Similar to the two navigational hazards mythologized as sea monsters in ancient Greece—Scylla and Charybdis—which gave rise to sayings such as, “between the devil and the deep blue sea” and “between a rock and a hard place,” modern energy policy has its own Scylla and Charybdis. On the one hand is the requirement to maintain sufficient energy flows to avoid economic peril. On the other hand is the need to avert climate catastrophe resulting from such activities. Policymakers naturally want all the benefits of abundant energy with none of the attendant climate risks. But tough choices can no longer be put off.
Russia’s invasion of Ukraine and the West’s response of imposing sanctions on Russia are forcing a reckoning as far as global energy policy is concerned. The International Energy Agency (IEA) forecasts that the ongoing war and the U.S. sanctions may together reduce Russian oil exports by at least 3 million barrels per day—more than 4 percent of global supplies, which is a huge chunk of the delicately balanced world energy market. Some energy analysts are forecasting that oil prices could spike up to $200 per barrel later this year, exacerbating inflation and triggering a global recession. We’re facing the biggest energy crisis in many decades, with supply chains seizing up and products made from or with oil and gas (notably fertilizers) suddenly becoming scarce and expensive. Scylla, therefore, calls out: “Drill more. Lift sanctions on Venezuela and Iran. Beg Saudi Arabia to increase output.” But if we go that route, we only deepen our dependency on fossil fuels, aggravating the climate monster Charybdis.
The IEA was created in the aftermath of the 1970s oil shocks to inform policymakers in times of energy supply crisis. The agency recently issued a 10-point emergency plan to reduce oil demand and help nations deal with looming shortages owing to Russia’s invasion of Ukraine. Its advice includes lowering speed limits, instituting car-free Sundays, encouraging working from home, and making public transport cheaper and more widely available.
All of these are good suggestions—and are very similar to what my colleagues and I have been advocating for nearly 20 years (some were even part of U.S. energy policy 50 years ago). Fossil fuel supply problems shouldn’t come as a surprise: we treat these fuels as though they were an inexhaustible birthright; but they are, of course, finite and depleting substances. We have extracted and burned the best of them first, leaving lower-quality and more polluting fuels for later—hence the recent turn toward fracked oil and gas and growing reliance on heavy crude from Venezuela and “tar sands” bitumen from Canada. Meanwhile, rather belatedly, it has gradually dawned on economists that these “unconventional” fuels typically require higher rates of investment and deliver lower profits to the energy industry, unless fuel prices rise to economy-crushing levels.
Indeed, it’s as though our leaders have worked overtime making sure we’re unprepared for an inevitable energy dilemma. We’ve neglected public transportation, and many Americans who are not part of the white-collar workforce have been pushed out from expensive cities to suburbs and beyond, with no alternative other than driving everywhere. While automakers have turned their focus to manufacturing electric vehicles (EVs), these still account for a small fraction of the car market, and most of today’s gas-guzzling cars will still be on the road a decade or two from now. Crucially, there are as yet only exploratory efforts underway to transition trucking and shipping—the mainstays of global supply chains—and find more sustainable alternatives. That creates a unique vulnerability: the current worldwide diesel shortage could hammer the economy even if the government and the energy industry somehow come up with enough gasoline to keep motorists cruising to jobs and shopping malls.
Then there’s the issue of the way fossil fuels are financed. They’re not treated as a depleting public good, but as a source of profit—with investors either easily enticed to plunge into a passing mania or spooked to flee the market. Just in the past decade, investors have gone from underwriting a rapid expansion of fracking (thereby incurring massive financial losses), to insisting on fiscal responsibility, while companies are now milking profits from high prices and buying back stocks to increase their wealth. Long-term energy security be damned.
Meanwhile, the climate monster stirs fitfully. With every passing year, we have seen worsening floods, fires and droughts; glaciers that supply water to billions of people melting; and trickles of climate refugees threatening to turn into rivers. As we continue to postpone reducing the amounts of fossil fuels we burn, the cuts that would be required in order to avert irreversible climate doom become almost impossibly severe. Our “carbon budget”—the amount of carbon we can burn without risking catastrophic global warming—will be “exhausted” in about eight years at current emission rates, but only a few serious analysts believe that it would be possible to fully replace fossil fuels with energy alternatives that soon.
We need coherent, bold federal policy—which must somehow survive the political minefield that is Washington, D.C., these days. Available policies could be mapped on a coordinate plane, with the horizontal x-axis representing actions that would be most transformative and the vertical y-axis showing what actions would be most politically feasible.
High on the y-axis are actions like those that the Biden administration just took, to release 1 million barrels a day of oil from the strategic petroleum reserve and to invoke the Defense Production Act to ramp up the production of minerals needed for the electric vehicle market. While politically feasible and likely popular, these efforts won’t be transformative.
