U.S. Energy and Global Climate Solutions By Miles Moren

By Miles Moren

For decades, American energy policy was driven by a bipartisan ambition to reduce our dependence on foreign natural gas and oil. Today, the paradigm has shifted as the U.S. is now the world’s leading producer of energy, and the proposals addressing our nation’s energy future instead prioritize either energy security or environmental protections. But these false choices overlook America’s ongoing progress toward both energy production and emissions reductions. Sound policies – in federal and state legislatures, Virginia included – and private-sector innovations are accelerating domestic energy development and enabling climate solutions, which are increasingly important given the projected rise in global energy demand. At this defining moment, America’s natural gas and oil industry is uniquely positioned to deliver economic growth and emissions reductions with cost-effective, forward-looking approaches. American politics during the 2010s challenged long standing partisan relations in Washington, D.C. and in state capitals – Richmond included. Anti-establishment rhetoric, particularly on the national stage, has inspired Virginians to organize around a variety of issues across the political divide – from immigration and trade policy, to economic and healthcare inequality, to energy and environmental regulation. When it comes to that final pairing, it’s instructive to recall key policy realities. A deep dive reveals an industry-led focus on good-paying jobs, affordable energy, and progress toward a cleaner planet. America’s natural gas and oil industry is a familiar talking point – and occasional scapegoat – for local, state, and federal office-seekers crafting messages focused on stimulating the nation’s economy and improving the standard of living for U.S. families. American energy producers serve as a target to some politicians. But because Virginia voters understand the importance of energy abundance – and scarcity –politicians often champion the strength of the industry as evidence of economic prosperity. There are many reasons for that. To name a few: Natural gas use in the Commonwealth has increased greatly over the last decade, and by the end of 2017, it fueled 53% of Virginia's electricity net generation (EIA, 2019). Despite the increasing demand for the fuel, between 2008 and 2018 prices fell nearly 25% for Virginia residents (EIA, Virginia Price of Natural Gas Delivered to Residential Consumers, 2019) due to an abundance of affordable natural gas resources in the Appalachian region.

About one-third of Virginia households rely on natural gas for home heating, and the jobs of some 125,000 Virginians (PricewaterhouseCoopers, 2017) are supported by the natural gas and oil industry, which represents nearly $12 billion of the state’s economy (PricewaterhouseCoopers, 2017). Reliable energy resources are foundational to the significant military presence in Virginia Beach and the Hampton Roads region. That’s why Naval Station Norfolk has proposed developing a natural gasfired cogeneration facility to reduce emissions while increasing energy security and strategic flexibility (warwickmechanical, 2019). These facts reflect Virginia’s key role in a nationwide energy resurgence. For decades, American energy producers have maintained bipartisan support for reducing the nation’s dependence on foreign oil, with every president since Jimmy Carter acknowledging the link between energy independence and national security. Despite all that presidential solidarity, today’s political divisions are shifting this paradigm and polarizing the conversation around energy and the environment. It is either alarmists or deniers, regulations or rollbacks, energy or the environment. But these are false choices that ignore our progress to date and reject common-sense solutions when the demand for both emissions reductions and energy has never been greater. Given this growing demand, sound policymaking that complements private-sector innovation is essential to an ever-cleaner energy future, and the natural gas and oil industry is poised to accelerate this ambition in Virginia and beyond. Radical political positions serve only to block true progress. Last year, the U.S. continued its role as the world’s leading natural gas and oil producer (EIA, 2019) and in 2014 it became a net exporter of total energy (EIA, 2020) for the first time in more than 60 years. At the same time, nationwide greenhouse gas emissions fell by about two percent in 2019, according to reports by the Rhodium Group (Houser & Pitt, 2020) and the U.S. Energy Information Administration (EIA, 2019), and the latter agency projects carbon dioxide emissions will continue to decrease annually through 2021 (EIA, EIA Expects U.S. Energy-Related CO2 Emissions to Decrease Annually Through 2021, 2020). These analyses are consistent with the years-long trend in U.S. emissions reductions, and the data clearly demonstrate that energy security and environmental progress can be achieved in tandem. In fact, the growth in domestic natural gas production – driven by horizontal drilling and hydraulic fracturing – has contributed to fuel switching in electricity generation, displacing carbon intensive coal-fired power plants. Between 2005 and 2018, carbon dioxide emissions from the U.S. power sector declined 27% (EIA, Carbon Dioxide Emissions From Energy Consumption: Electric Power Sector, 2020) with coal-to-natural gas switching accounting for more than half of the reductions (EIA, 2018, 2019) – and this same trend has played out at the state level. Between 2008 and 2017, power generation from natural gas in Virginia

increased from 13% to 50% (EIA, 2020), while statewide emissions of carbon dioxide from the sector decreased by more than 20% (EIA, State Carbon Dioxide Emissions Data, 2019). The modern technologies and economic conditions that have enabled this decline in emissions were unimaginable nearly a decade ago, but the increased availability of cleaner natural gas suggests that progress toward climate solutions requires an innovation-driven approach rather than extreme political posturing. As our state, nation, and society demand energy services and emissions reductions, natural gas and oil companies are uniquely positioned to address this dual challenge. Contrary to what you might hear on the campaign trail, this industry is committed to mitigating the risks of climate change while meeting the world’s growing energy and economic needs. By advocating for sensible policies and deploying new technologies – like carbon capture, utilization, and storage – natural gas and oil companies can ensure the development of sustainable energy and facilitate conservation in all sectors of the economy. Furthermore, industry-led initiatives, like The Environmental Partnership, are continuously improving performance and reducing emissions of methane and volatile organic compounds in energy production. The expansion of natural gas and oil infrastructure alongside other resources, including wind and solar, will enable the growth of cost-effective opportunities for an ever-cleaner fuel mix. As Virginia transitions to lower-carbon energy options, it’s important to acknowledge the ongoing role of natural gas in reducing emissions, supporting grid resiliency, and facilitating the growth of renewables. The risks of climate change are real, and more than ever, the U.S. needs solutions that realistically address it. This involves tempering hyper-partisan positions and populist messages related to energy and the environment, striking a balance between economic progress and emissions reductions, and recognizing the potential of the private sector in achieving these ambitions. American energy powers the products and processes that get Virginians from point A to point B, and serve as building blocks for the materials, products, and tools that keep our Commonwealth prosperous and more connected than ever before. The natural gas and oil sector supports good-paying jobs, contributes to lower electricity costs for American families, and generates revenues that fund education, infrastructure, and conservation projects across the nation. To write off the value of the products and people of the natural gas and oil industry, as some lawmakers are prepared to do, is a misguided approach to America’s energy future. Instead, in Virginia and beyond, let’s offer proven solutions – not empty rhetoric – to continue to deliver U.S. energy and environmental progress.

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98.A&map=ELEC.GEN.ALL-VA-98.A&freq=A&ctype=linechart U.S. Energy Information Administration. (2020, January). Primary Energy Exports by Source and Total Net Imports. Retrieved January 28, 2020, from https://www.eia.gov/totalenergy/data/monthly/pdf/sec1_11.pdf U.S. Energy Information Administration. (2020, January 17). EIA Expects U.S. Energy-Related CO2 Emissions to Decrease Annually Through 2021. Retrieved January 28, 2020, from https://www.eia.gov/todayinenergy/detail.php?id=42515