. I mean, somebody could imagine 10 million a day.

And all of these have time— particularly the emergency reserve things, these all, at least the Saudi one is you have a big deposit. Here, it’s just you have a small reserve, so you can’t do this forever. And of course there’s a risk of if you deplete the SPR more, what if you really, really—

John Coogan:

Need it.

Alex Epstein:

—need it in the future?

And then there’s a bunch of near-term stuff that you can do, and some of which I like just because it could be done anyway. So number one, to piss a whole bunch of people off is let’s stop using this Jones Act. Do you know what this Jones Act thing is?

Jordi Hays:

Yeah.

John Coogan:

I’ve heard of it, but explain.

Alex Epstein:

So the Jones Act is a set of restrictions that say that you can only transport things among ports in the United States if you have everything is basically American. So it’s owned by an American, it’s run, I don’t know all the—

Jordi Hays:

Yeah, it’s basically American ship, American crew.

John Coogan:

Yes. Yes.

Alex Epstein:

Yes. So it leads to all these crazy, crazy things. Like, we end up importing things from, instead of importing it from one part of the country to another, you end up importing it from some really far away place. It leads to that kind of thing.

But in this case, in particular, as Californians, we should all recognize this. We don’t have oil being piped into California so we want very efficient maritime transportation. And if you suspend the Jones Act, then you can get more efficient transportation, which means we can at least have lower prices here and we can have less of a price shock.

But in general, I want people to get used to having no Jones Act because I want there to be no Jones Act. So that’s a good thing to do. My favorite idea here is—

Jordi Hays:

And I imagine there’s a bunch of powerful lobbies that will fight and kill-

Alex Epstein:

Correct.

Jordi Hays:

—for the Jones Act because there’s—

Alex Epstein:

Correct.

Jordi Hays:

—an entire industry built around—

Alex Epstein:

Yeah.

Jordi Hays:

They don’t have to be as dependent, right?

Alex Epstein:

The idea that we can only have a good ship building industry. I don’t know what people think is happening with our shipbuilding industry. Our ship building industry is not going as well as other people’s.

Jordi Hays:

Yeah, well. It didn’t exactly work.

Alex Epstein:

Yeah. I mean, it worked to protect certain people’s—

Jordi Hays:

I’m just saying if you look at American shipbuilding, it certainly hasn’t allowed us to be competitive on a global stage.

John Coogan:

The shipbuilders would say we’re early, but I take your point.

Jordi Hays:

Early, but you’ve seen— but I’m just saying, how many decades of declines do you need?

Alex Epstein:

Yeah okay well, I think—

Jordi Hays:

John’s like, “We’re still early.”

Alex Epstein:

We’re early.

John Coogan:

It’s like a smiling curve, like churn. It goes down and then goes back up. That’s the bull case.

Alex Epstein:

All right. It’s definitely not going to help us near-term.

John Coogan:

Definitely not though. I’ll agree with that.

Alex Epstein:

Here’s the most interesting thing, which is a pet issue of mine because we’re— This administration, I should say, does a lot of good stuff on energy. I say that I’m in a fortunate position where a lot of people ask for advice and stuff like that. And I feel like one of my jobs is to tell people things they’re not doing.

A lot of things they’ll just do right on their own, but Canada is not one of those things right now. We are just absolutely sleeping on Canada as an opportunity. So Canada has no people and infinite resources and is really friendly.

John Coogan:

Yeah.

Alex Epstein:

They have these oil sands, you know what these things are?

John Coogan:

Yeah. No, explain.

Alex Epstein:

So they’re just like these deposits of oil. It’s like nature basically committed an oil spill, is the way to think of it. So it has all these oil sands. For years they were not very useful.

John Coogan:

They weren’t viable because it’s not just you drill down and black gold comes up. It’s like buried in the sands and need to be refined, right?

Alex Epstein:

There are different kinds of things. So you can mine it out directly or you can do what’s called in situ, which is you heat it up underground.

John Coogan:

Oh, and it liquefies.

Alex Epstein:

In any case, they have just this unbelievable oil seep. They have way more oil deposits than we do, way more oil reserves, but they have on the order of 1/3 of the production, and in part because they have absolutely terrible policies, which are their fault. But in part, we have had terrible policies, including getting rid of the Keystone XL Pipeline and this kind of thing.

But if you just think of Canada, it’s just we should be so— They have water. I mean, again, no people, 1/10 of the population, infinite raw materials. They got everything. They got timber, they got natural gas, they got oil. And we’re talking about Venezuela? I mean they’re a friendly country, right? They got smart people there. They haven’t been driven out of the country because they’re afraid of getting killed by Chavez or Maduro or whatever.

So this is an opportunity to say, hey Canada, let’s have a task force. You guys are at a low in terms of, we don’t have pipelines, but we can do rail. At least we can do rail, maybe trucks, but at least rail. Rail transports from Canada are really low right now. So let’s have an initiative where maybe you bring a couple hundred thousand, depending on your expectations, maybe we can add a couple hundred thousand barrels a day.

So that’s one that excites me because I want to be— The US-Canada superpower thing is this huge opportunity that we’re sleeping on because of the idea of, oh, we should only be doing it in “America.” But this is just by the way, unbelievable. I think they have the best uranium in the world.

John Coogan:

Maple syrup’s out there.

Alex Epstein:

I don’t have a Canadian personality, but I love that place.

John Coogan:

No, strategic. It makes a ton of sense.

Alex Epstein:

Strategically, and they’re very friendly.

John Coogan:

Yes.

Alex Epstein:

They’re very friendly.

John Coogan:

Maybe we should be friendlier.

Alex Epstein:

Yes. No, we should. And we have trade agreements coming up so there’s that. The other thing is we can increase capacity here, as I mentioned, depending on prices going up. So there’s that, but that might be a couple hundred thousand barrels a day.

So high level, open the Strait of Hormuz, that’s the only thing that really works. Then you can talk about Saudi’s spare capacity, our emergency capacity and IEA emergency capacity. And then below that, you have Canada, Jones Act, and US production.

John Coogan:

That’s a really, really thorough list. Thank you. I appreciate that. Anything else, Jordi?

Jordi Hays:

What are you going to be paying attention to most closely?

John Coogan:

Do you watch the price chart, is that important to you?

Alex Epstein:

Well, it’s important. I mean, it’s weird. I run a network of energy executives, but I’m focused on the policy side of things. So I’m often laughably out of touch. I mean, I know in general within $10 usually what it is, but as a policy, I don’t invest in energy.

John Coogan:

Because you’re looking at longer term, five years, ten years.

Alex Epstein:

But also I’m deliberately avoiding exposure to the commercial part of it.

John Coogan:

Of course, of course. You want to be independent.

Alex Epstein:

Yeah, I want to be independent.

John Coogan:

That makes sense.

Alex Epstein:

Yeah. But at the moment, yes, I am looking at the prices. But I don’t do predictions, but I’m just saying, I think there’s a service right now in just laying out the options for people because even in the government, I mean, not everyone has a lot of expertise in oil.

And this is the kind of thing where, yeah, it’s kind of why I think you texted me this morning. I mean, sometimes you need to know about oil today and sometimes you don’t. But when you need to know, you need to know.

John Coogan:

You know me.

Alex Epstein:

You really need to know.

John Coogan:

Yeah. Well, it seems like whether you’re in the business community or just humanitarian, everyone should be rooting for a swift and peaceful resolution.

Jordi Hays:

Yeah. Do you have any insight, this might be totally out of your wheelhouse, but insight into how people running businesses that are most impacted by fluctuations in oil prices, have they been actively hedging over the last couple of weeks? Are they doing— How do you run your business when your input costs can go up dramatically, potentially at a much higher rate than you can adjust your own prices?

Alex Epstein:

I mean, just in general, these guys are sophisticated. I think within the bounds of doing it, I don’t think you can hedge indefinitely for this big a price kind of differential, like somebody’s going to say— I mean, but it’s also, you think about there’s on the consumer side, but on the production side is even more dramatic if you just look at the margins of these guys.

I mean, the oil industry is just fascinating. I mean, I just remember anecdotally when I came up with my first major book, The Moral Case for Fossil Fuels, in 2014, even I could see speaking engagements correlated to these prices because you had a big price crash around them. And then you think, wow.

Jordi Hays:

Yeah, we don’t need Alex.

Alex Epstein:

Yeah. It might be nice to keep the troops motivated, but I’d probably rather be employed. But it’s a hard business. And one of these things is the people who survive have a very strong constitution and they can manage the risk very, very well. I was talking with a bunch of these guys, actually some people we know in common, and some of the better ones, some of the two of the young superstars in the industry, they’re just saying like, “We love the chaos because we can just, we can handle it when the prices go down.”

John Coogan:

Sure.

Alex Epstein:

Because you think about what they’ve been dealing with over the last year, they’ve increased production, prices have gone down and you look at, this administration is very focused, I would say too much focused, on having prices go low.

And this is one of the variables here is, although the administration I don’t think was not fully prepared for this situation, in general, they are maniacal about prices going low. Trump, in his mind, has a very strong focus on $50 a barrel, which I think he feels like that’s always the perfect price for oil.

John Coogan:

Sure.

Alex Epstein:

And the people in the oil industry say, “Wait a second, we’ve had inflation of everything else. Why does our one product have to stay at $50?” And that’s part of the appeal of Venezuela, rightly or wrongly, because it’s not going to make a big difference soon, but it’s like, how do we keep oil prices low?

But that’s hard to be in that industry as a consumer—as a producer, rather—and it’s hard as a consumer. So they have financial instruments. But the main thing is you need to just have the flexibility in your business model. And oil is, again, it’s the most valuable material in the world of energy, which is why everyone uses it, but is also why it’s so inelastic and you have these price fluctuations.

So you just need to come to terms with that or somebody needs to figure out something better, but it’s really hard. And of course, policy-wise, we can have better policy to make it more stable, but it’s still that thing where it’s so valuable that guess what? You get a little extra demand or a little less supply, price goes up a lot. It’s different than other things which you can substitute for much more rapidly.

John Coogan:

You’re out of a job when we build the Dyson Sphere.

Alex Epstein:

Oh man, I’m working on this AI thought leader thing we talked about last time. So I got plenty to do.

John Coogan:

We’ll cross that bridge when we come to it.

Alex Epstein:

I’ve got plenty to do with my time.

Jordi Hays:

Thank you. As long as we need energy, you’ll be doing just fine.

Alex Epstein:

All right, guys. Good to see you.

John Coogan:

Thank you so much for coming on the show.

Share

Questions about this article? Ask AlexAI, my chatbot for energy and climate answers:

Try AlexAI for free

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

Share Energy Talking Points by Alex Epstein

Share Energy Talking Points by Alex Epstein

On the poverty rate in China vs the US:

It’s hard to imagine a more dishonest graph than this one by The Guardian claiming China is bringing people out of poverty while the US is not.

The US poverty rate has been so low for >30 years that it wouldn’t even show up on the China graph if it had been plotted to scale!

Share this on X

On how industrial progress made humans taller:

If you know anyone who likes to romanticize the past before the Industrial Revolution, show them this chart.

Today, if a man is under 5’6, he’s considered unusually short. But that would have been unusually tall for practically all of European history until the twentieth century. Germans have gained over half a foot on average since the generation born in the 1850s!

What made this possible?

Freedom, which liberated the power of the reasoning human mind to invent better nutrition, cleaner water, and modern medicine that allowed man to grow—literally.

Share this on X

On lack of pipeline capacity in the Northeast:

The Northeast built almost no new natural gas pipeline capacity last year because anti-fossil-fuel policies make pipelines so difficult to permit.

Pennsylvania has abundant natural gas that could lower the Northeast’s high regional energy prices—but not if there aren’t enough pipelines to transport gas to demand centers!

We need to unleash pipeline construction in America.

Share this on X

On the Supreme Court’s new climate lawfare case:

I hope the Supreme Court will make the right call and throw out this bogus Colorado lawsuit seeking “climate damages” from Suncor and Exxon Mobil.

The idea that oil companies owe us for “climate damages” caused by the negative side-effects of fossil fuels is totally absurd.

The oil products of companies like Suncor and Exxon Mobil make us far safer than ever from climate, not more endangered! And in any case we have all chosen to use those products, and to make them legal in the first place.

Share this on X

On anti-fossil-fuel policies in California:

The government of California has waged war on our in-state fossil fuel supply for decades.

