In this episode, Dartmouth professor Erin Mayfield discusses some new modeling on the Build Back Better Act, showing how and where it would reduce emissions in the US economy, how it would affect inflation, and how many jobs it would produce.
Full transcript of Volts podcast featuring Erin Mayfield, March 7, 2022
David Roberts:
So the Build Back Better Act, about which I have written and talked quite a bit here on Volts, is dead — apparently dead as a doornail. Late last year, our beloved West Virginia Senator Joe Manchin basically drew a red line and said he would not pass the bill in its current form. He issued a bunch of demands and restrictions; the other Democrats were thrown into chaos.
Now, a lot of other stuff has distracted attention from the BBB, including the ongoing pandemic, the ongoing right-wing assault on democracy, and Russia's invasion of Ukraine. It seems that the neglected BBB is drifting further and further away from our political consciousness.
That is a very bad thing, because the climate provisions of BBB represent not only Democrats’ final chance to take substantial action on climate at the federal level, but also a genuinely good climate bill. What's more, Manchin has expressed openness to the climate portions of the bill; he recently came out with a sort of counter offer to his fellow Dems, an extremely stripped-back version of the bill that would include some raising of taxes on rich people and some reducing of prescription drug prices, the revenue of which would go to climate spending — basically, a revenue and climate bill.
No one's quite sure what he wants to see in that climate part. But he has previously expressed openness to the climate provisions of BBB as they now exist. So somebody needs to get on that.
To illustrate the point — just what an impactful decision, what a big deal this is — a new round of modeling has recently been issued by the Zero Lab at Princeton, specifically by its REPEAT project — the Rapid Energy Policy Evaluation and Analysis Toolkit — which they have set up to do rapid modeling on legislation that is currently being discussed, to reduce the lag between legislation and modeling.
What the REPEAT project has done is model a net-zero pathway, but also model the bipartisan infrastructure bill, what it would do, what it would accomplish in terms of greenhouse gas emissions and energy spending, and then what BBB would do and accomplish in terms of greenhouse gases and energy spending. And they issued a report.
One of the lead authors on the report is Erin Mayfield, a professor of engineering at Dartmouth who specializes in energy systems and energy modeling. I thought I would have Mayfield on to talk about her modeling of the bill, why the bill would have the effects it has, and how it compares to a world where only the bipartisan infrastructure bill has passed. I'm excited to talk to her, not only about the technical details of the report, but some of the political implications — what it means for inflation, what it means for the debt, what it means for jobs, and what, if anything, it has to do with the war in Ukraine.
Without further ado, Erin Mayfield, welcome to Volts.
Erin Mayfield:
Hello, happy to be here.
David Roberts:
Great to have you. The REPEAT project at the Zero Lab has modeled four scenarios of the US energy future, including a net-zero scenario. Is it right to think about the net-zero scenario as the ideal scenario?
Erin Mayfield:
I wouldn't quite call it ideal. It’s a cost-optimized pathway. We are diverse people with different objectives, so ideal is in the eye of the beholder, but it meets our net-zero targets by 2050, in addition to an interim target of 50 percent below 2005 levels by 2030.
David Roberts:
So the main consideration that model is using is lowest cost. We can acknowledge that in real life there might be other considerations, but that's ideal from a cost perspective.
Another scenario is frozen policies: policy as of the day Joe Biden took office. Obviously that’s not going to be realistic, but it’s a baseline if nothing happened.
Think of the frozen policies as rock bottom and the net zero as the aspiration, and in between are two scenarios – one, the infrastructure bill that passed recently, and second, the infrastructure bill plus the Build Back Better Act.
Can you tell us how far the infrastructure bill gets in terms of reducing greenhouse gas emissions and how far the Build Back Better Act gets, and how that compares to those top and bottom scenarios?
Erin Mayfield:
We wanted to not only evaluate the emission reductions, or how and if we meet emission targets – we also wanted to evaluate what it physically means in terms of things like clean energy infrastructure, electric vehicle deployment, and fossil energy use, and also what these policies mean for households and investors. We looked at impacts like household energy expenditures, capital investment, employment, air pollution – all of these impacts that are important to different stakeholders, but beginning with what these policies mean for emissions.
