×
Ad - Enertia Software: Click To Learn Enertia
Ad - Tetra: The Word Is Out
Ad - Jacam Catalyst: Largest Production Chemical Company in the Permian Basin
Royal Guard
January 2024 Exclusive Story

Report Highlights Downsides of Britain’s Hasty Push For Net-Zero

CHICAGO—Germany’s tumultuous experience with governmentally-directed efforts to transition away from traditional energy sources may be a frequently-cited example of the risks and costs associated with such pursuits, but it is far from the only one. A new RealClear Foundation analysis points to the United Kingdom as another case study on the perils of top-down energy mandates.

Whether the scenarios play out in Central Europe or the British Isles, The Folly of Climate Leadership: Net-Zero and Britain’s Disastrous Energy Policies argues they contradict claims from American policymakers and “green” energy advocates who downplay or deny the trade-offs associated with forcing the United States off fossil fuels. The data in the 76-page December 2023 report Rupert Darwall authored for the RealClear Foundation seems to reinforce warnings that governmentally-imposed net-zero greenhouse gas emissions requirements correlate with opaque public policy, insecure energy supplies and spiking consumer prices.

“Net zero was sold to Parliament and the British people on claims that wind-power costs were low and falling,” Darwall writes in an op-ed accompanying the report. “This was untrue: wind-power costs are high and have been rising. In the net-zero version of ‘crypto will make you rich,’ official analyses produced by the Treasury and the Office for Budget Responsibility rely on the falsehood that wind power is cheap, that net zero would have minimal costs, and that it could boost productivity and economic growth. None of these has any basis in reality.”

Britain’s experience is a cautionary tale for America, Darwell adds. “The physics and economics of wind power are not magically transformed when they cross the Atlantic,” he observes. “Whenever a politician or wind lobbyist touts wind as low-cost or says net zero will boost growth, they become accessories to the wind power scam. The data leads ineluctably to a decisive conclusion: Net zero is anti-growth. It is a formula for prolonged economic stagnation.”

In a piece on RealClearEnergy.org, Rick Whitbeck of Power the Future highlights Darwall’s report and says it should prompt Americans to think twice about emulating their allies across the Atlantic.

“The same arguments that have crippled Britain’s economy are now being used by the Biden Administration here at home, with zealots in cabinet-level positions—including Energy Secretary Jennifer Granholm, Interior Secretary Deb Haaland and EPA Director Michael Regan—pushing the message from their bully pulpits,” Whitbeck writes.

Noting that wind and solar need to be backed by more reliable power sources, he argues that a Net Zero mandate would be disastrous for American consumers. Meanwhile, Whitbeck adds, public policies that artificially inflate the costs of traditional energy leave consumers with no place to hide from higher prices.

“The differences between British energy costs and those here in the United States are staggering,” he says. “Britons paid an average of $228 per megawatt hour for electricity generated from coal in 2022, whereas Americans paid an average of $27 per MWh. For natural gas, 2022 saw Britons paying $251 per MWh, versus American consumers averaging $61 per MWh for their power.”

No Free Lunch

“Renewable energy is not a low-cost substitute for fossil fuels,” writes American attorney, author and businessman Andrew Puzder in the report’s forward. “Renewables are not cheap, nor can they provide the reliability that modern societies expect and on which they depend. This report convincingly demonstrates how Britain was conned into net zero by deceptive and illusory promises of cheap wind power. The bursting of the wind-power bubble this summer came too late for Britain. It has come just in time to save America from making a similar calamitous error.”

The report’s overview opens by noting that the U.K.’s economic torpor has continued unabated since the 2008 financial crisis. Darwall points out that this economic lethargy correlates with the country’s embrace of alternative energy.

“(In 2008), Britain’s political elite decided to turn Britain into a test bed for radical climate policies when Parliament wrote an 80% decarbonization target into law,” he recounts. “The Climate Change Act was presented as Britain showing climate leadership ahead of the 2009 Copenhagen climate conference, one of many U.N. climate conferences that was going to save the planet. In 2019, the target was raised to the elimination of 100% of net emissions by 2050 and became law after an 88-minute debate in the House of Commons.”