Now we rely on 1) limited and expensive in-state fossil fuels, and 2) expensive fossil fuel imports from out of state.

Is it any wonder why we have among the highest gas prices in the US?

Share this on X

On UK sabotaging its energy security:

The UK, which has spent the last two decades sabotaging domestic natural gas production, imports a significant portion of its natural gas.

Now, the war in Iran is disrupting gas imports and driving prices way up.

The lesson: National security requires energy security, and energy security requires energy freedom!

Share this on X

On New York’s abuse of the Clean Water Act:

New York is once again abusing the Clean Water Act to impede the construction of the Constitution Pipeline, which would be a huge help in reducing electricity prices in the Northeast.

Congress should take away state veto power over water-related projects by passing the PERMIT Act, which has passed the House and is being considered by the Senate.

Share this on X

On LNG exports lowering energy prices:

LNG (liquefied natural gas) exports don’t raise our energy prices.

Exporting natural gas supports a profitable and growing US natural gas industry, which leads to lower energy prices long-term!

Share this on X

Questions about this article? Ask AlexAI, my chatbot for energy and climate answers:

Try AlexAI for free

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

Subscribe now

Share Energy Talking Points by Alex Epstein

Recently I’ve been seeking out more non-partisan or Democrat forums to share my views. Here’s a recording and transcript of my recent appearance on “The Extremely Non-Extreme Podcast,” in which I gave an overview of my vision for energy policy. I covered:

• Why energy policy reform needs to be tech-neutral, comprehensive, and Congressional

• Why energy affordability and accessibility, not “energy independence,” is the right goal

• How preferences for intermittent energy have created today’s electricity problems

• Why I think any designation of an “energy emergency” should be more delimited

• Why the raw economics of fossil fuels are very hard to beat

• How I think about the claim that fossil fuels create dangerous emissions

• How I think the admin should and shouldn’t approach the issue of oil in Venezuelan

• Why I don’t agree with President Trump’s goal of $50 oil

Here’s the full audio and transcript.

Quentin Wittrock

Welcome to Episode 20 of the Extremely Non-Extreme Podcast. I am the host, Quentin Wittrock. Today, we bring you the fourth in a series of podcasts about federal policy issues as we explore 10 policy statements listed in my Principle-Based Politics blog post of November 24th.

Having previously covered immigration and deportation policy along with tax and business regulation, today, we turn to the topic of federal energy policy. My statement is: affordable energy needs require all available resources to be used.

My guest to discuss this is Alex Epstein. Alex is an author and policy commentator based in California. He was recommended to me as a guest on the podcast by an energy industry veteran who described Alex as the person more familiar with federal energy policy than anyone else on the planet. That’s good enough for me. Welcome to the program, Alex.

Alex Epstein

Thanks, Quentin. Great to be here.

Quentin Wittrock

One of the reasons I embarked on this podcast is to help our Extremely Non-Extreme viewers and listeners understand that policy issues are much more complex than the catchy soundbite phrases that politicians spout out to win votes: build the wall, defund the police, no new taxes, etc.

With today’s topic of federal energy policy, I’m thinking there has to be more to it than should we “drill, baby, drill,” or “what do we do when there is no Planet B?” Alex, what do you see as the major federal policy issues facing elected leaders in Washington, DC regarding the topic of energy?

Alex Epstein

Well, just to put this into context, I think everyone should realize that energy is the fundamental industry in America. So I think of it as the industry that powers every other industry, which means, anything you care about in terms of what’s being produced or consumed for that matter, energy is a major input.Which means that the lower cost and more reliable energy is, the lower cost and more reliable everything is; the higher cost and less reliable energy is, the higher cost and less reliable everything is.

It’s a very foundational thing. And before we get into—there’s specific policy debates, but I’ll give you four what you could call verticals that are what I lump everything under, and I think these are the big topics. And then we can talk about what the policy should be.

So one of the big topics is what you could call energy development/permitting. And in many ways this goes beyond energy, which means just how easy or difficult is it to build new energy projects of different kinds. And my view, by the way, is that it is way too difficult to build basically every kind of energy project, but there’s a question of what should be done there.

And with each of these verticals, there’ll be a question of what Congress should do, what the administration should do, and then we could also talk about states, but I’m more focused on federal, and I know this podcast is focused on federal, so federal. So we have permitting/development.

We have electricity, which is the most central part of the energy economy that people are focused on right now, particularly because of the rising demand with the AI revolution, as well as some other causes of rising demand. This is a very central thing and people are seeing problems both with cost and reliability and there are questions about what to do there.

The third area, which today is mostly related to electricity, is the issue of nuclear energy or nuclear power. So this is something that has played a very large role in American electricity, but not nearly as large a role as many of us, many people, including me, think that it could.

And there’s this question of, what can you do to—people will put it as—“create a nuclear renaissance,” but of course, other people might say, “Well, you shouldn’t create a nuclear renaissance,” or “Nuclear is inherently going to be inferior to other technologies economically.” So there’s that whole issue.

So we’ve got permitting, we’ve got electricity, we’ve got nuclear.

And then the fourth issue is what I would call the emissions issue, and this relates to both particulate emissions—things like PM2.5 and nitrous oxide and sulfur dioxide, some of these things, like sulfur dioxide causing smog—but also this issue of greenhouse gas emissions, and in particular CO2 emissions and methane, and what should be the government’s role there.

And whatever side of that you’re on, that is a tremendously consequential set of decisions in terms of the economy because it affects development, and it affects electricity—in some ways it affects nuclear—but in terms of energy development and in terms of electricity policy, the issue of emissions is very foundational.

So those are the four areas. And then I can talk about what I think should be done generally in those areas, but those are the areas that are kind of on everyone’s mind and certainly on my mind.

Quentin Wittrock

I’ve read a lot about energy independence. It’s a phrase we see in the campaign literature. Everyone’s in favor of it. In 2025, the US appears to have improved in nearly every major metric regarding energy production and import/export ratios, but you’ve pointed out these four buckets of problems or barrels, perhaps, I should say, of problems. What can the federal government do in each of those four areas to improve America’s energy independence?

Alex Epstein

Well, I don’t actually think—well, I question, so I’m one of the few people who question energy independence as a goal. Just to give people context, my day job is being an energy expert, energy policy advisor, to a lot of people in government, but my background is philosophy. And one of the things I’ve tried to bring to the energy conversation is intellectual precision, and one key category of intellectual precision is precision of concepts.

And you mentioned that, often, there are these sloppy kinds of formulations or just generic catchphrases, like “Drill, baby, drill,” or “There is no Planet B.” And I think often, the worst is we just have these terms that we take as, oh, this is obviously good, energy independence, but we don’t really examine it. And I think energy independence is getting at something good, but it’s not the right way to think about it and it’s a dangerous way to think about it.

So I think the key things you want are really energy accessibility and energy security. Those are both values. So in terms of accessibility, I talk about this in my book, Fossil Future, you want it to be affordable, reliable, versatile, scalable.

So affordable means people can afford to use a lot of it. Reliable means it’s available when you need it in the quantity you need it, which is particularly crucial for the grid, which has very precise reliability requirements.

There’s versatility. So you need energy for lots of different things, not just electricity, but things like cargo ships and airplanes and often that can only be powered by oil cost-effectively today. And then scalability, you want to be able to have energy, in the case of Americans, for hundreds of millions of people. And then globally, you want it to be billions of people in thousands of places. So that’s the accessibility.

And then another aspect you can think of as accessibility is security, which means that you don’t want it to be disrupted. So there’s reliability in the sense that hey, solar and wind can have reliability issues because the sun isn’t shining as much as you want or at all, or the wind isn’t blowing as much as you want or at all.

But there’s also the issue of well, what happens if something happens to the Strait of Hormuz? What happens to the oil supply? This kind of thing. This is particularly conspicuous in the 1970s with oil, but also more recently with Russia invading Ukraine and Europe’s dependence on Russia.

So this issue of energy security is very important precisely because energy is so important. So any threat of disruption is a really bad thing, but security is different from independence. What independence is often portraying is this idea of self-sufficiency. So we want it all produced inside the US. We want to do everything here. And that is—

Quentin Wittrock

The nationalist traits.

Alex Epstein

Yeah, it has this nationalist element. And what you really want economically, and I would say politically, is you want it produced and traded with partners who are allies. But for example, I think it’s great if we have more trade with Mexico and certainly more trade with Canada. And I would praise many of the things this administration’s done on energy, but one thing I wouldn’t praise would be the policy toward Canada.

We are talking about the potential of Venezuela and a lot of issues there, but Canada has basically unlimited supplies and everything we could imagine—very few people, obviously very friendly government, very aligned, easy to have different kinds of pathways, including pipelines and electricity transmission between us. So I think of it as, well, that’s great.

So if you think about it—well, is it a problem if we’re not producing much uranium here but we get it from Canada, which arguably has the best in the world? I would say no.

What I’m in favor of is energy accessibility, including energy security, but it’s dangerous to have this idea that we need to be self-sufficient. I think it often justifies various schemes and scams like government-dictated ethanol, which I don’t think has any real value. So that sort of gets at my position in terms of what provides energy accessibility, including security, and I would fundamentally say it’s what I call energy freedom, which is leaving producers and consumers to pursue energy as they judge best.

So you mentioned something about, well, we need all kinds of energy resources. I would say we need all cost-effective energy resources, and we—even as an energy policy expert, I don’t think I’m in a position to know exactly what’s going to be cost-effective and what’s not in what situation.

My goal is just to create the political infrastructure such that people can find that out. So I think nuclear has a lot of potential, but the main thing I want to do is get roadblocks out of the way of nuclear. I don’t want the government funding hundreds of nuclear power plants and picking winners and losers and this kind of thing.

So what does energy freedom mean in these different contexts? In the context of permitting and development, I think it means reform that has three attributes. One is it is tech-neutral. Two, it is comprehensive, and three, it is Congressional.

So tech-neutral means every form of energy, every form of infrastructure has the same basic rules permitting it. You don’t decide one administration, oh, I don’t like solar and wind, so we’re going to make that hard. And then the next administration, I don’t like oil and gas, we’re going to make that hard. You see this happening, and that’s really, really devastating because it really means nobody has certainty in terms of permitting, so you need to be tech-neutral.

A second thing is you need to be comprehensive, which means you need to look at every way in which the government is blocking progress. And it’s really astonishing if you know, mining projects can take 20 plus years routinely.

There’s just all these different kinds of things. So there’s different kinds of water permits, and what are called environmental impact statements, which come under something called NEPA, the National Environmental Policy Act. There’s different kinds of air permits that I think are often done invalidly.

So comprehensive means you need to look at the full stack of things that are blocking progress, and you want to make sure that each one is either optimized for human health and safety and really that’s it, and protection of property rights, or it’s eliminated. And so our permitting process is just a disaster.

So tech-neutral, comprehensive, and then Congressional—this is really important—we actually need laws. It’s not enough to say, well, hey, the Trump administration is going to change what the Biden administration did, which is going to change what the Trump administration did, which is going to change what the Obama administration did. We just have this ping-pong. And you can’t do that much with executive orders in terms of long-term stability when you’re talking about projects that take—

Quentin Wittrock

Yeah. It seems like the solution is private capital, as I think the solution is to most things in the world. And private capital doesn’t want to invest and do what it only can do if there is government interference, I take it—

Alex Epstein

Yeah. Now, maybe that segues into electricity. I would say that there are some times when private capital is doing things that it shouldn’t do because it feels like it has some long-term assurance of subsidy. And this relates to the issue of electricity in terms of what does energy freedom mean in the realm of electricity.

And I think there, you need to be tech-neutral, which means you need to get rid of all subsidies and other preferences. And then in particular, you need to get rid of anti-fossil-fuel policies, which I think is the strongest inhibition on electricity as such. There are some other things, but I think those are the two big ones, and they’re related.

Right now, the grid is very non-tech-neutral, still is. Now, I and others were involved in cutting a lot of solar and wind subsidies in what’s called the Big Beautiful Bill.

I tried to cut all the subsidies. I tried to get involved with that. I was not successful in many different ways. I think a lot of other subsidies need to be cut, but those were the biggest and I think most destructive subsidies in terms of giving special preferences for solar and wind.

But there are many other preferences for solar and wind. So there are what are called “renewable portfolio standards” at the state level, which basically dictate, hey, you need a certain percentage of solar and wind, and often it goes up over time, sometimes to a hundred percent. So by 2050, you need to be a hundred percent solar and wind or something close to that.