Enacting the climate and clean energy investments in Build Back Better would cut greenhouse gas emissions by more than 5 billion tons between 2022 and 2030. This would put the US on track to reach President Biden's commitment to cut emissions by half of peak levels by 2030. Importantly, though, without the Build Back Better Act or some equivalent, the recently enacted infrastructure bill would leave annual greenhouse gas emissions more than 1 billion tons short of the nation's 2030 goal, which is a huge gap.
In other words, the infrastructure bill would achieve only about 9 percent of the emission reductions needed to reach 2030 emission targets, largely through transportation and building sector investments. The Build Back Better Act has the potential to deliver about 90 percent of the necessary emissions reductions to meet the 2030 targets.
David Roberts:
So the infrastructure bill is very close to negligible as a climate bill. Conversely, Build Back Better gets close to what we actually need – very close, although not quite there, to a net-zero trajectory. To emphasize, the Build Back Better Act climate provisions are the difference between almost nothing and almost sufficient. It's a very, very big deal.
You did model two different versions of Build Back Better, and the latter one reduces emissions a little bit less. What’s the difference between those two?
Erin Mayfield:
In the November version of Build Back Better, more than 30 percent of the emission reductions are in the power sector and about a quarter are in the transportation sector. There are also emission reductions associated with industrial and building sectors, as well as some non-carbon dioxide greenhouse gas reductions.
How the November version relates to the earlier version of the act from September is that there's no longer the Clean Electricity Performance Program that would have further reduced emissions in the power sector. But the November version has an increased 45Q tax credit for carbon capture, which contributes to further reductions in emissions in the industrial sector.
David Roberts:
So they come out relatively close emissions-wise. I think it was around a 9 percent gap between the two, but the source of the emissions shifts. The November version seems to allow for a lot more coal, I noticed. Is that due to the loss of the Clean Electricity Performance Program?
Erin Mayfield:
It's a complex system, so there are many things interacting at once, but that's in part what’s happening.
David Roberts:
That's emissions. Let's talk about consumer energy expenditures, or how much US consumers spend on energy. All of these graphs are sort of the same – it shows that the infrastructure bill will do very little and the Build Back Better will do a lot. How much would Build Back Better reduce expenditures, and why? And say a little bit about the regional aspects – it will have more effects in some places than others.
Erin Mayfield:
The Build Back Better Act lowers annual US energy expenditures in aggregate for households, businesses, and industry. Tax credits, rebates, and federal investments in the act would shift costs from our energy bills to the federal tax base. We would lower the cost of electric vehicles and heat pumps, and finance investments in energy productivity-enhancing improvements and carbon capture equipment.
On average, annual household energy expenditures will decline by about $300 by 2030. This comes from investments in things like heating electrification, energy-efficiency measures, and electric vehicle purchases, so households displacing expenditures on gasoline and heating fuels.
As you said, energy expenditures vary regionally. Texas would potentially see annual household expenditures decline on the order of $500, which is non-trivial for many households.
David Roberts:
Why Texas, particularly?
Erin Mayfield:
Underlying this is a cost-optimizing assumption, so it’s partly driven by the resource base of solar and wind in the region.
David Roberts:
I noticed that Build Back Better would dramatically raise the amount of money that we spend on supplying energy. What struck me as a little odd is that both versions of Build Back Better would raise capital expenditures on energy supply through 2030 more than a net-zero scenario would. Why is that? Are we overspending, or misspending? It was a similar story in jobs: Build Back Better would produce more jobs than the net-zero scenario would through 2030. Why?
Erin Mayfield:
It’s not misspending; it’s spending a little bit differently on the margins.
In terms of capital investments and infrastructure, the passage of Build Back Better would increase capital investments by more than $1.5 trillion out to 2030. These investments include carbon dioxide transport and storage and fossil power generation with carbon capture, in addition to investments in hydrogen production, which differs from our net-zero pathway case. So, investments in hydrogen production, in technologies like electrolysis and methane reforming.
