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  • Offset Cap & Trade Compacts with a Reliable Energy Compact

Offset Cap & Trade Compacts with a Reliable Energy Compact

William L. Kovacs

March 2023

Offset Cap & Trade Compacts with a Reliable Energy Compact

The green climate zealots have successfully formed two interstate Compacts consisting of twelve states to address the climate change issue through a cap-and-trade system. While many conservatives believe these compacts are shining examples of state overreach, excessive regulation, and wasteful subsidies, these same conservatives are silent on solutions. Last week, the state of Utah enacted an energy security law that could serve as the foundation for a Reliable Energy Interstate Compact of States (“Reliable Energy Compact”).

Led by Representative Ken Ivory and Senator Derrin Owens H.B. 45, Utah’s Energy Security Law requires the state to ensure the reliable production and distribution of energy for its citizens by promoting the use of energy resources, including fossil fuels, generated within the state.

On the electricity delivery side, it requires a reliable energy system that can supply continuous electricity at the proper voltage, frequency, and resiliency to withstand sudden or unexpected disturbances. This provision is a brilliant idea to ensure that any increase in the use of renewable energy is accompanied by the needed battery storage and transmission capacity, so the electricity generated can be continuously distributed by the grid. (This issue has been ignored by the federal government.) The legislation also promotes the development of a secure supply chain from resource extraction to energy production and consumption.

Utah’s goal is energy independence and affordable energy for its citizens.

Considering that the Biden administration, without any specific legal authority, is attempting to shut down all fossil fuel production in ten years and is pushing the growth of renewable energy beyond the limits of its storage and distribution capabilities, there is a need for new energy management ideas.

The policies contained in H.B. 45 make too much sense to remain in one state. While Utah will share its ideas through the literature, and educational conferences, a more effective option might be the formation of a regional Interstate Compact. These compacts are effectively used by environmental groups. It is time for conservatives to use them to promote their policies.

Interstate compacts are cooperative actions between states to advance specific policy issues. The compacts can be congressionally approved or non-congressionally approved agreements between states to take specific actions.

Formal, congressionally approved compacts with other states are established under Article I, sec.10, cl 3 of the U.S. Constitution. These formal state compacts range from boundary disputes to lotteries, river management, drivers’ licenses, to multi-state tax matters. Ballotpedia provides a list of approved compacts from 1785 to 2014.

The Southern States Energy Compact is a workable example of the formal, congressionally approved Compact. It has eighteen members and was created to encourage economic development among its member states through the improvement of energy, environmental, and technology policies.

Not all Compacts need to be approved by Congress. While the text of the Compacts Clause reads as if all compacts must be approved by Congress to be valid, the U.S. Supreme Court has not endorsed this reading. The Supreme Court has “…adopted a functional approach in which only interstate compacts that increase the political power of the states while undermining federal sovereignty require congressional consent.”

Relying on the court’s functional approach, nine states in the Northeast and Mid-Atlantic, and three west coast states, formed regional compacts to address climate change concerns. They set up state cap-and-trade systems. It does not interfere with federal power since there is no authority to create such systems under federal law.

The difficulty with the formal approach is that in a divided Congress and with an administration hostile to all energy sources except green energy, it is unlikely Democrats would formally approve such an effort. Conversely, it is unlikely that the Democrats could secure the votes to disapprove of an informal energy compact, especially in light of the environmentalists’ cap-and-trade compacts.

A Reliable Energy Compact, like the environmentalists’ cap and trade compacts, would be formed to ensure local citizens have the energy they can afford. Such a compact would not, in any manner by changing any political balance within the U.S. or even be contrary to any federal law since there is no federal law that prohibits the development of a state from using its resources to produce reliable and affordable supplies of energy.

Within the mountain states region, Utah would likely find receptive members in Wyoming, Montana, North Dakota, South Dakota, Oklahoma, and Idaho. While the Reliable Energy Compact would not interfere with any federal law, it would stand as a competitive policy in the marketplace to the environmentalists’ cap-and-trade compacts.

This competition between radically divergent energy policies will allow the citizens of the nation to observe comparative benefits and costs in real-time and on real people. Such a comparison will assist the American people in distinguishing fact from propaganda. For far too long, the environmental community has controlled the public space with unworkable, expensive ideas. It is time for conservatives to place their ideas into the public square to be tested alongside the claims of the environmental community.

Let the better policy win!

William L. Kovacs, author of Reform the Kakistocracy, winner of the 2021 Independent Press Award for Political/Social Change, and served as senior vice president for environment, technology & regulatory affairs at the U.S. Chamber of Commerce.





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  • Russia’s biggest weapon (and China’s too) is fossil fuel energy  

Russia’s biggest weapon (and China’s too) is fossil fuel energy  

Hon. Don Ritter

March 2023

Russia’s biggest weapon (and China’s too) is fossil fuel energy  

Russia’s biggest weapon (and China’s too) is fossil fuel energy  

US focus on climate change and fossil fuel suppression is courting a national security disaster

The capacity of a modern economy to produce food and goods for its citizens, and weapons and fuel for its military to project power, are the undeniable twin pillars of global power. Both depend on reasonably priced and readily available energy.