There’s also—this feels technical, but it’s very important—the way our grids are set up, the rules of what are called the “electricity markets”—which are really just a new kind of monopoly construct—they have pricing rules that disproportionately benefit intermittent energy like solar and wind, and in particular, they don’t value reliability.

There’s a lot of technical detail there, but basically, in most of their transactions, you get paid the same whether you’re a reliable—you could call it—electron, or an unreliable electron, and that leads to lots and lots of problems.

I think we’ve created a huge problem by not valuing reliability in terms of the grid rules and then in fact subsidizing things that are intermittent. So we’ve given just an enormous preference, which has started to walk back to subsidizing and mandating that I believe is one of the root causes of the reason why we have more expensive and less reliable electricity.

The other reason is what you could call anti-fossil-fuel policies, which are attempts to either destroy, disallow, or discourage fossil fuel power in particular, so whether it’s prematurely shutting down a coal plant, passing rules—which the Biden EPA did—to make it illegal to build basically any new natural gas plant beyond a certain date, or just generally discouraging people, trying to force corporations to have net-zero standards.

So what this has done is we’ve just preferred unreliable generation, and then we’ve punished reliable generation. I’m trying to get the government out of that, which doesn’t mean there’s no role for solar and wind, but it does mean I think that they need to be paid properly for the service they provide.

And fundamentally, I think the service they provide is not the service of reliable power. It’s actually fuel saving on reliable power. That’s what solar and wind really do is if you have a gas plant and you have solar and wind operating, you can have fuel savings on the gas plant, and that has a cost to it as well.

It’s definitely not free and you have to see where it makes sense, but if you’re treating them as reliable power sources and then you’re subsidizing them and then prohibiting the competition, that’s a disaster. So that’s what I think needs to be fixed in electricity. I’m happy to talk about nuclear and emissions, but those are the first two.

Quentin Wittrock

All right. Well, let’s go to this, and maybe nuclear and emissions will come into some of the later questions that I have in mind, but on his Day One of his second inauguration, President Trump declared a national energy emergency. And the perceived need is—as we’ve discussed today—reliable, diversified, affordable supply of energy in the United States.

And also, I know that there are 7 billion people in developing nations that need more power to improve their daily life, and another 1 billion in developed nations, other than the United States, which are requiring enormous amounts of energy as well. Do you agree that there is an energy emergency, whether it’s national or not?

Alex Epstein

Yeah, I think there’s a big problem. I think it needs to be more delimited in general. We have more and more of a practice of the administration doing things versus Congress doing things, and hopefully there are some Supreme Court precedents that are changing that.

In general, the job of the administration, its executive branch, is to execute the law. It’s not to make the law. And what we see from both parties is more and more the idea that, well, you appoint the president and they basically do—you appoint them and they’re kind of like the CEO of the company that is America. That’s not the American model, and I think it’s a problematic model, but I think it’s the way that in many ways both parties think about it.

So it’s something like emergency authority. You have to think about, okay, this is something that is really dire. It’s time-limited and you can do something about it. I think that the strongest case there pertains to the grid in particular. So I would constrain it.

And one of the things you’ve seen the administration do—and I think it’s controversial, but there’s a case for it—is what they call 202(c) orders under the Federal Power Act. Under the Federal Power Act, which is a lot of our electricity law, you are authorized to prevent certain power plants from shutting down if you think that there’s an emergency kind of threat.

And what you see is that the Department of Energy has made use of these, and we’ve had multiple times where that power was used and it arguably saved the grid from mass, if not catastrophic, blackouts.

And what I think this shows is, to my point about electricity earlier, we’ve had really bad electricity policy. We’ve fundamentally punished reliable electricity and rewarded unreliable electricity or at least treated intermittent electricity as if it’s reliable and given its special preferences, and that has really been a disaster.

And I’ll say that I’m more sympathetic to the use of emergency authorities with things that the government controls than things that it doesn’t control.

And part of the thing is the electricity system, for better or worse, and I think long-term worse, is a monopoly system including the so-called “markets.” As I mentioned, these are monopoly constructs. The transmission is monopolized. The distribution, so the long wires, the short wires, that’s the distribution, are monopolized. And then the government creates this really, in my view, weird, set of rules that creates competition among certain generators, but it’s all controlled by the government.

So when the government is taking responsibility for something, if it’s screwed it up, it needs to do something to fix that. And people who choose to participate in electricity, which I’m glad they do, they’re not fully private entities because they’re all part of this monopoly thing.

So I think the emergency thing, when you have a really dire situation that can be reversed in terms of the federal government, I think that has validity. I don’t think you can say there’s an overall energy emergency, like there’s an emergency in terms of oil supply. I mean, we have fairly low oil prices right now. So you don’t want to constrain it. You don’t want to be too broad.

An example of being too broad—I would say way too broad—is the previous administration strongly considering declaring a climate emergency, and note that this shows you the ping-pong because the climate emergency basically meant we have way too much fossil fuels available and we need to radically reduce that and that’s going to somehow change the global climate, even though we have relatively small share of emissions and it’s shrinking.

And that’s part of the reason why, even if it’s dire, you can’t call it an emergency if we don’t really have control over it and it’s a long-term thing. But notice this problem where it’s like one administration says it’s an emergency that we have too much fossil fuel use, and the next one says it’s an emergency we don’t have enough. You don’t want to be governing that way. So I would constrain the emergency authority, but there are big energy problems and as I’ve said for six years now, the grid is the biggest problem.

Quentin Wittrock

Interesting. That’s an excellent point well-made. I know you’ve written a book though on fossil fuels, Alex, and—

Alex Epstein

Two. Yeah.

Quentin Wittrock

Two. Where does the future of that particular energy source fit in with hydrogen, renewable, natural gas, wind, solar, other options?

Alex Epstein

Well, I mentioned the four elements of energy accessibility in terms of affordability, reliability, versatility, and scalability, and we still don’t have anything that can replace fossil fuels on those four accounts, which is why we have this seemingly bizarre phenomenon where the whole world for a while says, “We hate fossil fuels.”

I mean the United States has been somewhat the exception when Trump has been president, but if you look at things like net-zero commitments around the world, in the corporate world as well as the political world, the corporate world, and the investment world, I mean, I would say the idea that fossil fuel use needs to be rapidly eliminated was, for years, the literally most popular political idea in the world.

And yet, fossil fuel use continues to grow and has continued to grow year over year. The only exception being COVID where it’s just there wasn’t much activity.

But that’s really striking, that everyone says they hate something and are committed to rapidly getting rid of it, and it keeps growing. I think that points to whatever people say, on some level, they need energy and they need it to be accessible to as many people as possible.

And the lack of real competition to fossil fuels has prevented fossil fuel use even from shrinking, let alone from being rapidly eliminated, and this is with lots of punishments directed at fossil fuels and lots of preferences, particularly for solar and wind. So I would say that just in terms of raw economics, fossil fuels are really, really hard to beat.

As I talk about in my more recent book, Fossil Future, there’s a combination of three attributes that they have that’s really, really hard to beat, which is that they’re naturally abundant. So there’s just a lot of them, like 10 times more than we’ve used in the entire history of civilization you still have underground.

Coal, particularly, is infinite, and we can harvest it in different ways. Gas in the US is. Oil’s a little bit more constrained, but still a ton of it. We’ve got that. So it’s abundant, but then it’s also naturally concentrated. So you have a lot of energy in a small amount of space, and it’s naturally stored.

And what the concentrated and stored does is very important because it allows you to really efficiently handle the energy. It doesn’t take up a lot of space, and can easily be transported, which is really good for things like mobility. And because it’s stored, you don’t need things like batteries or any other man-made storage.

It turns out that natural energy storage is a huge starting advantage, because if you just have the energy sitting there and all you have to do is release it, like refine it and release it in the case of oil, that’s a lot easier than you’re just taking in some flow of energy, like sunlight and wind, and then you have to provide the storage. It turns out man-made storage is a total pain to do on the scale that we have, that we’re used to with natural storage.

So it’s really hard to do that. The energy source that really seems to compete with that hypothetically is nuclear because that’s also naturally abundant, naturally concentrated, naturally stored. It is much more technically complex to harness, and I would say it’s been even more punished regulatorily than fossil fuels have.

So that’s why nuclear is a big effort, and maybe I’ll just put in the plug for the nuclear policy in terms of energy freedom, which is really, it’s related to the permitting. There’s a lot of the permitting stuff that just needs to be made much, much faster.

And then a lot of the way in which nuclear danger is—I wouldn’t say recognized, but attributed—needs to be made more realistic. The government has decided that it is good—they’re starting to change this, but there’s been this idea in nuclear that it’s totally okay to overstate the threat of radiation by a factor of 50 or more, that it’s just good, it’s being on the safe side. But that is not good.

You want to know objectively, hey, what’s a safe level? What’s a level that’s benign? What’s a level that has a little risk? But it turns out we set the risk, the allowable levels that people can be exposed to, even in the case of an accident, at 50 times what they should be, and that just means you pay all sorts of costs to literally get no benefit.

So the whole safety thing needs to be made objective versus this idea that there’s no such thing as too little radiation. That is false. There is such a thing as too little because it’s going to make your energy more expensive and then you need to fix the permitting around it.

So that’s a big project, and nuclear, I think, can play a huge role in the future. It has the fundamental attributes, but it is not a near-term scalable thing that’s going to—it’s not going to grow enough to rapidly meet the new demand, let alone replacing the existing demand.

And this is where so many people have been wrong in electricity is they’ve had this idea, hey, let’s get rid of fossil fuels and then let’s hope something replaces it. That’s a really bad way of thinking about things. How about you find the replacement, you prove it, and then it can displace something if it’s actually better.

But we created this problem where we had flat demand, we started driving fossil fuels off the grid. We were restricting nuclear, so nuclear couldn’t really do much at the margin. And then we pretended that intermittent solar and wind was doing it, and then it wasn’t. And then demand went up, and now, we’re in the pretty disastrous situation we are in where we’re having all these reliability issues. It’s hard for us to handle a winter storm, and we’ve barely begun on the AI demand.

Quentin Wittrock

But on fossil fuels though, the one thing you hadn’t talked about in detail is the emissions issue.

Alex Epstein

Yes.

Quentin Wittrock

Is that an issue, emissions, primarily tied to fossil fuels, or are there dangerous emissions from all of these sources?

Alex Epstein

No. Well, emissions in the sense of air emissions, which is the main kind of emission people are concerned with, that’s—I mean, with wood, it depends on what you mean by all sources. So there are emissions issues with wood, with burning wood. I mean certainly plenty with those.

And then with alcohol fuels like ethanol to some extent, there are certain things that are worse, but there are a lot of things that are cleaner burning of alcohol fuels than oil-based fuels or coal-based fuels.

Gas burns pretty cleanly. So if you take the standard kinds of what people will call “pollutants,” the general trajectory has been that fossil fuels have been getting way cleaner. So that’s just much, much, much—coal is much, much cleaner. Gas was already pretty clean, but it’s even cleaner. Oil has gotten much cleaner.

The real emission issue that’s been driving policy is the greenhouse gas emission, in particular CO2 emission. And that’s what a lot of my work on fossil fuels has been about—analyzing how to think about that issue—because it is true that when you burn—so you’re burning fossil fuels, which are this uniquely available form of energy that we have no near-term replacement for, but then it is true that when you burn them, you get this accumulation of greenhouse gases.

And one of the things is with a standard emission—let’s say you emit some soot into the air—it’s not great, all things being equal, but it pretty quickly dissipates. It pretty quickly gets cleared.

Now, of course you can emit more. But one thing about greenhouse gases, they accumulate over time. So you emit CO2 in the atmosphere. The atmosphere doesn’t clear it very quickly, which is why you see we have levels of CO2 that have gone up and pretty clearly because we’re burning fossil fuels and we see 270, 280 parts per million, so that’s like 0.028% of the atmosphere pre-industrial revolution, and now we’re above, what, 420 parts per million.

So it’s gone up by about 50%. And most scientists think, and I’m inclined to agree, that this has a warming influence on the atmosphere. And all things being equal, and that’s tricky because all things don’t stay equal, but all things being equal, the more greenhouse gases you have in the atmosphere, the more warmth that you’re going to have on the planet.

And this is an important thing to think about. So the energy—this uniquely available or cost-effective form of energy we have—has this side-effect of having a warming influence. And as a philosopher, I think one of my leading contributions has been to think about this in an even-handed and pro-human way. So often the way people think about it is, well, we’re impacting the climate, we’re causing “climate change,” so let’s get rid of fossil fuels.