An announcement by President Joe Biden of an ambitious energy-climate vision, with the goal of eliminating our dependence on foreign fuel sources and drastically reducing carbon emissions by the end of the decade, would probably fall somewhere in the middle, where the x- and y-axes meet. Such a vision would encompass a four-pronged effort being proposed by the government:
+ Incentivizing massive conservation efforts, including “Heat Pumps for Peace and Freedom” and providing inducements for businesses to implement telework broadly.
+ Directing domestic production of fossil fuels increasingly toward energy transition purposes (for example, making fossil fuel subsidies contingent on how businesses are growing the percentage of these fuels being used to build low-carbon infrastructure).
+ Mandating massive investments in domestic production of renewables and other energy transition technologies (including incentives to recycle materials).
+ Providing an “Energy Transition Tax Credit” to households or checks to offset energy inflation, with most of the benefits going to low-income households.
Ultimately, some form of fuel rationing may be inevitable, and it is time to start discussing that and planning for it (Germany has just taken the first steps toward gas rationing)—even though this would be firmly in the x-axis territory. Rationing just means directing scarce resources toward what’s vital versus what’s discretionary. We need energy for food, critical supply chains and hospitals; not so much for vacation travel and product packaging. When people first hear the word “rationing,” many of them recoil; but, as author Stan Cox details in his history of the subject, Any Way You Slice It, rationing has been used successfully for centuries as a way to manage scarcity and alleviate poverty. The U.S. SNAP (food stamp) program is essentially a rationing system, and all sorts of materials, including gasoline, were successfully rationed during both world wars. More than two decades ago, the late British economist David Fleming proposed a system for rationing fossil fuel consumption at the national level called Tradable Energy Quotas, or TEQs, which has been discussed and researched by the British government. The system could be used to cap and reduce fossil fuel usage, distribute energy fairly and incentivize energy conservation during our transition to alternative sources.
Also, we need to transform the ways we use energy—for example, in the food system, where a reduction in fossil fuel inputs could actually lead to healthier food and soil. Over the past century or so, fossil fuels provided so much energy, and so cheaply, that humanity developed the habit of solving any problem that came along by simply utilizing more energy as a solution. Want to move people or goods faster? Just build more kerosene-burning jet planes, runways and airports. Need to defeat diseases? Just use fossil fuels to make and distribute disinfectants, antibiotics and pharmaceuticals. In a multitude of ways, we used the blunt instrument of cheap energy to bludgeon nature into conforming with our wishes. The side effects were sometimes worrisome—air and water petrochemical pollution, antibiotic-resistant microbes and ruined farm soils. But we confronted these problems with the same mindset and toolbox, using cheap energy to clean up industrial wastes, developing new antibiotics and growing food without soil. As the fossil fuel era comes to an end, the rules of the game will change. We’ll need to learn how to solve problems with ecological intelligence, mimicking and partnering with nature rather than suppressing and subverting her. High tech may continue to provide useful ways of manipulating and storing data; but, when it comes to moving and transforming physical goods and products, intelligently engineered low tech may offer better answers in the long run.
Further along the x-axis would be the daring action of nationalizing the fossil fuel industry. But at the very farthest end of the x-axis is the possibility of deliberately reining in economic growth. Policymakers typically want more growth so we can have more jobs, profits, returns on investment and tax revenues. But growing the economy (at least, the way we’ve been doing it for the past few decades) also means increasing resource extraction, pollution, land use and carbon emissions. There’s a debate among economists and scientists as to whether or not economic growth could proceed in a more sustainable way, but the general public is largely in the dark about that discussion. Only in its most recent report has the Intergovernmental Panel on Climate Change (IPCC) begun to probe the potential for “degrowth” policies to reduce carbon emissions. So far, the scorecard is easy to read: only in years of economic recession (such as in 2008 and in 2020) have carbon emissions declined.
In years of economic expansion, emissions increased. Policymakers have held out the hope that if we build enough solar panels and wind turbines, these technologies will replace fossil fuels and we can have growth without emissions. Yet, in most years, the amount of increased energy usage due to economic growth has been greater than the amount of solar and wind power added to the overall energy mix, so these renewable sources ended up just supplementing, not displacing, fossil fuels. True, we could build turbines, panels and batteries faster; but, as long as overall energy usage is growing, we’re continually making the goal of reducing our reliance on fossil fuels harder to achieve.
Wouldn’t giving up growth mean steering perilously close to the Scylla of economic peril in order to avoid the Charybdis of climate doom? So far, we’ve been doing just the reverse, prizing growth while multiplying climate risks. Maybe it’s time to rethink those priorities. Post-growth economists have spent the last couple of decades enumerating the ways we could improve our quality of life while reducing our throughput of energy and materials. Policymakers must finally start to take these proposals seriously, or we will end up confronting the twin monsters—economy-crushing fossil fuel scarcity and devastating climate impacts—without prior planning and preparation.
It was always clear that we would eventually have to face the music with regard to our systemic economic dependency on depleting, polluting fossil fuels. We have delayed action, making both the economic challenge and the climate threat harder to manage. Our possible navigation channel between Scylla and Charybdis is now perilously narrow. If we wait much longer, this channel will vanish altogether.