The Imperative for Reflection

Virginia’s “Lewis and Clark” energy future calls for an adaptable energy policy responsive to new information as it is gathered.

by Bill O’Keefe

Politicians are not known for engaging in reflection or looking back on legislation, but they should. The experience that Europe is having with its version of the Virginia Clean Economy Act is the reason why. Presently, Europe is experiencing energy shortages and surging prices. Some of this turmoil is due to global forces but some is due to energy decisions that European nations have made, in particular the decision to move rapidly to renewables and eliminate coal, nuclear and natural gas as major sources of electricity.

Green ideology blinded Germany and other European countries to the fact that wind and solar don’t provide around-the-clock reliable sources of energy. This summer there have been extended periods of low or no wind. Last winter, European nations experienced colder-than-normal temperatures which had the effect of reducing both solar and wind power and leading to steep price increases. Without reliable and commercially viable electric storage systems, renewables are vulnerable to cloud and snow cover and periods of low wind.

The General Assembly and Dominion Energy would do well to take a close look at Europe’s experience and determine how Virginia can avoid a similar fate. One important lesson is that major transitions are complex and beset with many uncertainties. Another is that government has at best a mixed record when it comes to industrial policy.

Advocates of the VCEA will claim that the General Assembly set a target and a date and Dominion decided that an enormous wind farm was the way to achieve it. That is an oversimplification. The correlation between the bias of political forces, special interest, and economic incentives foreordained the outcome. Mandating that all electric power by 2050 had to come from renewable energy left Dominion Energy no real choice, especially since it was guaranteed to profit independent of the cost. This a classic case of the Baptist and Bootlegger theory of public choice.

The mistake that the General Assembly made was specifying not only a date three decades in the future but also requiring renewable energy to be 100%. The assumptions behind this mandate treat uncertainty as if it either doesn’t exist or that it is too trivial to make a difference. That is a serious error.

Before the late Secretary of Defense, Energy and CIA Director James Schlesinger entered public service, he was an analyst with the Rand Corporation. He wrote a paper on technology decision making that is relevant to long term energy planning. He described two types of planning: Cook’s Tour and Lewis and Clark.  Cook’s Tour planning named after the travel company is like planning a vacation where the itinerary is known with specificity and there is a high degree of certainty. Lewis and Clark named after the famous explorers of the west deals with planning that is dominated with uncertainty. In sending them to explore the west, Thomas Jefferson did not know what was west of the Mississippi. Lewis and Clark had to gather and analyze information as they went along. Decision making was incremental as new information was gathered, it was evaluated and new decisions were made.

In a world where energy technology investments are growing and there is much uncertainty as to what electric power sources will prove the most cost-effective and reliable, it would be prudent for both the General Assembly and Dominion to hedge their bets and go slower. For example, in five years from now, how will natural gas with carbon capture and small modular nuclear reactors look compared with off shore wind? Legislators should remember that their goals are to reduce emissions as much as practical, ensure that Virginians have reliable electric power, and maintain reasonable rates for electricity.

In the real world, politicians can mandate but they don’t bear the costs of being wrong. Those are borne mainly by energy consumers. In 2050, the politicians who gave us VCEA will be long gone and Dominion customers will be left with the bill. Evaluating trade-offs along the way is the best way of making the best long term solution.

William O’Keefe, a Midlothian resident, is founder of Solutions Consulting and former EVP of the American Petroleum Institute.

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25 responses to “The Imperative for Reflection”

  1. I think the current situation is a bit more complex than the author leads on as carbon-based fuel supply/demand issues are contributing equally, if not actually driving the situation in Europe. He downplays that. No doubt that squeezing natural gas and coal has a material effect, but do we really want coal as part of the future energy mix?

    1. James Kiser Avatar
      James Kiser

      yes we do

      1. Even when US utilities abandon it because it’s no longer cost effective for them? Natural gas killed coal, not renewables.

        Why do you think it should be?

        1. Nancy Naive Avatar
          Nancy Naive

          Well, he likes coal because he gets it free every Christmas.

          1. That’s one answer but I’m curious to hear something besides a short sound bite.

    2. LarrytheG Avatar

      Yep. You can close down a coal plant or a gas plant but unless you dismantle it , it can still function, if need be.

      The problem is that natural gas is no longer cheap and available – not that they don’t have the plants to burn it.

  2. Citizens need to look beyond election year campaigns, good intentions, and short-term evaluations. They should consider the following:

    What predictions (positive or negative) have been made by candidates and elected officials in support of their proposals and goals? How accurate have such predictions been in light of subsequent events? Why vote for people who have a poor record of prognosticating?

    What promises have been made by candidates and elected officials in support of enacting or carrying out their proposals and achieving their projected goals? Which promises have they kept or failed to keep? If not kept, was there a good reason why not? Why vote for people who fail to keep their promises, or fail to make realistic promises?