But wait a second, that’s not considering the benefit of fossil fuels. That’s just considering the side-effects of fossil fuels. And not only is it just considering the side-effects, it’s treating the side-effects as uniformly negative, but to say that you’re warming the atmosphere doesn’t mean that it’s all bad.

You have to objectively look at that and see, well, where is warming good? Where is warming not good? And then also there’s, CO2 also has a greening effect on plant life and then has a certain effect on the ocean.

So you want to be even-handed about this and I would also say pro-human. So when you’re thinking about the effects, whether on climate or on energy availability, there’s a question of how are you measuring this? Are you measuring it by what’s good for human life or are you measuring it by the idea of zero impact? Like impact is evil. We want to minimize all impact.

And I think unwittingly, many people have adopted this idea that just impact is bad. So if we’re having any impact on the climate, it must be bad and we need to stop. And my view is if our impacts are netting out to where fossil fuels are overall a huge improvement, that’s good as far as I’m concerned.

And my basic analysis is that fossil fuels are so beneficial that they’re incredibly a net benefit, and including in terms of the livability of the climate, they’re a net benefit, a) because there is a lot of benefit to warming, but even when there are harms to warming, it’s offset by the energy we get from fossil fuels, which makes us incredibly resilient.

And one fact that I’ve highlighted is the death rate from climate disasters has plummeted over the last century, and that’s because our resilience, which I believe has made possible with fossil fuels, has far outstripped any climate challenges, and I think that will continue to be.

So it is not that it’s a “climate change denier” position, which is often the caricature, but it is rather that the challenges are outpaced by the resilience or what I’ll call the mastery of climate. And as long as that happens, you’re in good shape. So I do believe we have an impact on climate, but I don’t think it’s fundamentally a problem, and I don’t think it’s a problem that justifies reducing the accessibility of energy.

Quentin Wittrock

Let’s talk then about one particular fossil fuel that has been in the news, a great deal in political news lately, and that’s this vast reservoir of Venezuelan oil. Could greater access to the oil under Venezuela be a good thing for the US taxpayer and the fuel purchaser? Or is it just a good thing for oil companies?

Alex Epstein

It’s an interesting question. I mean, those are very related. So actually, if it’s good for oil companies, it’ll be good for the US consumer. There’s a real question of how good it is going to be for oil companies.

So let’s just give a little bit of a history of Venezuela. So this is a place where it—as happened in many different countries we’ve called the West, particularly the US, and I forget exactly who was involved in the Venezuela discovery—but what happened often is in the US and some extent, Europe, we innovated ways of finding and developing oil reserves or oil deposits that were unknown to and inaccessible by the countries and cultures and economic systems of the time.

So Saudi Arabia, if you read the book, The Prize by Daniel Yergin, which is very good on this stuff, he’ll talk about how when we, as in American oil companies and others, went into Saudi Arabia, they weren’t even thinking about oil because they could barely find water. And the US and other companies made agreements with governments.

And what happened over time—and I do think this is a huge mistake—was that the countries violated the agreements, often nationalizing the oil and not properly compensating the companies. And the US government sort of just allowed that to happen, which, it was kind of the thing to do to just allow people to nationalize things.

So what this ended up—this is one reason why we empowered a lot of really bad people around the world—is you have these thieves who just get unbelievably enriched by violating an agreement that had been made. And you see lots of this in the Middle East, you see lots of this in Latin America, and it leads to large problems, including in many cases, though not all, the regimes are so dysfunctional that they end up suppressing the oil supply.

So Saudi Arabia has been a place where that hasn’t happened as much. In part, the oil is so easy to get, and they’ve been better at preserving it. Venezuela has been a case where they just, with Chavez and Maduro—you’re talking about going from, say, 3 million barrels a day to less than a million which is where we’re at today.

So the question of what—and one thing that’s happened to the companies is it’s not like the companies have had this paradise operating in these regimes. They’ve often lost their money, and in particular with Venezuela, companies have lost a ton, and Chevron is still owed a ton. I think ConocoPhillips is owed something like $10 billion. It’s been a mess, and you see a lot of reluctance to go in. Darren Woods, when the White House had this event, called it uninvestable for them at this time.

So there’s this real question of how big an opportunity is this, how to pursue it. I’d contrast it with Canada, which I mentioned earlier, where Canada, they have a lot of production, I think right now, around a third of what we have, but they could have more. We could be transporting a lot more of their oil to us. I’m not fundamentally excited about Venezuela as an energy source in the way that I am Canada.

Now, Venezuela—the ideal thing I think would be, for everyone, would be if you had a good, civilized, democratically elected government that had rule of law and safety in the country. And then companies from the US and other places would feel comfortable going in there and that their agreements would be protected by that government, but as well as our government.

So that’d be good for everybody. And I think insofar as we’re trying to make policy there, that’s really important. I mean, we ultimately want a real alliance there. We want Venezuela to go—and I think there’s a real opportunity in Venezuela because a lot of the people want this. We want it to be a functional country.

I don’t think we should think of it as this is our oil piggy bank. Even though and insofar as we think of it that way, it’s really that the money that was stolen from US companies should be repaid at some point. And I think that is a precondition for doing anything more, and this is where, so far, the administration has not focused on that, and I think they should.

They should focus on, hey, it’s not—it’s too much like this is a pot of oil for the American people versus, no, this is oil. If Venezuela has broken certain agreements, then the people who are the victim of that should be repaid.

But in general, Venezuela should be a free civilized country that can hopefully develop oil and is a friendly environment. And we’ll make sure that our companies are protected if they operate in that. So that’s what I would advocate, but this is not going to—let’s just be clear: this is not going to be lowering your gasoline prices in the near future.

Quentin Wittrock

Speaking of prices, that’s going to be my concluding question. President Trump has talked about goals of $50 per barrel of crude oil and $2 gallons of gas. How would that work economically? The federal government doesn’t control those prices. Is that possible? And how would it work? Or is it even a laudable goal?

Alex Epstein

I don’t think it’s the right goal. I think the right goal is—you want—I put it as energy freedom, including in oil and gas—what you want is freedom of development, freedom of competition, and over time, that will lead to relatively low affordable prices, depending on the market at a given time. But that’s what you want.

I mean, you always, in every market, what you want is for people to be free so that they can compete to produce the best thing at the best price while making a profit. The “while making a profit” is really important because otherwise, they will not be in business.

Let’s look at Venezuela by the way. People can’t make a profit making oil in Venezuela. So guess what? They don’t have super cheap gasoline. They just have total dysfunction that you don’t want to—I definitely don’t believe in subsidizing American oil producers—but you do not want to be taking actions to artificially lower their profits. That leads to less innovation that’ll lead to higher prices over time.

And it is just not a good relationship to have with business. I don’t think the president should have a stance on, hey, this is the perfect price of oil, and in particular, $50. I think the reference there is some number of years ago before a lot of inflation. So I don’t think that. I think it should be, hey, the government should make it as easy as possible to produce this and then encourage that around the world.

That’s different from, I would say—different administrations in the past, at least, have pressured OPEC: “Let’s turn on the spigot. Let’s produce more pre-elections,” and stuff like that. This definitely happened with the Biden administration at least. I don’t think they should be doing that. I think they should just—oil is like everything else.

You shouldn’t be trying to set a price ceiling for oil. You should just allow producers and consumers to be free, and that’ll lead to lower gasoline prices over time. Or guess what, it’ll lead to people finding superior substitutes.

So if the oil industry can’t provide low enough prices, then maybe, we’ll actually find a cost-effective way to use ethanol, which is at least hypothetically possible in certain ways, though, not the policies we have now. Or EVs, I am totally in favor of EVs as long as they’re not subsidized and compete on the market. And I think at some point, we’ll be using a lot more EVs.

So again, it’s energy freedom. It’s definitely not about the government deciding, “I’ve just decided you randomly pay the same.” It’s like, Trump should not be saying what the price of oil is, nor should he be saying what the price of housing is. In the case of housing, interestingly, he wants those prices to go up. He said, “I want the price of houses to go up because I want the people whose money is in their home to get more money.”

And I don’t think that’s the government’s job, and it’s not the government’s job to keep prices high. It’s not the government’s job to keep prices low. It’s just to leave us free to produce and trade, and that leads to a world where we’re more and more prosperous in energy and in everything else.

Quentin Wittrock

Wow. This has been wonderful. My guest today has been Alex Epstein, and you can find him at alexepstein.com. Alex, why don’t you tell us the names of your books in case people are interested in reading more about these topics?

Alex Epstein

Sure. So my main book that people should read is called Fossil Future. It came out in 2022, and I think it’s held up very, very well in terms of its predictions about what would happen, including what would happen with energy and AI. And I think it, and my other work, has played a pretty significant role in changing the conversation on this issue. My first book is called The Moral Case for Fossil Fuels, but I don’t encourage people to read that just because I think it’s been superseded by the book Fossil Future.

And I would just say if people want to follow my writing in particular, I have a Substack, alexepstein.substack.com, and that is just a free—you can just get the free version of it and you’ll just get, I would say, some of the most useful energy commentary in the world. And hopefully, if you like this, I think you’ll really like the free Substack.

Quentin Wittrock

Very well. Thank you so much for your time, Alex. I know you’re a busy man and highly in demand, so—

Alex Epstein

Well, I appreciate it. And I’ll just say, as I told you before, I’m giving special preference to podcasts that are trying to be nonpartisan or even think they’re partisan against my position because I do believe that energy abundance and energy freedom should be nonpartisan issues.

And if we’re going to get stuff done Congressionally, we need people to transcend party lines. That’s one reason why I wanted to do this podcast, and I hope other nonpartisan, or even just Democrat, podcasts invite me on so we can have some of these conversations.

Quentin Wittrock

Excellent. Well, with the name of my podcast being Extremely Non-Extreme, I think that most things should be much more nonpartisan than they are, energy policy being one of those.

I think my wrap-up message for listeners today is, if you came into this podcast believing that energy is a simple thing from a political standpoint and “drill, baby, drill” will do it, or the Green New Deal will do it, and you can spout that on social media and sound smart—I hope you realize now that it’s much more complicated than that. These issues are interrelated and Alex has done an excellent job of explaining them to us.

So with that, we’ll close now and we’ll see you all again on Episode 21 of the Extremely Non-Extreme Podcast. Thanks again, Alex.

Alex Epstein

Thank you.

Share

Questions about this article? Ask AlexAI, my chatbot for energy and climate answers:

Try AlexAI for free

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

Subscribe now

Share Energy Talking Points by Alex Epstein

Here are some of my favorite talking points I’ve created or shared over the last week.

On California’s irrational oil imports:

More than 40% of California’s oil starts in Texas or Louisiana, is shipped 1000 miles to the Bahamas, and then is shipped 4000 miles to CA.

Why??

Because:

1) California’s anti-freedom “climate” policies have made it illegal for CA oil operators to supply the oil Californians need.

2) The anti-freedom “Jones Act” prohibits domestic shipments unless they go on super-expensive, US-built and US-crewed ships (!)

Unleash energy freedom!

Share this on X

On the consequences of state “net zero” policies:

California, Oregon, Minnesota, Rhode Island, Maine, Massachusetts and Vermont have aggressive (75-100%) zero-emission electricity mandates AND bans on new nuclear power.

If these states don’t repeal these policies—and soon—they will face:

1) sky-high electricity rates (from catastrophically expensive overbuilds of solar/wind/batteries and carbon capture), or, eventually,

2) catastrophic blackouts.

Share this on X

On the practice of using mobile gas turbines to power data centers:

The US has such a shortage of reliable electricity supply that AI developers are putting gas turbines on semi-trucks in order to power data centers.

This is impressive...but the only reason that companies have to use these kinds of workarounds is that anti-fossil-fuel policies have made it so hard to build normal power plants!

We need to unleash American energy.

Share this on X

On solar and wind dominating 2026 electricity “capacity” additions:

Solar and wind are projected to dominate 2026 electricity additions, with only a small amount of natural gas (7%) in the mix.

This is a huge problem for electricity prices, because we pay for solar and wind on top of the cost of reliable power sources, not instead of!

Share this on X

On dishonest reporting about the Great Barrier Reef:

The amount of coral in the Great Barrier Reef has been trending upward since the 80s.

