Mark Mills testified before the U.S. House Committee on Energy and Commerce in a hearing entitled “Back in Action: Restoring Federal Climate Leadership.”
Good morning. Thank you for the opportunity to testify. I’m a Senior Fellow at the Manhattan Institute where I focus on science, technology, and energy issues. I am also a Faculty Fellow at the McCormick School of Engineering at Northwestern University where the focus is on future manufacturing technologies. And, for the record, I’m a strategic partner in a venture fund focused on software startups in energy.
Since the purpose of this hearing is to explore actions directed, in the main, at changing the energy supply system of the United States, permit me to highlight some realities.
As the Committee knows, 80% of the nation’s energy comes from hydrocarbons, and internal combustion engines account for 99% of all transportation passenger-miles. Meanwhile, wind and solar supply less than 4% of U.S. energy, and electric cars under 0.5% of road-miles. Given the scale of our economy, changing the status quo presents some daunting economic, environmental and geopolitical challenges.
First, the cost of complete grid restructuring would be far greater than popularly acknowledged. The Administration has proposed spending $2 trillion on climate programs across seven domains. But, for the electric grid alone, analyses show we’d need at least $5 to $6 trillion in wind/solar and battery systems to replace existing hydrocarbon generation.
And, doing so by say 2035, would require a continuous construction program at least 600% bigger than any single peak year for utility construction that has occurred in the U.S., China or Germany over the past half-century. True, this would create jobs. However, since the final product remains unchanged, but uses more labor and capital, in economic terms this reverses a long-run goal of increasing productivity. And, as you know, productivity is the single most important feature of an economy that expands overall wealth for citizens.
None of the above includes the need for an enormous expansion of the grid if a significant share of cars shift from oil to electricity. In the end, it bears noting the arithmetical outcome: that new grid would reduce global carbon dioxide emissions by less than 6%.
Grid restructuring and accelerating electric cars also means exporting jobs and offshoring environmental consequences. Some 90% of solar panels are imported, as are 80% of the key components for wind turbines.8 Asian companies dominate global battery production and account for 80% of all planned factories. Even if we expand domestic manufacturing, our import dependencies remain for critical energy minerals.
On average, per unit of energy delivered, the quantity of materials extracted from the earth and processed for “clean tech” is 500% to 1,000% greater than with hydrocarbons. As it stands today, Chinese firms dominate the production and processing of many critical rare earth elements, and nearly all the growth in mining is expected offshore, increasingly in fragile, biodiverse wilderness areas. More mining can be done in an environmentally responsible way, but so far there’s little evidence of support for opening new mines in America.
These are some of the kinds of challenges that should be part of the calculus as the Congress seeks ways to meet society’s energy needs.
Mark P. Mills is a senior fellow at the Manhattan Institute and author of several reports including Mines, Minerals, and "Green" Energy: A Reality Check and The "New Energy Economy": An Exercise in Magical Thinking. For a review of his policy recommendations for the new administration, visit the memo he contributed to the Manhattan Institute's Transition 2021 series.
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