The greatest impact is on investment in wind power and solar PV. Between the Build Back Better and the infrastructure bill, that investment in wind and solar amounts to about $550 billion that will support both domestic manufacturing of solar and wind products and the development and construction of wind and solar infrastructure. This percolates into the effects that you're seeing on the job side, which are largely coming from domestic manufacturing of solar and wind construction in addition to construction and maintenance of our grid infrastructure.
David Roberts:
It's probably for similar reasons that the Build Back Better scenario builds out more wind and solar than the net-zero scenario does. That also confused me a little bit. I'm not used to seeing anything that the US is planning on doing being sufficient, much less more than sufficient. Why would Build Back Better build more wind and solar than a net-zero scenario would?
Erin Mayfield:
Importantly, the net-zero scenario that we're presenting is one potential pathway. The rate of buildout of solar and wind can differ depending on the way the net-zero pathway is modeled. We're also only showing results out to 2035. When you look at a net-zero pathway out beyond 2035, you see continued ramp-up of solar and wind deployment.
In the end, there's a lot of solar and wind deployment in both the Build Back Better and any type of net-zero scenario that we could model, and it continues beyond what we're showing in our report out to 2050.
David Roberts:
We could think of it as moving some of the spending on wind and solar up in time a little bit relative to the cost-optimized pathway.
Erin Mayfield:
Yes.
David Roberts:
That's capital expenditures. Through Build Back Better, we have consumer electricity bills falling, overall investment in clean electrification radically ramping up – and again, just to note, the infrastructure bill alone has virtually no effect on either of those.
Then there's air pollution. All the research on air pollution, especially in the last decade or so, shows that it's worse than we thought, at lower doses than we thought, in more ways than we thought. Build Back Better would dramatically reduce air pollution, too. Can you say a little bit about why an infrastructure bill alone wouldn't and Build Back Better would, and quantify the lives saved?
Erin Mayfield:
The distribution of these air pollution-related impacts are embedded in our energy system. In general, air pollution from our energy system is regressive – low-income people bear the highest burden in terms of health effects from air pollution, and air pollution from our energy system as a whole also disproportionately impacts people of color, which has been caused by how we historically sited infrastructure and inequities within our housing markets and in our broader economy.
The Build Back Better Act has the potential to reduce public health impacts from air pollution, driven by the retirement of coal power plants and the electrification of our vehicle fleet. The benefits are on the order of 25,000 mortalities avoided from the passage of Build Back Better. Importantly, however, how investments are allocated will greatly influence the magnitude and the distribution of these air pollution-related benefits.
David Roberts:
Meaning which coal plants are closed, how fast transportation is decarbonized, that kind of thing?
Erin Mayfield:
Exactly.
David Roberts:
Is it fair to say that almost anything that reduces particulate air pollution in the US has progressive benefits, just because the damages are so regressive?
Erin Mayfield:
On some level, yes. Again, it really depends on how we make these investments. That could greatly impact the relative health effects or improvements in health for different subpopulations on the basis of income and race.
David Roberts:
There have been so many versions of Build Back Better. I know there were equity provisions early on, like 40 percent of the benefits of spending have to go to vulnerable communities. In the latest version, is there still reason to believe that those investments will be equitably allocated?
Erin Mayfield:
Beyond Build Back Better, thinking more toward Justice40 or equivalent provisions or statements from the White House, these are things that people in our government institutions have to figure out – how these funds are equitably allocated, and what does equitably allocated actually mean. There are certainly some provisions within Build Back Better, but the important details will come after passage in how it's distributed, and those decisions will be driven on the federal government side.
David Roberts:
That will be mostly EPA and Department of Energy? Or are there other big players in spending this money or making allocations?
Erin Mayfield:
Some of how it's administratively handled is yet to be seen. I would imagine Department of Transportation has a role in this as well. It also goes down to, how is this funneled through the states and to communities? The states play a role, but what that role is is uncertain as well.