Last year, coral declined from the prior year. Short-term declines are common due to effects like storms or parasitic starfish.

Of course, the BBC reported this as the worst decline on record!

Share this on X

On the myth that solar and wind provide “low-cost energy”:

Senate minority leader Chuck Schumer wants more solar and wind projects to qualify for subsidies, saying they would “provide low-cost energy.”

False.

Solar and wind don’t replace reliable power sources, they just save them fuel—and almost always at great expense!

Share this on X

On Illinois requiring new nuclear power:

Illinois Governor JB Pritzker just issued an order aimed at facilitating at least 2 GW in nuclear capacity additions.

It’s good to see an increasingly wider recognition of the potential of nuclear power, which has been stunted for decades by pseudoscientific regulation.

However, governments shouldn’t replace the criminalization of nuclear with mandates for certain amounts of nuclear.

In its current form, nuclear is (unfortunately and unnecessarily) highly expensive to build. In many cases it would be cheaper to build natural gas—which Illinois can’t, because of its “net zero” electricity mandate.

If Illinois wants cheap, reliable electricity, it should repeal its “net zero” mandate and let the market determine what generation needs to be built.

Share this on X

On “petro masculinity”:

Contrary to the idea that women are suffering from “petro masculinity,” women live decades longer and have much better lives thanks to fossil fuels. The real problem is that not enough women have access to fossil fuels.

Share this on X

Questions about this article? Ask AlexAI, my chatbot for energy and climate answers:

Try AlexAI for free

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

Subscribe now

Share Energy Talking Points by Alex Epstein

Here are some of my favorite talking points I’ve created or shared over the last week.

On US nuclear’s failure to launch:

Of the 75 nuclear reactors under construction worldwide, according to the World Nuclear Association, 38 are in China.

Why not in the US?

Because of pseudoscientific regulations that have shut down our would-be nuclear renaissance for over 50 years.

Unleash nuclear energy!

Share this on X

On China’s “coalar” power:

When you hear about “solar” in China it’s really “coalar.”

Coal is a reliable power source, the kind every grid needs to provide on-demand, all-the-time power.

Solar is an intermittent fuel-saver for reliable power sources. It doesn’t replace them.

Share this on X

On electricity prices going up despite natural gas getting cheaper:

The number one source of electricity on the grid is natural gas.

Its price has fallen since 2010.

Meanwhile, electricity prices have gone up significantly.

This shouldn’t happen.

This is the direct result of anti-fossil-fuel policies based on the dangerous and false belief that solar, wind, and batteries are replacing fossil fuels.

Share this on X

On supposed destruction from fossil fueled “climate change”:

AOC to Shell: “I’m willing to hold you accountable for lying about climate change for 30 years when you secretly knew the entire time that fossil fuels emissions would destroy our planet.”

Is this the destruction she is talking about?

Share this on X

On the claim that solar and wind are cost-competitive:

We often hear the claim that intermittent solar and wind are cost-competitive with reliable sources of electricity.

This is an accounting fraud.

The cost of solar and wind is paid on top of the cost of an on-demand power source, not instead of it, because solar and wind can’t be relied on to produce 24/7/365 electricity.

Share this on X

On solar having zero real “capacity”:

As badly as wind performed during recent winter weather, solar performed far, far worse.

As often happens during winter storms, solar was mostly or totally useless during the times of highest demand (evening and early morning).

In Florida, which was hit later than other states by Winter Storm Fern’s cold, solar provided zero help during its intense evening peak demand on 1/31 and 2/1, barely any help during the morning peak of 2/1, and zero help during its highest demand time of all, the morning peak of 2/2.

Solar’s real “capacity” was obviously zero.

Share this on X

On energy poverty in Sub-Saharan Africa:

In some African countries, less than a quarter of the population has access to basic electricity for even four hours a day.

Meanwhile in the West, our designated experts tell us that “climate change” is a global emergency.

If they bothered to consult Sub-Saharan Africans, they might have a different view of what qualifies as an emergency...

Share this on X

On the myth of solar and wind’s self-sufficiency:

When you see that a new solar and wind project is said to “power” some large number of homes or factories or data centers—know that the solar and wind are “powering” nothing by themselves, since they are entirely dependent on on-demand power sources.

Better to think of them as “coalar” (coal+solar) or “golar” (gas+solar) or “cwind” (coal + wind) or “gwind” (gas + wind).

Share this on X

Questions about this article? Ask AlexAI, my chatbot for energy and climate answers:

Try AlexAI for free

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

Subscribe now

Share Energy Talking Points by Alex Epstein

We’re bombarded with supposed examples of solar/wind rapidly and cheaply replacing fossil fuel power: rapid rises in solar/wind “capacity”1 or “generation”2; solar/wind credited for supplying most of a day’s electricity3; stats claiming solar/wind is now cheaper than fossil fuels4.

Advocates of solar and wind replacing fossil fuel power downplay the obvious, glaring problem that the grid requires electricity on-demand and that weather-determined, intermittent solar and wind can provide nothing resembling that. They either don’t mention intermittency or claim it’s easily addressed.

Take Elon Musk. He posts incessantly about solar replacing fossil fuels, and the vast majority of the time he doesn’t mention the intermittency at all! When he does he treats it as trivial, e.g., addressable by just storing excess daytime power in batteries and deploying it at night.5

If you want to understand why intermittent solar and wind are not rapidly and cheaply replacing fossil fuel power, there is no better case study than their frequent disappearance during the high-demand week of Winter Storm Fern (1/23 to 1/31)—and the high costs this imposed on the public.

Solar/wind frequently disappeared during Storm Fern’s huge power demand, leaving Americans 100% reliant on our gutted reliable power sources

The electricity grid that our lives and prosperity depend on requires that power plants and their supporting infrastructure—pipelines, transmission lines, distribution lines—provide exactly as much supply of electricity as consumers demand. If our power plants can’t do this, the grid blacks out.

For any technology to replace fossil fuel power, in whole or in part, it needs to make a reliable contribution to providing the on-demand, all-the-time (24/7/365) power our grid needs to work. In technical terms, it needs to provide “capacity”—the ability to generate electricity as-needed. If a technology can’t reliably provide capacity then we still need the exact same amount of fossil fuel power infrastructure to meet demand.

Arguably, the single most important time for a power source to operate reliably is during winter storms, where demand is high, persistent, and existential. E.g., the cold from Storm Fern generated near-record winter demand throughout the country, causing a week-long period of extreme electricity consumption such that if the power went off many Americans would quickly freeze to death.6

We commonly hear about the impressive “capacity” growth of wind and solar7. But this is a perversion of the proper meaning of “capacity.” For traditional, reliable power plants—nuclear, coal, gas, oil—“capacity” is the amount of electricity it can generate on-demand, when needed. For solar and wind, “capacity” is the maximum potential electricity it can generate when there are perfect weather conditions. Storm Fern showed how in real-world conditions, solar and wind’s “capacity” is an illusion.

Wind frequently provided very little electricity at times of high demand during Storm Fern. For example, the Mid-Atlantic grid (“PJM”) and the Midwest grid (“MISO”) each had at least one morning of peak demand where wind performed at around (and sometimes lower than) 10% of its supposed “capacity.” And for a 6-hour mid-day period on 1/29 in MISO, wind provided only around 2% of its “capacity.”8

As badly as wind performed during Storm Fern, solar—which Elon Musk and his acolytes treat as infinitely superior to wind—performed far, far worse. As often happens during winter storms, solar was mostly or totally useless during the times of highest demand (evening and early morning).

Observe that in Florida, which was hit later than other states by Storm Fern’s cold, solar provided zero help during its intense evening peak demand on 1/31 and 2/1, barely any help during the morning peak of 2/1, and zero help during its highest demand time of all, the morning peak of 2/2. Solar’s real “capacity” was obviously zero.9

Not only did solar predictably disappear when needed most, during evenings and early mornings, it also underperformed during the day—meaning it could not reliably charge the batteries we are told are solar’s savior. Observe that in New England, solar performed far, far lower than its “capacity” for days on end, to the point that burning wood and trash often provided significantly more electricity than solar.10

We are often told that if you combine solar and wind together, they’re somehow reliable. But this is not true, as Storm Fern painfully illustrated. For long stretches of time in most affected grids, solar/wind combined generated less than 10% of their supposed “capacity”—meaning that even together they couldn’t be relied upon to provide power or charge batteries.11

The only reason that the lights and heat stayed on around the country during Storm Fern is that we have, barely, kept enough reliable capacity to provide all the power when solar and wind disappear. But just barely, and at great cost, since the anti-fossil-fuel policies urged by solar/wind propagandists have reduced the supply of reliable power plants and supporting infrastructure.12

Had we not shut down so many coal plants and suppressed so many pipelines and prevented so many gas plants,13 Storm Fern’s demand could have been easily and cheaply met. Instead, it strained grids, spiked power prices, and spiked heating prices when solar/wind failed to deliver.14

Storm Fern was a perfect litmus test for purported replacements of fossil fuels. If a type of “power” or “capacity” cannot reliably contribute to preventing Americans from freezing to death during a week of nationwide cold weather, whatever else it is doing it is absolutely not replacing fossil fuels. Solar and wind failed that test.

Note that while we hear stories of various types of electricity struggling under winter storms, such as a natural gas line or plant failing, those struggles are not inherent in the technology like solar and wind’s struggles are. Fossil fuel power can be weatherized to provide reliable power from the coldest places on Earth (e.g., Antarctica) to the warmest (e.g., Saudi Arabia). The lack of sunlight and wind during winter storms (or summer nights during heat waves) cannot be fixed.

Because solar/wind can go to 0 and can underperform for long periods, they can’t reliably produce power or reliably charge batteries

When you see Elon Musk and others posting about the ability of solar to replace fossil fuel power, they are assuming solar (or wind), despite being intermittent and therefore unreliable, has “capacity value”—that it can be relied on to generate the on-demand power the grid requires, usually through the alleged magic of batteries. This is false.

Because solar and wind can go to zero at any given time, they clearly cannot replace any reliable capacity on their own. And because solar and wind can underperform for prolonged periods, they also can’t provide a reliable surplus to charge the batteries that can allegedly make them reliable!

While the benefits of batteries to provide spare capacity are usually attributed to solar/wind, the benefits of batteries actually depend on the reliable power provided by fossil fuel power and nuclear power—which can reliably charge batteries during off-peak hours.

Winter storms, which affect some 2/3 of the US, are one reason solar and wind can’t provide reliable capacity. But they are not the only reason. There are multiple ways solar and wind can disappear that affect the rest of the US, including prolonged rainstorms that sabotage solar generation in areas with limited wind potential.

In the Southeast there’s barely any wind, so wind turbines are rare in the first place. But there are plenty of tropical storms to wipe out most solar for a week. In sunny California, an atmospheric river or other precipitation event can wipe out most solar generation for a week or more, or cause a multi-day period where the output from both solar and wind is very low.

Even in sun-drenched Arizona, which you might think has reliable solar, we’ve seen that storms can render solar useless for prolonged periods. In January of 2010 a series of three low-pressure systems wiped out most of Arizona’s solar for 6 days!15 The bottom line: Weather fluctuations throughout the country are simply devastating for attempts at self-sufficient solar/wind/battery generation.16

The only way to make solar or wind reliable power sources is to pay so much for “overbuilding” and multi-day storage that it costs 10-20X gas power

The only way you can rely on just solar, wind, and batteries to provide on-demand, all-the-time electricity—is a combination of “overbuilding” and multi-day storage that would end up costing, in free-market conditions, 10-20X what a natural gas plant does!

Overbuilding: One way to partially compensate for solar and wind’s erratic performance is to build so much of them that even when their output is low (such as 1/10th its maximum potential) you still have enough power to meet demand—and plenty of surplus to charge batteries for when even your overbuilt solar and wind can’t meet demand (such as solar every night or when the wind almost totally dies down).

Overbuilding, even putting aside storage, is a huge expense. Every 10X you overbuild solar costs you $12,500/kW and wind costs you $13,200/kW, vs. the $1,000/kW natural gas power cost before anti-fossil-fuel policies created artificial shortages and drove the price to $2,400/kW.17

Multi-day storage: When you’re dealing with extended periods of suppressed output for solar and wind, even if you do a 10X overbuild you still need batteries to handle solar’s nights + multi-day disappearances and wind’s long lulls. Every day of battery storage costs about $6,000/kW, so for 3-7 days you’re talking $18,000-$42,000/kW (the higher part of the range is more realistic for solar).18

To see all this for yourself, ask any elite AI what it would take (and cost) for just solar, wind, and batteries (or just solar and batteries if you just like solar) to meet year-round demand, including winter peak demand, in a given region. This is the standard needed to provide real capacity that could truly replace fossil fuel capacity, whether you are talking about 1% or 100% of capacity. Here’s my prompting template.