According to the study, net-zero advocates persuaded British politicians that renewable energy’s costs were plummeting, which harmonized with the country’s own pollyannish projections and buttressed claims that a mandated energy transition would boost British economic output.

“The narrative of a dramatic and sustained fall in the costs of renewable energy also underpinned governmental analyses of the economic consequences of net zero that promoted the fiction that the cost of net zero is trivial and could even act as fairy dust boosting Britain’s abysmal lack of productivity growth,” Darwall writes. “Thus, Britain’s decision to adopt net zero was based on false claims about the cost of offshore wind and wishful—indeed, nonsensical—optimism about the economic consequences of net zero.”

He recounts comments by then-Prime Minister Boris Johnson at a virtual UN climate summit in 2020 in which Johnson suggested the UK could become the Saudi Arabia of wind power. Such a claim is delusional, Darwall asserts, as it involves replacing “production of a commodity that yields more government revenues than any other with one that, as the International Energy Agency’s May 2021 Net Zero by 2050 Pathway shows, requires more inputs of labor, capital and land to produce less energy. Net zero therefore constitutes an antigrowth economic strategy that near-zero-growth Britain can ill afford.

“This, then, is a story of a massive deception practiced by Britain’s governing class, leading to the biggest resource misallocation in British history—done in the name of saving a planet, which the vast majority of its inhabitants has no intention of emulating,” he states.

Unfortunately, Darwall continues, the Biden administration in April 2021 followed the U.K.’s imprudent example and set the goal of completely decarbonizing U.S. electricity generation by 2035 and having the entire U.S. economy achieve net zero by 2050. “Britain offers a preview of what aggressive decarbonization would look like if President Biden succeeds in doing by regulation what even a Democratic Congress refused to pass between 2021 and 2023,” he assesses.

“As in Britain, the Biden administration is spinning claims of ever-falling renewable energy costs,” he adds. “While specific climate policies and institutional arrangements differ among countries, how generating technologies—thermal (coal and natural gas–fired power stations), nuclear, and renewable (wind and solar)—interact is common across markets, as they reflect the physics and economics of each technology. At least, America has the example of Britain’s disastrous energy policies and looking before it leaps.”

Report Structure

The Folly of Climate Leadership: Net Zero and Britain’s Disastrous Energy Policies is divided into six parts:

  • Part I places Britain’s claim to climate leadership in context and tracks how accelerating reductions in carbon dioxide emissions have been accompanied by unprecedentedly weak economic growth.
  • Part II offers a critical examination of the evolution of energy policy since 2015 and demonstrates how politicians and civil servants were willingly duped by climate-lobby claims of low wind costs; it contrasts these claims with actual offshore wind cost data and goes on to examine the flawed assessments of the economic consequences of net zero by the Treasury and the Office for Budget Responsibility. It ends with a brief analysis of public opinion, which broadly—albeit weakly—accepts Britain’s net-zero policy consensus.
  • Part III comments on Britain powering past coal, which the report says worsened the 2022 energy crisis by raising costs and sacrificing coal as the best hedge against threats to energy security.
  • Part IV provides an overview of the U.K.’s electricity sector.
  • Part V takes a deep dive into Britain’s “Big Six” energy companies’ segmental data, which Darwall says illustrates the importance of data transparency.
  • Part VI offers some concluding thoughts on the antidemocratic gambit of legislating a net zero target, with the aim of putting net zero beyond politics. It makes two policy recommendations: de-legislating net zero; and opening the books on all publicly supported renewable energy projects as a necessary condition to having a properly informed debate on energy policy.

For details, see the report.

For other great articles about exploration, drilling, completions and production, subscribe to The American Oil & Gas Reporter and bookmark www.aogr.com.