David Roberts:
Your graphs show that either version of the Build Back Better Act and the net-zero scenario pretty dramatically reduce net energy demand. That might not be entirely intuitive to people. We're building a bunch of stuff, the economy is growing, the population is growing, we're passing a bill that's going to have us spend billions of dollars on new power infrastructure, and yet despite all that, net power demand is declining through the magic of electrification. Say a little bit about why that happens.
Erin Mayfield:
More broadly, an important element to highlight is what this all means in terms of physical changes in our energy infrastructure systems and supply chains and demand. With respect to final energy, Build Back Better can reduce demand in net by about 6 percent. This largely comes from reduced dependence on use of fossil fuels like natural gas, gasoline, and diesel, and increases in electricity and hydrogen.
There are other infrastructure changes to point out as well. On the transportation front, the act would support about 35 million light duty electric vehicles on the road by 2030 and more than 30 million light duty trucks and SUVs. That translates into about a quarter of the light duty fleet being electric by 2030. There's also support for substantial investments in medium and heavy duty trucks, such that there could be 5 million zero-emission trucks by 2030, which includes both EVs and fuel cell vehicles. So decarbonizing the transportation sector is really a driving force for reducing final energy demand and reliance on fossil fuels.
Changes in the residential sector are also really important. The act would support massive changes in space and water heating through the adoption of heat pumps, which displaces the use of natural gas and heating fuel oils for meeting heating demands. In quantitative terms, that means 40 million households – or a third of all residences – may have heat pumps by 2030. There are potentially similar adoption rates in the commercial sector as well.
Of course, there are massive changes in power system infrastructure that would be spurred by the act. This includes major retirements of coal power and the massive buildout of solar and wind, in addition to fossil fuel power with carbon capture, such that over 80 percent of generation is clean by 2030. From the perspective of build rates, this means on the order of 40 gigawatts of solar annually over the next couple years and ramping up to 100 gigawatts annually by 2030. You can compare this to historical build rates, which in 2020 were about 10 gigawatts of utility-scale solar.
The story looks similar for the rate of wind buildout, which is on the order of 30 to 60 gigawatts annually over the next decade compared to, again, historical buildout in 2020 of about 15 gigawatts of wind. So these build rates are not unachievable. Investors and developers are already mobilizing wind and solar – it's roaring in many respects. Just this past week we saw major bids for offshore wind leases. And investment is following, or maybe even leading, the policy winds.
Build Back Better also supports a large buildout of gas and even coal with carbon capture, on the scale of buildout rates during the shale gas boom.
David Roberts:
The reason that electrifying the vehicle fleet leads to a reduction in net energy is just that electric engines are way more efficient than gas engines. And electric heat pumps are way more efficient than gas furnaces. Any move to electrification, you end up getting the same service with much less primary energy. I feel like that's a fact that's hidden in plain sight that constantly needs more advertisement: we could cut our energy demand dramatically, while getting exactly the same energy services, just by electrifying.
But obviously electrifying things leads to more total electricity use in the country, and that will come with an expansion of infrastructure. There are some concerns on the margins about whether the US grid is ready to supply that much more electricity, because we're talking about a lot more electricity involved. Are we ready for that? Are there sufficient investments in Build Back Better to get us ready for that, in terms of transmission and distribution systems being beefed up, new transmission lines built, etc.?
Erin Mayfield:
To support the buildout of our electric power infrastructure, mainly through wind and solar, this also means buildout of our transmission and distribution infrastructure. We show large investments in buildout in interregional transmission from the upper Midwest to the Great Lakes and mid-Atlantic, as well as from the lower Midwest to the Southeast – really across the board. This is spurred in part by grant funding and the transmission investment tax credit within Build Back Better.
David Roberts:
So there's reason to believe that the infrastructure can keep up with the increasing demand for electricity. You're not worried about that.
Erin Mayfield:
This is where it's important to point out the difference between model world and the real world. They’re not the same.