What is the ideal mix of self-sufficient [solar+batteries OR wind+batteries OR solar/wind+ batteries] to meet year-round demand, including winter peak demand, in [region]?

Do not use any subsidies as part of your calculation, only use unsubsidized prices.

How much “overbuilding” of the intermittent generation is needed, and how much battery storage (measured in winter peak hourly demand * 24 hours) is needed?

The system must be able to handle the most adverse weather conditions (least favorable toward solar/wind generation) of the last 30 years, including the recent Storm Fern.

The system should have the standard 15% reserve margin. As part of your analysis, give me the cost of the system per KW of dispatchable capacity (peak demand plus the 15% reserve margin).

Here are queries from Gemini 3 Pro Deep Think19, ChatGPT 5.2 Pro20, and Grok 4 Heavy21 calculating the cost of just solar+batteries, since that is the scheme we are most prominently told is our savior, in the Mid-Atlantic (“PJM” region), which is the biggest grid in the US.

Gemini estimates that powering PJM on solar+batteries would cost $7.24 trillion in capital costs and $41,970/kW. ChatGPT estimates $5.70 trillion in capital costs and $33,300/kW. Grok estimates $4.09 trillion in capital costs and $23,700/kW. Compared to $1,000/kW for a natural gas plant! (Note: I generally find Grok, which is led by Elon Musk, to be the least objective AI about the limits of solar and batteries.)

To do a rough apples-to-apples cost comparison of natural gas vs. solar/wind/batteries, you also have to add

• For natural gas: Maintenance and (most expensive) the net-present-value cost of the fuel for natural gas (maybe $2K/kW over 30 years without anti-fossil-fuel policies22).

• For solar/wind/batteries: Full equipment replacements after 10-20 years if the batteries do the heavy lifting of balancing the grid with frequent cycling23 (at least $5K/kW, probably much more)—as well as transmission infrastructure (unless you want residential systems that cost at least 2-3X more if you take into account the lower efficiency per panel because of the suboptimal rooftop placement).24

Bottom line: Solar/wind/battery’s replacement and other costs over time will far outweigh the fuel cost of gas.

Any realistic estimate of the cost of self-sufficient solar/wind plus batteries is initially going to be at least 20X the free-market price of a natural gas plant, and the lifetime estimate is going to be at least 10X. Considerably worse if you’re just using solar, which totally disappears >1/2 the time and thus requires catastrophically large amounts of storage.

Because the lifetime cost of self-sufficient solar/wind/batteries, let alone the far more expensive solar/batteries, is well over 10X that of a gas plant, no one in reality is trying to build self-sufficient solar/wind/batteries. But many of our most influential energy commentators—including Elon Musk, arguably the most influential—are misrepresenting solar/wind/batteries as actually self-sufficient and therefore replacements for reliable power sources.

What about the supposedly “exponential” decline in wind turbine, solar panel, and battery prices? If you look at the full cost of wind, solar, and battery systems there is nothing on the horizon that will make them remotely plausible as standalone power sources.

For wind turbines, there is no longer anything resembling an exponential price decline25. Solar panels will likely continue to decline in price—how fast is unclear—but panels are now only about 15-30% of a solar project’s costs; the rest are materials, structures, and labor needed to make a project work, and these won’t decline anywhere near exponentially.26

Batteries will likely continue to decline in price—which is great for many applications, including the reliable storage of reliable electricity sources. Most of the cost drops will be in the battery cells themselves, although those drops will be limited by the costs of the mined materials involved27. As with solar there are significant other materials, structures, and labor to make a system work that won’t rapidly go down in price. Thus standalone solar/wind/battery capacity remains a remote fantasy.

Solar and wind shouldn’t be thought of as reliable power sources, but rather intermittent fuel-savers for reliable power sources

If solar and wind are not replacements for fossil fuel power, what are they? After all, they are doing something—witness charts showing large amounts of “generation” in a day or the largest growth in “generation” and “capacity” over time28. That “something” is saving fuel for reliable power sources.

Any grid, to be responsible, needs an amount of reliable, on-demand power that exceeds by a comfortable margin (a “reserve margin”) its expected “peak demand.” Solar and wind cannot provide this reliable power. But they can save reliable power fuel whenever and to whatever extent there is sunshine and wind.

Once we properly categorize solar and wind as fuel-saving devices, we can start to rationally think about the cost vs. benefit of using them.

It is beneficial to use solar and wind when

[fuel savings] > [intermittent infrastructure cost] (with high upfront financing cost) + [reliable infrastructure deterioration].

• [fuel savings]: The fuel savings of solar/wind is [fuel burn avoided] - [fuel inefficiency].

• [fuel burn avoided] is the total dollar value of natural gas (or other fuel) one avoids burning.

• [fuel inefficiency] is the fuel efficiency lost from rapidly cycling up and down natural gas and coal plants to accommodate solar, which loses fuel via fuel inefficiency, just as stop-and-go traffic does.

• [intermittent infrastructure cost] is the cost of solar panels and wind turbines plus the cost of long-distance, high-voltage transmission lines to bring faraway, erratic solar/wind to population centers, plus the cost of local distribution equipment (e.g., to put residential solar on the grid).

• (high upfront financing cost) is the added cost involved when you’re paying for fuel savings, which occur slowly over time, through a very large upfront payment for solar, wind, and batteries that must be financed at current interest rates.

• [reliable infrastructure deterioration] is the significant deterioration cost imposed on natural gas or coal infrastructure, which performs best when operated in a stable, steady way and deteriorates much more quickly when operated erratically to accommodate the intermittent nature of sunlight and wind. (In the same way your car’s fuel economy goes down in stop-and-go traffic.)

While solar and wind, as intermittent fuel-savers, provide a certain kind of value in saving fuel, it’s important to note that in the vast majority of cases so far the cost of those fuel savings has far, far exceeded the value of the savings—which is a big reason our cost of electricity (including the cost we pay in taxes/inflation for subsidies) is going up.

In practice, solar/wind’s fuel savings are almost always dwarfed by their huge infrastructure costs—which, along with restrictions on fossil fuels, have increased prices

If you ask state-of-the-art AIs (e.g., Gemini 3 Pro Deep Think29, ChatGPT 5.2 Pro30, Grok 4 Heavy31), they will have trouble finding cases in the US where solar or wind has made economic sense. (The best cases are where anti-fossil-fuel policies have artificially inflated natural gas costs, which is an argument against those policies.)

Let’s pause on this: even though solar and wind theoretically have value as intermittent fuel-savers, the hundreds of billions spent on them in the US so far have mostly amounted to burning other people’s money and have created no economic value whatsoever. Think about that when you see a chart celebrating rising solar “generation” or “output,” i.e., fuel savings.32

Note that many leading opponents of fossil fuels know that solar/wind are not reliable power sources but intermittent fuel-savers—they just believe that, for “climate” reasons, it’s valuable to spend a lot of money saving fuel since in doing so you reduce emissions from the fuel. That’s an intellectually coherent view, but it’s not honest to pretend their goal is to lower costs and that their policies haven’t raised costs.33

If we recognize that almost the entire solar/wind infrastructure and reliable capacity deterioration costs have not been remotely offset by fuel savings and have amounted to just burning money (often in the form of subsidies) we start to see why electricity prices have gone up when declining prices of natural gas—the grid’s number one fuel source—should have driven them down.34

The other big reason electricity prices have gone up is that, in large part due to “solar and wind can replace fossil fuels” propaganda, the government has destroyed, disallowed, and discouraged fossil fuel power, massively driving up the cost of reliable power.

Reliable power shortages forced grids to operate close to their limits during Storm Fern, which increased wholesale electricity prices and will lead to significantly higher electricity bills for tens of millions of households in the near future. Lack of gas pipelines means that in a country with endless natural gas we’ll have regions like New England with sky-high gas bills.35

Bottom line: solar and wind “power” have not at all replaced fossil fuel power, but they have made power more expensive. And the idea that solar and wind are replacements, and thus that it’s costless to punish reliable fossil fuel power, has made power more expensive to an even greater degree.36

All energy discussions, analyses, and policy-making must totally stop treating solar and wind as reliable power sources and instead treat them as intermittent fuel-savers

Solar and wind shouldn’t be referred to as “capacity” or even “power,” but rather as what they really are: at best, intermittent fuel-savers (that are usually a big waste of money).

Solar and wind must never be spoken of as replacements or alternatives to fossil fuels as long as their intermittency issues are not solved at their own expense. As Storm Fern demonstrated, they do not, and cannot, power our grids, and pretending that they can was a major factor in creating today’s reliable power shortage.

When you see a country’s amount or percentage of solar/wind “generation” going up quickly—know that the same amount of reliable power capacity is needed, you’re just seeing a decrease in fuel use.37

When you see a country’s amount or percentage of solar/wind “capacity” going up—know that it’s not real, reliable, on-demand capacity, it’s the peak momentary fuel savings possible for a weather-determined device.38

When you see a day in which a large percentage of a state or country’s electricity is labeled “solar” or “wind”—know that the same amount of reliable, on-demand power plant capacity is needed, you’re just seeing a decrease in fuel use that day.39

When you see the cost of solar and/or wind power is shown on a chart as lower than the cost of fossil fuels or nuclear power—know that you’re seeing an accounting fraud, because the cost of an intermittent fuel-saving device is paid on top of the cost of an on-demand power source, not instead of it.40

When you see that a new solar and wind project is said to “power” some large number of homes or factories or data centers—know that the solar and wind are “powering” nothing by themselves, since they are entirely dependent on on-demand power sources. Better to think of them as “coalar” (coal+solar) or “golar” (gas+solar) or “cwind” (coal + wind) or “gwind” (gas + wind).41

When you see that solar/wind power on a certain percentage of the Earth’s surface is said to be sufficient to power the world many times over—know that this is nonsense because the power is not on-demand and we need on-demand power.42

When you see that companies claim to be “powered by 100% renewable energy,” know that they are actually powered by reliable, on-demand power sources, but they are using accounting fraud to take credit for the intermittent fuel savings of others.43

To my economist friends and grid operators: start doing solar/wind cost analysis in terms of whether they are a cost-effective or cost-ineffective fuel-saving measure. That’ll lead to good decisions. Nothing good comes from pretending that solar and wind are real, reliable power sources.

The practice of intermittent fuel-savers siphoning away operating revenue from the reliable plants they are parasitic on must end. The grid needs to recognize that solar/wind have zero capacity value and thus those selling solar/wind generation should justly only get paid for the value of the fuel savings they provide. In a future piece, I will suggest some specific ways to put this truth into practice, but the first step is recognizing it.

I hope that this piece starts to bring an end to the rampant and ruinous dishonesty involved in pretending that solar and wind are rapidly and cheaply replacing fossil fuel power when they are, in fact, intermittent and usually economically wasteful fuel-savers. Only by starting with the truth can we make electricity cheap and reliable again.

Itamar Feldman, Daniil Gorbatenko, Steffen Henne, and Michelle Hung contributed to this piece.

Share

Questions about this article? Ask AlexAI, my chatbot for energy and climate answers:

Try AlexAI for free

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

Despite the House’s passage of the promising SPEED Act and PERMIT Act late last year, permitting reform is now stalled in the Senate after Democrats suspended negotiations in response to the Trump administration’s stop-work order for five offshore wind projects (which have since been overturned).

While it’s understandable that Democrat Senators are upset about the executive’s open-ended authority to overturn permits, this ultimately means these Senators should be that much more motivated to pass aggressive, tech-neutral permitting reform—including permitting certainty.

The best way forward for permitting is for Senate Republicans to agree to stronger permitting certainty in exchange for Senate Democrats supporting comprehensive, tech-neutral permitting reform—which benefits every type of project, with no subsidies for solar/wind transmission.

Here’s a roadmap for how Republicans and Democrats can still come together to pass comprehensive, tech-neutral reform.

Summary

Congress can still enact meaningful permitting reform if Senate Republicans agree to stronger permitting certainty for approved projects in exchange for Senate Democrats supporting comprehensive, tech-neutral reform—starting with the House-passed SPEED and PERMIT Acts.