Almost 80% of America’s energy is supplied by oil, gas and coal. Only 20% comes from other sources such as hydropower, nuclear, wind and solar. Even the greenest’ of economies will need fossil fuel backup when the wind doesn’t blow and the sun doesn’t shine. Wind and solar provide 5% of our total consumption and only 2% of the energy to power some 290 million vehicles.

In other words, American literally runs and fights on fossil fuels.

Russia, despite an economy smaller than Italy’s, has shown it could defy all international norms and invade a neighboring country because it has abundant energy.

Weapons, and more weapons. First it was Javelins, then Howitzers, then HIMARS, then anti-missile and drone capability, then longer range ATACMS, then better tanks, now F-16s. Who can tell what the next weapon will be needed to defend against Russian aggression?

Russia has its weapons, too, and they are being paid for by the sale of oil, gas, coal, and fossil fuel-derived products like petrochemicals, fertilizers, etc. Russian missiles, planes, drones, tanks and artillery that shed Ukrainian blood and destroy homes, hospitals and electric-power stations are bought with Russia’s fossil fuel revenues.

Energy is Russia’s greatest weapon as it makes possible all the others. Only with such revenues can Russia continue its devastation of Ukraine. A new Russian offensive is brewing, and it too will be financed by its energy revenues.  Russians from Putin on down are talking about a much longer war because they have the revenues to support one and they don’t have to worry about a citizen-taxpayer revolt or getting reelected.

While the U.S. and Europe have restricted their purchases and consumption of Russian energy, it is sold elsewhere. That energy sells at a discount, but Russia is still earning hundreds of billions of dollars from energy sales and thus able to continue its war for as long as Putin wants. In spite of sanctions, Russia sold over $350 worth of fossil fuels in 2022. In the meantime German keeps its fracking ban.

To achieve peace in Europe and avoid potential wars elsewhere, one would think that America and the West would be increasing their own supply of oil, gas and coal and driving down prices on the global market. Such initiative would also give fence-sitting counties like India and Brazil in the “Global South” alternative sources to substitute for Russian products.

One would also think that the West would understand that its ability to replenish weapons and ammunition being sent to Ukraine and resist aggression, anywhere, like Taiwan for example, is based on production, shipment and fueling with fossil fuels and decidedly not on wind and solar. There will never be and electric tank!

And why not drive down drive down the price that Russia receives for its energy, while providing the economic and military security derived from fossil fuels? The answer from Europe and now America has been an emphatic “no.” Apparently, addressing the computer-modeled “climate crisis” takes priority over national defense, stopping Russian aggression in Europe, and securing reliable, affordable energy to power modern industrial economies and living standards.

The alternative – simultaneously furthering the technology of renewables like wind and solar while building up fossil fuels within an “all of the above” approach – is anathema to those who believe religiously that climate change is an existential threat. Ironically, the same people are happy to substitute U.S. fossil fuels with oil from dictatorships like Venezuela, Iran and Saudi Arabia. They don’t seem concerned that wind, solar and battery supply chains run mostly through Communist China.

An “all of the above” energy strategy would make it harder for Russia to finance its war, save Ukrainian lives and mitigate their suffering. It would show that America was willing to challenge Russia’s energy dominance now and into the future.

Sadly, the very opposite is happening. The U.S. is killing energy transport pipelines, curtailing permitting of refineries and natural gas export facilities, suppressing oil and gas leasing and drilling and, worst of all, stifling longer-term investment in the industry. Driven by an all-encompassing determination to limit CO2 emissions, Europe, and now America, have declared war of fossil fuels. Meanwhile, Russia and China burn oil, gas and coal and emit greenhouse gases at levels that dwarf the West’s.

Governments in Europe and now in America have utterly failed to see that, by suppressing fossil fuels, they are ceding enormous power to countries like Russia, Iran and China – who use those very fossil fuels to strengthen their own economies and military power and threaten others.

Energy has been weaponized and the West is in full energy-disarmament mode. The West is forfeiting its ability to gain peace through strength, with energy being the all-encompassing weapon in national and alliance arsenals.

The Russian people have experienced far greater suffering when total war was being waged on their own territory and millions perished. This time, the Russian people don’t feel the brunt of the war, so the pressure to end it is limited it and Russia’s vast fossil fuel revenues are available to continue it, perhaps for years.

It is doubtful that that support for Ukraine from potentially fickle Western democracies could last that long.

National economies and nations’ militaries still run on fossil fuels. There is no substitute for fossil fuel dominance, even on a longer-term horizon. To believe and act otherwise is suicidal. It’s the real “existential threat.”

Don Ritter holds a Science Doctorate from MIT and served fourteen years on the House of Representatives Energy and Commerce and Science and Technology Committees. He was a National Academy of Sciences Fellow in the USSR, speaks fluent Russian, and was Ranking Member on the Congressional Helsinki Commission and founding Co-Chair of the Baltic States-Ukraine Caucus.

After leaving Congress he created and led the National Environmental Policy Institute. He is a founder and President & CEO Emeritus of the Afghan American Chamber of Commerce, and a Trustee of the Victims of Communism Memorial Foundation (VOC), where he co-chairs the Museum Capital Campaign.