Real world outcomes will contend with various non-cost challenges that could slow or otherwise differ from the pace of changes and the allocation of investments relative to what we're assuming and what we’re modeling. At a high level, our modeling optimizes assuming rational economic behavior from all actors. We're assuming some inefficiencies in the allocation of resources, but the modeling has really limited frictions related to deployment and sequencing of power generation and transmission capacity, and limited frictions with respect to the scale-up of our industrial supply chains, like wind turbines, solar panels, and heat pumps and all of the necessary materials to make those products.
We also are assuming efficient consumer adoption of products like EVs and heat pumps, given these relative price signals and incentives. There's certainly a substantial amount of uncertainty in how the future will unfold, and a difference between model world and the real world.
There are a lot of degrees of freedom with respect to how investments and infrastructure deployments can manifest. Baked into the legislation is some level of fungibility with respect to how funding is allocated and investments are made, and different stakeholders have different preferences and different ethics, whether implicit or explicit, with respect to these investments and infrastructure, and the environmental and economic impacts from those investments.
David Roberts:
The soft costs or regulatory barriers to transmission are something that I've talked a lot about here on Volts. Isn't there something in the infrastructure bill to ease those?
Erin Mayfield:
In the most recent variant, I'm not sure if I can fully say what the enabling actions are. There are many provisions of Build Back Better, but certainly in terms of grants and funding and the transmission investment tax credit.
David Roberts:
In a lot of respects, what the Build Back Better Act does is almost in line with the net-zero scenario. In terms of transportation decarbonization, it's a little slower than what net zero shows. Why is that, and what are the levers that could be pulled a little harder to get us on track there?
Erin Mayfield:
There are different transportation or EV incentives within there. Again, going back to the net-zero scenario, it is one version of the rate of electrification. You could certainly have a net-zero scenario that shows slower vehicle electrification or electrification of transportation as a whole. It's one variant in which what we modeled in the net-zero scenario doesn't exactly align with what's in Build Back Better – but there are substantial investments in Build Back Better on the transportation front, so those differences may not be that big or thwart our ability to meet our 2030 and 2050 targets.
David Roberts:
If you look at the line of Build Back Better and the line of net zero, they're more or less in alignment in a lot of the graphs. But one place where the net-zero model differs a lot from Build Back Better is randomly in residential water heating. The net-zero scenario shows residential water heating plunging in energy demand, and not as much in Build Back Better. This is a small thing, but why does the model like electric water heaters so much?
Erin Mayfield:
It's important to point out that we read through every line of the legislative texts and we linked it to how that actually is modeled in our system. The way the provisions are written, some investments aren't tagged to water heating, so it's not represented in the model. That accounts for differences between the modeled scenario for Build Back Better vs. net zero in terms of investments in water heating.
David Roberts:
It's impossible to be totally specific in your modeling about Build Back Better because the bill itself is not totally specific.
Another striking difference between what your cost-optimized model wants to do and what Build Back Better is going to do comes in sequestration. The more recent form of Build Back Better, the Manchin form, lost the Clean Electricity Payment Program, but picked up a bunch of additional subsidy for sequestration. Why does the cost-optimized scenario have virtually no sequestration through 2035? Is it assuming that that won't become cost prohibitive through then? Why so much more sequestration in Build Back Better than in the cost-optimized model?
Erin Mayfield:
In a cost-optimized model, it's selecting things that on the margin are cost effective. The provisions in Build Back Better are supporting buildout of gas and even coal with carbon capture through the types of tax credits and other provisions within the bill, which wouldn't otherwise be selected in a cost-effective framework.
David Roberts:
Hopefully early investments in those will reduce the costs, at which point, if you re-ran the cost-optimization model, it might select more of them.
Erin Mayfield:
Yes, that's a possibility. Beyond our carbon capture infrastructure but related to carbon capture, some of the provisions within the bill are really enabling actions. They don't directly mitigate or reduce emissions in the near term, but actually are enabling future investments and driving down costs in some areas.