1. America’s future depends on Congress passing meaningful permitting reform
   
   Meaningful permitting reform is an absolute requirement for America’s future prosperity, competitiveness, and security...yet there is a big risk Congress will fail to pass it.

2. Meaningful reform needs to be tech-neutral and comprehensive
   
   Meaningful permitting reform is challenging because it requires rejecting tech-favoritism in favor of tech-neutrality, and superficiality in favor of comprehensiveness.

3. The House-passed SPEED and PERMIT Acts are a strong start to meaningful permitting reform
   
   SPEED dramatically reduces delays from project-wrecking NEPA reviews. PERMIT stops states from abusing CWA to veto safe projects for political reasons.

4. Additional opportunities for tech-neutral, comprehensive reform
   
   The House can send the Senate an even more comprehensive permitting package by passing the ESA Amendments Act of 2025 and targeted Clean Air Act reforms.

5. Using “permitting certainty” to negotiate the best possible reforms
   
   Republicans should be willing to compromise with Democrats on “permitting certainty” (e.g., the FREEDOM Act) in exchange for other reforms, since permitting certainty is itself a pro-freedom reform.

6. Avoiding the danger of subsidizing wind/solar transmission
   
   Elected officials should not agree to any specific language on permitting electric transmission lines, which forces new costs on ratepayers, usually to subsidize wind and solar, unless it ensures the lowest possible cost of reliable electricity for ratepayers.

1: America’s future depends on Congress passing meaningful permitting reform

Meaningful permitting reform is an absolute requirement for America’s future prosperity, competitiveness, and security...yet there is a big risk Congress will fail to pass it

• One of the most important political questions in the next few months for American energy, our economy, and our security is: will Congress finally enact meaningful permitting reform?

• From natural gas plants to pipelines to nuclear power plants to electric transmission lines to battery factories to solar farms, every form of energy is crippled by America’s onerous and endless permitting process.

• It’s not just energy that our permitting system cripples. Railroads, highways, chip factories, seaports, landfills, and wildfire-prevention projects are routinely delayed or canceled by federal permitting. An estimated $1.1 to $1.5 trillion in total capital is tied up in federal permitting processes.1

• Both parties say they recognize the urgency of meaningful permitting reform. But there is extreme doubt about whether any permitting package will pass, let alone one that will actually shave years off projects and make America a great place to build again.

2: Meaningful reform needs to be tech-neutral and comprehensive

Meaningful permitting reform is challenging because it requires rejecting tech-favoritism in favor of tech-neutrality, and superficiality in favor of comprehensiveness

• In order to pass meaningful permitting reform, Republicans and Democrats need to overcome the two tendencies that prevented reform in the past and continue to threaten it right now: tech-favoritism and superficiality.

• Obstacle – Tech-favoritism: Many want easier permitting, but only for their preferred projects, and often with special favoritism on top of that—while they’re willing to burden non-preferred projects with onerous permitting. This prevents reform by creating endless fights about preferences and punishments.

• Certain Democrats are happy to make it difficult to permit oil and gas projects, such as power plants and refineries and pipelines, but they want fast permitting for wind and solar projects—and subsidies for wind, solar, and the new electric transmission lines they require. Certain Republicans are happy to make it difficult to permit wind and solar projects, but want fast permitting for oil and gas projects.

• Solution – Tech-neutrality: The only moral and practical approach to permitting reform is to make it technology-neutral. All technologies should be held to the same standards of permitting, whether safety or environmental quality. Those who (rightly) object to subsidized projects should cut the subsidies, not ruin permitting.

• Obstacle – Superficiality: Many want to do something about permitting, but end up doing something superficial because they fear controversy and demonization if they tackle the fundamental reforms needed to reform legislation such as the National Environmental Policy Act (NEPA) or the Clean Water Act.

• Solution – Comprehensiveness: Both parties need to declare that America’s permitting system is a disaster that requires deep, comprehensive changes to existing legislation, but that these changes can be made without reducing (and sometimes improving) environmental quality. E.g., NEPA hampers permitting of wildfire protection measures.

• So long as enough politicians are unwilling to overcome tech favoritism and superficiality, our permitting system will be a disaster, and the future of our prosperity, competitiveness, and security will be in doubt as China and others build quickly while we continue to handicap ourselves with special interest policies.

3: The House-passed SPEED and PERMIT Acts are a strong start to meaningful permitting reform

The SPEED Act, which passed the House on December 18, 2025, dramatically reduces delays from project-wrecking NEPA reviews, above all by preventing their extension via frivolous litigation

• SPEED requires a reasonable, not unlimited, scope of review—saving months or years of useless paperwork for crucial projects like pipelines, LNG export terminals, and refineries. E.g., under NEPA’s traditional, unlimited scope of review, the Uinta Basin oil rail line required a 3600-page environmental review even though it was only 88 miles!2

• SPEED avoids duplicative reviews—saving months or years of unnecessary reviews for projects, such as pipelines and highways, that have already been reviewed for NEPA or by states. E.g., currently, a project that already spent years completing environmental analysis for California law must repeat essentially the same analysis for NEPA.3

• SPEED reduces the number of frivolous lawsuits—avoiding hundreds of politically driven lawsuits per year for major projects like pipelines and electric transmission lines over paperwork issues. E.g., under NEPA’s current litigation regime, the Mountain Valley Pipeline was sued again and again over alleged paperwork issues in its NEPA review.4

• SPEED reduces the delaying power of lawsuits—saving years of unnecessary delays and protecting hundreds of billions in capital expenditures for pipelines, power lines, roads, and mines. E.g., under NEPA’s current litigation regime, Mountain Valley took 10 years from proposal to completion since it stopped for years at a time during lawsuits.5

• SPEED protects and even improves environmental quality. The SPEED Act doesn’t change the substance of environmental law, but it does allow environmental improvement to happen more quickly. E.g., today’s onerous NEPA reviews are often used to stop wildfire countermeasures such as controlled burns or brush-clearing.6

• Myth: The technology-neutral SPEED Act will benefit heavily subsidized projects (e.g., wind and solar) more than it will benefit cost-effective projects (e.g., oil and gas).
  
  Truth: It will benefit cost-effective projects—e.g., offshore oil and gas, pipelines, mining—much more since many subsidies are disappearing soon, and since SPEED doesn’t change the government’s authorities against actually unlawful projects.

• The SPEED Act is co-sponsored by Rep. Bruce Westerman (R-AR-4) and Rep. Jared Golden (D-ME-2).

The PERMIT Act, which passed the House on December 11, 2025, stops states from abusing the Clean Water Act (CWA) to veto safe projects for political reasons, and sets clear water emissions standards that give projects certainty

• PERMIT removes states’ power to veto projects for political reasons—avoiding unjust, late-stage cancellations of major projects like pipelines, hydro dams, and LNG terminals. E.g., using states’ current veto power, Oregon denied the certification for the Jordan Cove LNG export terminal even though it passed all federal safety standards.7

• PERMIT will unlock natural gas pipelines needed to lower costs and meet AI demand. E.g., the Constitution pipeline, transporting much-needed gas from PA to NY, has been sabotaged by New York state, which demanded more and more additional information for what should have been routine stream crossings under a §404 permit.8

• PERMIT removes the EPA’s power to veto projects for political reasons—avoiding rare but highly destructive early- and late-stage cancellations of major energy, mining, and infrastructure projects. E.g., under EPA’s current sweeping veto authority, EPA preemptively denied a key §404 permit for the Pebble Mine project in Alaska in 2023.9

• PERMIT requires water-quality-based permitting requirements to be clear, achievable, and predictable—making it easier for power plants, mines, and chemical factories to comply with their permits. E.g., under today’s standards, agencies can deny permits for alleged water “degradation” without ever giving projects discharge limits to design around.

• PERMIT helps ensure pollution controls are realistically achievable, not just technologically possible—providing certainty for long-term investments in industries like energy production, manufacturing, and municipal water systems. E.g., under today’s rules, regulators can require power plants to eliminate trace pollutants to near-zero levels using treatment systems that are still experimental.

• The PERMIT Act is co-sponsored by Rep. Mike Collins (R-GA-10) and Rep. Sam Graves (R-MO-6).

5: Additional opportunities for comprehensive reform

Congress can get permitting reform done by starting with SPEED and PERMIT and negotiating for even more comprehensive reform, while still rejecting tech-favoritism

• Advocates of all forms of energy support tech-neutral, comprehensive permitting reform. For example, the SPEED Act is supported by trade associations from the oil-and-gas-focused American Petroleum Institute to the solar-and-wind-focused American Council on Renewable Energy.10

• The SPEED Act’s fixes of NEPA benefit all forms of energy and infrastructure
  —from current Republican focuses (e.g., oil and gas pipelines) to current Democrat focuses (e.g., electric transmission lines) to substantially bipartisan focuses (e.g., nuclear plants, mines, and roads).

• The PERMIT Act’s fixes of the Clean Water Act benefit all forms of energy and infrastructure—e.g., not just oil and gas (currently more of a Republican focus), but also electric transmission infrastructure (currently more of a Democrat focus).

• Therefore, no major “concessions” should be needed to satisfy Democrats or Republicans—only improvements to tech-neutral permitting.

The ESA Amendments Act of 2025, which is awaiting a House floor vote, is a common-sense reform of the Endangered Species Act that meaningfully reduces irrational restrictions on all types of energy and industrial development

• The ESA Amendments Act11 requires evidence-based, not speculative, “threatened” species listings—ending restrictions on development for the sake of species that are not actually at risk. E.g., under today’s standards, major restrictions on Alaskan oil and gas development were triggered when the polar bear was listed as “threatened” in 2008, despite having a stable population, based on far-off climate projections.

• The ESA Amendments Act requires a common-sense definition of “habitat”
  —ending restrictions on development for the sake of species that don’t depend on the area for their sustenance. E.g., under today’s nonsensical definition, FWS designated 1,544 acres of Louisiana timberland as “critical habitat” for the dusky gopher frog, even though the frog had not been there since 1965.

• The ESA Amendments Act stops “endangered” species restrictions from being automatically extended to “threatened” species—ending the most severe development restrictions for the sake of species that are not at risk of extinction. E.g., in 2014 the lesser prairie chicken being listed as “threatened” triggered major energy and industrial restrictions on millions of acres of private land in the Great Plains.

• The ESA Amendments Act excludes ESA “incidental take” permits from NEPA review, saving months of unnecessary delay for a wide variety of projects. E.g., today, solar and wind projects must complete NEPA reviews on top of other environmental reviews just to obtain “incidental take” permits for unintentional impacts on birds and bats.

• The ESA Amendments Act of 2025 is sponsored by Rep. Bruce Westerman (R-AR-4).

A suite of proposed Clean Air Act reforms, which are awaiting votes in the House or the Senate, meaningfully streamline permitting for power plants and industrial facilities

• The CLEAR Act (H.R. 4218)12 requires air standards to be based on attainability and economic feasibility, and extends the air standards review cycle to 10 years. This bill is sponsored by Rep. Buddy Carter (R-GA-1).

• The FENCES Act (H.R. 6409)13 prevents areas from failing air standard requirements due to emissions coming from outside the US. This bill is sponsored by Rep. August Pfluger (R-TX-11).

• The FIRE Act (H.R. 6387)14 prevents states from being penalized for pollution caused by wildfire-prevention work. This bill is sponsored by Rep. Gabe Evans (R-CO-8).

• The Fair Enforcement Act (S. 3049)15 prevents anti-development activists from abusing CAA to block crucial projects through “citizen suits.” This bill is sponsored by Sen. Mike Lee (R-UT).

• The Clean Air and Building Infrastructure Improvement Act (H.R. 4214)16 requires EPA to publish clear rules to accompany any new air quality standard. This bill is sponsored by Rep. Rick Allen (R-GA-12).

• The Air Permitting Improvements to Protect National Security Act (H.R. 6373)17 prevents CAA from blocking projects critical to national security, including semiconductor manufacturing funded under the CHIPS Act. This bill is sponsored by Rep. Gary Palmer (R-AL-6).

The FAIR Act, which has been introduced in the House, is a positive, tech-neutral reform of transmission permitting

• The FAIR Act (H. R. 6336)18 stops states from being forced to pay for interstate power lines built to serve other states’ “renewable” energy policies. This bill is sponsored by Rep. Julie Fedorchak (R-ND).

