By NEWTON B. JONES
International President, Boilermakers
One would think that even the most fanatical “green” energy advocates would be ecstatic about the $740 billion Inflation Reduction Act (IRA) signed into law by President Biden Aug. 16.
After all, half of that enormous sum – $369 billion – is targeted to fighting climate change. Wisely, those billions will support a portfolio of emissions-lowering technologies – renewables, electric vehicles, hydrogen fuel, nuclear, and fossil fuels with carbon capture, use and storage and direct air capture.
This broad, inclusive approach to slashing carbon emissions makes sense. Every option that contributes to combatting global warming should be employed where feasible.
But here’s the rub for climate zealots: The “leave-it-in-the-ground” crowd abhors fossil fuels. They viscerally hate them. They refuse to accept the reality that oil, gas and coal make modern life possible.
And they refuse to accept the obvious limitations of weather-dependent wind and solar energy, fervently holding on to the misguided belief that an all-renewable future is workable.
DELUSIONAL AND DANGEROUS
Their position is delusional and dangerous. Excluding or restricting fossil-based natural resources carries serious risks to economies and people.
Evidence of fossil fuel dependency abounds. In Europe, where energy prices have spiraled out of control, governments are warning of severe natural gas shortages that could leave their citizens unable to obtain or afford heating fuel for their homes. Certainly, Russia’s war on Ukraine has worsened Europe’s energy situation, but years of anti-fossil fuel and anti-nuclear policies were already driving up energy costs.
Germany, long an industrial and manufacturing powerhouse, has backed itself into a corner by abandoning virtually all of its coal-fired and nuclear energy plants and investing half a trillion euros in a failed “green” energy revolution. Today, German citizens fear they will not have enough energy, primarily gas, to heat homes or power industry as winter approaches.
In Sri Lanka, the government’s ban on fossil-based fertilizers has led to extreme food shortages and runaway inflation as crop yields have dramatically fallen. (Synthetic, nitrogen-based fertilizers derived from natural gas today help feed about half the global population.)
Across many U.S. states, especially in the West, heat waves have led to warnings of rolling blackouts as a result, at least in part, of policies that favor intermittent wind and solar installations over more reliable baseload fossil and nuclear energy plants.
Recently, to deal with soaring energy use due to the extreme heat, California Gov. Gavin Newsome asked residents of that state to raise their thermostats to 78 and avoid plugging in electric vehicles between 4 p.m. and 9 p.m., along with other lifestyle changes.
It is an unpleasant irony that in a state that has banned the sale of new gasoline-powered vehicles by 2035, leaders are urging people to cut back on charging their EVs. If there is insufficient electricity now, imagine the shortfall in the future when California mandates that all vehicles be electric and another 30 million-plus EVs are plugged into the electric grid.
WE CANNOT ABRUPTLY STOP
Things will only get worse for humanity if the premature shift away from fossil fuels and nuclear power continues. We are already seeing a reversal of policies as some governments, particularly in Europe, try to salvage the few baseload coal and nuclear plants still remaining. In Great Britain, incoming Prime Minister Liz Truss promptly canceled that government’s ban on fracking.
All of this points to what should be an apparent, if uncomfortable (for some) truth: We cannot abruptly stop using fossil fuels and nuclear energy without destroying economies and harming people. On its face, the Inflation Reduction Act recognizes this fact – even if the environmental extremist crowd does not.
Key provisions of the law dramatically enhance and expand tax credits to incentivize the deployment of emissions-reducing technologies.
Especially important to Boilermakers are improvements to the federal 45Q tax credit program supporting CCUS. The act raises credits for capturing and permanently sequestering carbon dioxide from $50 per metric ton to $85 and, for using captured CO2 for enhanced oil recovery, from $35 per metric ton to $60. These changes are designed to make CCUS more attractive and spur greater investment across energy and industrial processing sectors.
Importantly, for entities to receive the full tax credits, they must comply with prevailing wage and apprenticeship provisions. That means a more level playing field for union members and better wages for all workers on these projects.
In addition, the act includes domestic sourcing requirements for materials and products, supporting North American economies and jobs.
The Inflation Reduction Act promises to be a green light for the U.S. to scale up and advance multiple clean energy technologies.
Climate zealots have voiced their disappointment that fossil fuels get a boost under the act. But wiser heads understand that promoting all emissions-reducing options is the best path forward.