David Roberts:
Of the five scenarios – baseline, infrastructure bill, the two Build Back Betters, and net zero – the only scenario in which the use of natural gas rises is the net-zero scenario. Your net-zero scenario uses substantially more natural gas than any of the other scenarios. Is there an easy way to explain that?
Erin Mayfield:
How we're using our fuel supplies is a big part of it. Also underlying this, in a wrinkle that's probably not even reflected in the figure that you're looking at right now, is that a large part of the natural gas supply question comes in terms of how much we're exporting as well.
David Roberts:
Why would a cost-optimized scenario choose more gas? I don't fully get that. It's counterintuitive.
Erin Mayfield:
It relates to all the other investments in the portfolio. Again, we're cutting the snapshot to 2035. You see all this investment in solar and wind in our Build Back Better scenarios that are even beyond what we see in our net-zero scenario. Also in there, you can see what's happening with respect to nuclear between our different scenarios, which also influences what is going on with natural gas and is supplying a clean, firm resource.
David Roberts:
So out through 2035 or however far this goes, the net-zero scenario includes more firm resources – it includes more nuclear and gas than either of the Build Back Better scenarios, and less wind and solar. Is that just because having a little bit more firm reduces system costs?
Erin Mayfield:
Yes, on the margin, that's true.
David Roberts:
The basic take-home is that Build Back Better would be, even in its slightly diminished form, a massive, truly historic piece of climate legislation that would get us close to the trajectory we need to be on, and not passing it and satisfying ourselves with the infrastructure bill would be very close to doing nothing on climate. I feel the events in the world carrying us away from this subject, and I feel like I'm on the raft shouting, “wait, it's a big deal!”
I guess we should just admit, at this point, that Build Back Better is dead in its current form. A lot of that has to do with Manchin and his worries, which I thought we could briefly discuss here.
So let's talk about inflation. Everybody's worried about inflation, Manchin’s worried about spending while we're experiencing inflation. What can we say about what Build Back Better would do to inflation? Can we say anything confidently?
Erin Mayfield:
There are a few things that we can say. The points made earlier about reducing energy expenditures – that's an extremely important point. We're also reducing our dependence on fossil fuels and potential global shocks, so further insulating American consumers from those types of price shocks.
I have to say, I am a bit fatigued when it comes to thinking and talking about Joe Manchin, and I imagine many people feel very similarly. There's no such thing as perfect policy, and the US is made of a lot of different people that are diverse and have different opinions and preferences and ethics. Policymaking is always operating in this place of satisficing.
The question becomes, what are we willing to accept and what are the people, or person, with power willing to accept? Instead of trying to over-intellectualize or decipher what Manchin’s motivations are, and long discussions on inflationary effects that may not manifest or may have no basis, perhaps just take Manchin at his word regarding what he wants in the moment for whatever reasons those may be. I don't mean to say fold over, but at the same time, trying to over-decipher what Manchin’s concerns are hasn’t gotten us very far. We’re stalled.
David Roberts:
The concerns he's voicing are common among conservatives. But insofar as Biden has to speak for these provisions, it seems to me like he has a pretty good case to make on inflation: “you're worried about energy prices, energy prices are a particularly concentrated area of inflation, here's a bill that's going to reduce those.” I don't hear the champions of this bill really making that case out publicly, but it seems like a pretty obvious one, and the anti-inflationary effects of the bill ought to be at least discussed.
What about debt? Lots of people in American politics claim to be concerned about the debt. What would be the effect on the deficit of the latest version of Build Back Better?
Erin Mayfield:
That's the recurrent question. Again, we're reducing our total expenditures in net from a societal perspective.
David Roberts:
That's frustrating, because there are lots of situations in which more government spending could reduce overall societal spending to positive effect, but people get obsessed with that one measurement.
Isn’t the current version of Build Back Better all paid for, at least over 10 years?
Erin Mayfield:
I believe so.