    What has been the actual — rather than promised or anticipated — performance of candidates and elected officials? How does their actual performance compare to the predictions and promises they made? Why vote for people who have a poor record of performance?

  3. energyNOW_Fan Avatar

    We are in a period of extreme political polarization, where American citizens are increasing basing their consumer choices on what they feel is politically correct. Hence electric cars over gaso cars etc for the liberals. Costs, eco-soundness, and other factors are secondary to political correctness.

    1. Nancy Naive Avatar
      Nancy Naive

      4.5 ton Hummer with 1,180 HP that can go 0 to 60 in three (count ’em, 3.0) seconds, 350 mile range, and all electric. Probably two orders of magnitude fewer moving parts and 10s of times fewer critical fasteners, bearings, etc. All ya need is an extension cord.

      Nothing PC about that.

      1. LarrytheG Avatar

        yeah but Liberals are forcing people to buy it! 😉

        1. energyNOW_Fan Avatar

          Probably uses a mega-ton of Electricity too. Some EV’s like a heavy 6000-lbs Tesla makes sense for business to own because aside from EV subsidies, the weight class qualifies for truck incentives/depreciation schemes. Not sure if that loophole is still working or not though.

          But you won’t see too many of those Hummer EVs in NOVA you’d be paying out the annual Car tax like crazy.

      2. Matt Adams Avatar
        Matt Adams

        Only for the low low price of $113,000. You’re also mixing matching specs that are approx between the truck and SUV.

        Beyond that relevance?

  4. James Kiser Avatar
    James Kiser

    never under estimate the power of fools in large numbers.

    1. Nancy Naive Avatar
      Nancy Naive

      I have NEVER underestimated the GOP. They float. Nothing is beneath them.

      1. tmtfairfax Avatar

        Or the fool in chief – Joe Biden. Fits in well with the management and staff of the Post.

  5. LarrytheG Avatar

    The ONE thing I might agree with the author on is shutting down Nukes and then trying to figure out how to make up for that loss.

    It’s not only happened in Germany but in Japan and California.

    And it’s the reason why it is so important to develop Nukes that do not have the problems of the current existing ones that too many now reject.

  6. This just in…….Biden’s White House proposes ‘NordStream III’ to link the East Coast with affordable Russian natural gas.

    1. Nancy Naive Avatar
      Nancy Naive

      We could also get affordable Russian nuclear reactors… just contact Michael Flynn.

  7. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    Mr. O’Keefe is correct that there is a significant amount of uncertainty ahead and we should not pretend that there is not. At the same time, there is a lot to be said for setting deadlines and goals. Without deadlines, humans tend to dawdle, or, at the very least, not push very hard. John Kennedy set a goal of going to the moon within the decade. At the time, that sounded unrealistic but we did it. The government has set fuel economy standards for autos and trucks that the industry said could be met only with a fleet of subcompacts. Despite those protests, between 1975 and 1985, the average passenger vehicle mileage per gallon doubled and the mileage for light trucks increased by 68 percent.

    Statutes can be amended; goals can be adjusted, based on experience.

    The General Assembly made its mistake, not by setting a deadline and a goal, but by guaranteeing Dominion a tidy profit regardless of the cost of the method it chose to meet that goal. Off-shore wind energy is expensive and not 100 percent reliable. But, Dominion has no incentive to explore other methods, such as nuclear.

  8. Peter Galuszka Avatar
    Peter Galuszka

    This article conflates a number of things. Germany ditched nukes after Fukushima. It really didn’t have to do with renewables. The UK has had some (temporary) problems with light winds for turbines but they have massive gasoline supply shortages. Again, what’s this to do with the shifting to renewables? China, which has a tremendous fossil fuel generating capacity is short of fuel. One reason seems to be that the swift ramp up to a post-pandemic economic recovery, there are big imbalances in supply. Again, renewables?

    1. LarrytheG Avatar

      But just like Conservatives false (and dumb) claims about what happened in Texas… they gotta continue to spew misinformation…. it’s the main Conservative strategy these days for too many of them , deny and lie…if it is not what they want to believe.

    2. William O'Keefe Avatar
      William O’Keefe

      I suggest that you research the energy agenda of the EU nations from 2000 to today. It should be clear that most of the nations have taken actions to move away from fossil energy and toward renewables. The fact that renewables are intermittent affects the reliability of the grid.

      1. LarrytheG Avatar

        I was curious. Do you have a view with respect to Japan and it’s attitudes towards Nukes?

        Are they having similar issues to the EU?

  9. Merchantseamen Avatar

    VA is on its way to be CA East. Unfortunately solar panels don’t hold up to wind, wear and tear. This is a fact no one likes to talk about.

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