6: Using “permitting certainty” to negotiate the best possible reforms

Senate Republicans should be willing to compromise with Senate Democrats on “permitting certainty” (e.g., the FREEDOM Act) in exchange for other permitting reforms since “permitting certainty” is itself a pro-freedom reform

• Many Democrats in the House and Senate have said that a major priority of theirs is more “permitting certainty” for already approved projects. Pro-freedom Republicans should see this as a huge opportunity, since it amounts to Democrats offering to adopt additional pro-freedom reforms in exchange for pro-freedom reforms.

• “Permitting certainty” should be a bipartisan priority, and would have prevented many of the Biden-era abuses against fossil fuel and mining projects. For example, in 2021 the Biden Administration retroactively suspended the oil and gas leases previously granted in the Alaska National Wildlife Refuge. In 2022 it canceled leases for the Twin Metals project in Minnesota.

• The genesis of the permitting certainty opportunity is the House Freedom Caucus’s push for wind/solar subsidy cuts during reconciliation. That push led to both more cuts than would have otherwise happened—and, because the cuts were incomplete, an agreement by the admin to use its permitting authority to fight against subsidized projects.

• The Trump administration pulling permits from wind/solar projects woke up Democrat supporters of those projects to the problems with today’s easy-to-delay-and-oppose permit system—which Republicans were acutely aware of when Biden used them to oppose natural gas and mining projects.

• Republicans should eagerly agree to some form of permitting certainty in exchange for passing the SPEED and PERMIT Acts, as well as other reforms to fix permitting under the Clean Air Act (today a major obstacle to electricity growth) or the Endangered Species Act (today a major obstacle to potentially any project).

• The bipartisan FREEDOM Act (H.R. 7329)19, which significantly limits permit delays and revocations at each stage of the permitting process, is a great option for permitting certainty reform. This bill is led by Rep. Josh Harder (D-CA), and co-sponsored by Rep. Michael Lawler (R-NY), Rep. Don Bacon (R-NY), Rep. Chuck Edwards (R-NC), Rep. Adam Gray (D-CA), and Rep. Kristen McDonald Rivet (D-MI).

• Myth: Opponents of subsidies should support unpredictable and lengthy permitting for subsidized projects.
  
  Truth: Subsidized wind and solar projects should be reduced by opposing subsidies, not by permitting punishments, and the recent OBBB cuts will rightly stop many subsidized projects—including offshore wind, which is uneconomic without subsidies.

7: Avoiding the danger of subsidizing wind/solar-favoring transmission

Elected officials should be extremely wary of new language facilitating the permitting of electric transmission line building by electric monopolies, since this forces costs on ratepayers and is easily abused by monopolies and wind/solar developers

• Behind the legitimate demand for permitting certainty, the number one negotiating demand by many Democrats and some Republicans is “permitting reform” that is specifically focused on electric transmission. This sounds innocuous but if not handled correctly is an absolute subsidy disaster for our economy and grid.

• Easing transmission permitting is dangerous because ratepayers are forced to pay for it. With most forms of permitting, we simply want the government to make it easier to do safely, because the project operator is a private company who takes full responsibility for the cost and cannot force consumers to pay for their mistakes. With transmission permitting, permitting lines are part of the electric monopoly system that forces its costs on consumers.

• Powerful companies are incentivized to overbuild transmission. Transmission permitting is particularly dangerous to unleash without oversight because two forms of powerful companies are heavily incentivized to do it or advocate for it unnecessarily and inefficiently: monopoly utilities and wind/solar developers.

• Monopolies get a guaranteed profit for building transmission in proportion to the cost of building transmission. Wind/solar developers can collect far more subsidies, because new transmission allows them to link wind and solar farms to demand centers that are usually far away from them and they can socialize the costs of excessive transmission buildouts throughout the local grid system.

• Long-distance transmission-building doesn’t usually make sense, because—absent bad regulations—the cheapest way to build reliable power is usually to do so with local, reliable power plants. Building transmission does not make economic sense to connect unreliable, faraway wind/solar supply to demand centers, since this “cheaper” unreliable power is more expensive when you add up the full system costs of ensuring reliability.

• The vast majority of the transmission proposals thus far amount to large subsidies for wind and solar developers and thus should be rejected in tech-neutral permitting reform. This includes the last Senate’s (not passed) Energy Permitting Reform Act of 2024 (S.4753)20 and the various Democrat proposals on the table.

• If the transmission-subsidizing proposals pass, they’ll make our electricity price problems much worse. Note that one of the top two contributors to rising electricity prices over the past two decades has been rising transmission costs21—which thanks to bad policy occurred even when demand was flat and objective new transmission needs were modest.

Transmission-specific language is legitimate and positive if it optimizes for the lowest price of reliable power to consumers, not wind/solar-favoring criteria such as unreliable “wholesale” cost or “congestion relief”

• Tech-neutral reforms already include transmission, so there is no imperative to include transmission-specific legislation. E.g., the SPEED Act helps transmission projects, which are among the types of projects most affected by NEPA litigation.22

• Transmission language should not be off the table in permitting reform, since today’s legislation is far from perfect. But the language needs to be worded very carefully to ensure that as much as possible it leads to cost-effective transmission that is paid for by the right people and entities.

• Transmission does make sense when there is a somewhat distant source of reliable power that is considerably cheaper and/or more plentiful than local power. Sometimes transmission makes sense due to political reasons, usually irrational, that prevent low-cost and plentiful local power that could otherwise exist. (In this case the preferable solution is to fix the bad policies.)

• Transmission permitting should have strict criteria to ensure it optimizes for lowest cost and sufficient availability of reliable electricity for ratepayers. It’s important that the cost and availability analysis be done for ratepayers because then that factors in the full system cost of any decision.

• Transmission permitting must reject popular criteria that favor transmission to accommodate unreliable wind/solar, such as “wholesale cost” (which measures the cost of unreliable wind/solar electricity vs. the full cost of making it reliable for ratepayers) or “congestion relief” (code for: wind/solar developers want their erratic, spiky power to be absorbed however unnecessary and faraway).

• Transmission permitting must have fair cost allocation, so the consumers who actually benefit from new transmission through lower retail electricity bills and/or great availability should pay for it. Fortunately, the House has an excellent bill for this already: Julie Fedorchak’s FAIR Act.23

Conclusion: Republicans and Democrats should converge on permitting reform that is tech-neutral, as comprehensive as possible, and only adds language on electric transmission if it is carefully tailored to actually lower cost instead of enriching monopolies and subsidy-seekers at taxpayer and ratepayer expense

Michelle Hung, Steffen Henne, and Daniil Gorbatenko contributed to this piece.

Share

Questions about this article? Ask AlexAI, my chatbot for energy and climate answers:

Try AlexAI for free

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

Yet NM lawmakers are considering a “net-zero by 2050” mandate that would shut down the industry.

The “Clear Horizons Act” would demolish New Mexico’s oil industry

• The “Clear Horizons Act” requires New Mexico to dramatically reduce its GHG emissions: to 45% below 2005 levels by 2030, 75% below 2005 levels by 2040, and “net zero” by 20501.
  
  If this is passed it will require large parts of the New Mexico oil industry to shut down.

• NM has already cut GHG emissions by >21% from 2005 levels2—at significant cost.
  
  E.g., NM recently shut down a 847 MW coal plant that supplied 12-15% of NM electricity3. Now prices are expected to rise because the utility is trying to replace it with wind/solar + expensive storage4.

• “Clear Horizons” would require NM oil operators to eliminate emissions from their production via electrification. This accomplishes virtually nothing emissions-wise since most of oil’s emissions are from burning it.
  
  But it has the enormous cost of shutting down oil production.

• Electrifying NM oil production would involve a >3X increase in the region’s electricity demand5 and require far more fossil fuel electricity.
  
  This is totally unrealistic given that NM has mandated “net zero” electricity and made it very hard to build and connect new power plants.

• Myth: NM oil operators can meet “Clear Horizons” emissions standards by capturing their CO2.
  
  Truth: No they can’t, because carbon capture is extremely expensive as well as scarce.6

• Myth: NM oil operators can meet “Clear Horizons” emissions standards by purchasing GHG offsets.
  
  Truth: No they can’t, because these GHG offsets are required to be from NM sources7, and there aren’t enough to go around near-term.

• Why should we care if the New Mexico industry can’t comply with the “Clear Horizons Act” and has to shut down production?
  
  Because this harms not only the entire state of New Mexico but also the entire US through its outsized effect on US oil production.

Sabotaging NM oil is destructive for US oil production

• At 15% of US production, New Mexico is the #2 oil producing state behind Texas—but its production is growing far more quickly than Texas’s.
  
  New Mexico’s oil production rose by 119% from 2019 to 2024, while Texas’s rose by only 11%.8

  

• Incredibly, New Mexico now produces more oil than Mexico and over 2X more oil than Venezuela. If New Mexico were a country, it would be the 11th biggest global oil producer.9

• New Mexico has driven much of the US oil production growth in recent years. Two counties in NM accounted for 52% of the increase in US oil production between 2020 and 2024.10

• American oil is an enormously important industry that keeps us secure and keeps gasoline prices low. And the New Mexico oil industry is a critical part of it.
  
  The “Clear Horizons Act’s” attack on NM oil is an attack on American energy dominance and American energy security.

Sabotaging NM oil is destructive for the state of New Mexico

• While the sabotage of New Mexico oil by the “Clear Horizons Act” harms all of America, it is particularly destructive for the state of New Mexico, whose economy and therefore whose people would be in infinitely worse shape without its prolific oil industry.

• Oil and gas tax revenue pays for >1/3 of New Mexico’s budget11. This means many NM government services—such as education, childcare, health services, roads, etc—are heavily dependent on oil and gas.

• New Mexico’s oil and gas jobs are highly productive as well as high-paying. NM oil and gas extraction jobs pay >2x the average NM wage, and oilfield services jobs pay ~1.5x the average NM wage.12

• In addition to sabotaging the NM oil industry the “Clear Horizons Act” threatens any large project that uses a significant amount of fossil fuels or requires a significant amount of reliable, fossil fuel electricity. E.g., data centers.

• Consider Project Jupiter, the new data center campus in Doña Ana County that is set to bring 100s of billions in investment and 1000s of high-paying jobs to NM13.
  
  There’s little chance this project would survive under “Clear Horizons” given its need for reliable natural gas power.

  

• Consider New Era’s new huge 7GW data center project in Lea County, New Mexico. This project will be effectively banned under the “Clear Horizons Act,” given that it will require at least 2GW of reliable natural gas power to operate.14

  

• By requiring costly emissions reductions across the NM economy, the “Clear Horizons Act” is guaranteed to raise the cost of living in NM.
  
  The people of New Mexico (which has a median household income of $64,140, the fourth lowest in the country) cannot afford that.15

• Myth: The “Clear Horizons Act” makes New Mexicans more resilient to climate danger.
  
  Truth: New Mexico cannot affect climate conditions no matter how much it reduces its GHG emissions. “Clear Horizons” only makes New Mexicans poorer and therefore less resilient to climate danger.

• Myth: New Mexico’s recent “climate” policies have shown that NM can “achieve economic growth and reduce pollution at the same time.”
  
  Truth: NM’s economic growth has been in spite of not because of these policies, which ban some economic activity and make the rest more expensive!

The New Mexican government needs to unleash New Mexican oil, starting by rejecting the “Clear Horizons Act”

• NM oil is already being sabotaged by some of the strictest anti-oil policies in the country—e.g., requiring operators to capture much of their methane emissions, requiring “net-zero” electricity by 2045.
  
  But the “Clear Horizons Act” would be the most destructive policy to date.

• New Mexico should recognize that oil is essential to New Mexico’s prosperity, and unleash it by repealing the existing anti-oil policies (e.g., “Methane Waste Rule,” “Energy Transition Act”).
  
  But first New Mexico must reject the “Clear Horizons Act.”

• Citizens and lawmakers of New Mexico, please don’t sabotage your energy future—or we will all pay the price.
  
  Tell New Mexico Senators and Representatives to unleash New Mexican oil, starting by voting NO on the “Clear Horizons Act.”

Michelle Hung and Daniil Gorbatenko contributed to this piece.

Share

Questions about this article? Ask AlexAI, my chatbot for energy and climate answers:

Try AlexAI for free

Popular links

• EnergyTalkingPoints.com: Hundreds of concise, powerful, well-referenced talking points on energy, environmental, and climate issues.

• My new book Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas—Not Less.

• Speaking and media inquiries

“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.