David Roberts:
Another argument I feel like the backers of Build Back Better ought to be making is that there's a ton of stuff that would bolster domestic manufacturing, which is universally popular among voters. Do we have reason to believe that this would really stand up some domestic supply chains? Is there stuff in there that's big enough and impactful enough to make a big difference in domestic manufacturing?
Erin Mayfield:
There are some tax incentive adders to stimulate domestic manufacturing shares of products like solar panels, wind turbines, and heat pumps, and they could be really quite substantial in building out domestic supply chains.
David Roberts:
Do we know anything about the geographic effects, where those jobs might be likely to land, or is it impossible to say at this point?
Erin Mayfield:
It's impossible to say. There are many factors that influence where manufacturing facilities are sited and expand, so it's hard to say where those facilities will arise and where those resulting manufacturing jobs are.
David Roberts:
Finally, this Ukraine situation. I think everybody understands at this point that energy is a huge factor here – that everyone's dependence on Russian gas is in some sense constraining geopolitical response to this Russian aggression. You're seeing a lot of people, including Manchin, fossil fuel execs, etc., saying the lesson here, the way we insulate ourselves from this kind of thing, is to quit with this green frenzy and get serious about ramping up domestic supply of oil and gas. What lesson do you think we should be learning from this?
Erin Mayfield:
Of course there's an inundation of takes regarding the US’s role in all of this and how it interacts with our domestic energy policy and decarbonization – and full disclosure, I did not become an expert in the geopolitics of Ukraine and Russia overnight. What I can speak to are some of the touch points with domestic energy policy, hopefully without being entirely prescriptive or even naive regarding what we should or even can do given realities of our existing infrastructure and also the realities and uncertainties of our domestic and global commodity markets.
Reflexively, when I hear proposals to increase domestic fossil fuel production and associated infrastructure in the US to meet very near-term potential needs in Europe and elsewhere, I immediately think that we're resorting to archaic tools and narratives. There are big questions:
Are we further entrenching our systems into this inextricable dependence on fossil fuels?
Are we further exposing consumers to volatile global markets?
What are the existing physical near-term constraints of the US infrastructure system, like current LNG terminal capacity in use? LNG terminals and crude oil pipelines do not get built overnight.
On the other hand, ethically, what role does or should the US play in all of these interacting crises of climate change and Russia's aggression?
Where my thinking has momentarily landed is that of course passing Build Back Better or some equivalent Manchin-backed policy variant is one of the most important things that the US can do to manage an impending energy crisis in Europe. These types of investments and the magnitude of these investments will drive down domestic consumption of oil and gas, helping to shield American consumers from volatile global commodity markets while meeting climate targets. It begins to free up the need to import as much oil and reduces our demand for domestically produced gas, which in turn can help on some level moderate the constrained global markets or these markets that need to reconfigure in the absence of Russian gas.
The situation and the ethical dimensions are absolutely more complicated than what I'm conveying, but the overarching logic holds: we have to reduce domestic demand for fossil fuels and shore up our domestic manufacturing capacity, which are important both in the context of the climate crisis and in terms of the crisis in Ukraine.
David Roberts:
Long term, it seems very obvious that not being dependent on fossil fuels is going to ease a lot of these problems, but what to do in the short term is quite vexing. As you say, we can't just throw pipelines and refineries up; those aren't fast. But the reductions in gas demand that would free up some domestic gas for Europe are also not super fast. I'm inclined to say that big changes in energy infrastructure are simply too slow a tool to be really viable as a response to a short-term crisis like this. But I'm not an expert, either.
Final question, and perhaps the most difficult and impossible to answer: if you were a betting person, at this exact moment, how are you feeling about the prospects of the climate provisions of Build Back Better getting passed?
Erin Mayfield:
I am not a betting person, and I do not have any special knowledge of where Manchin stands or where the politics stand – and they change in an instant. I will say that I will always be optimistic that we will do something, and we will be ready to model any kind of variant that Washington comes up with to support decision-making.
David Roberts:
Thank you for coming on and going through this, and for your thankless work modeling these things that never end up getting passed. I at least appreciate it.
Erin Mayfield:
Thank you for having me.
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