Published on August 13, 2020 in Bloomberg Law
America’s energy industry is experiencing a wild ride this year courtesy of the Covid-19 pandemic and significant, recent legal and regulatory outcomes, legal challenges to large pipeline projects, and the modernization of the National Environmental Policy Act (NEPA). As America seeks options for a sustainable economic recovery, these developments provide a glimpse into the future of our domestic energy industry.
Widespread lockdowns caused consumer demand for gasoline to plummet and put the resilience of our electric grid to the test. The energy industry rose to the challenge by providing critical resources vital to our on-going fight against a viral enemy in this once-in-a-generation global emergency.
Industry Pivots to Help Covid-19 PPE Shortage
The domestic fossil fuel industry showcased its role in a low-carbon future as a provider of chemicals for manufacturing rather than simply a provider of fuel for combustion. Chemicals produced by the fossil industry through the extraction and refining processes are integral to the production of hand sanitizer, gloves, masks, gowns, and more. In this way, the industry proved itself a critical link in the supply chain for the procurement of equipment such as the PPE necessary to fight the pandemic.
Exxon Mobil’s Baton Rouge facility responded immediately by pivoting and ramping up its production of isopropyl alcohol, the key ingredient in hand sanitizer. The company increased production of the chemical enough to fill the equivalent of an additional 50 million bottles of hand sanitizer a month. Later, it responded to New York Gov. Andrew Cuomo’s request for help with supplies despite the state’s recent failed litigation against the company. The company then partnered with Boeing in an effort to develop a manufacturing process that produces 10,000 face shields an hour.
The single-use plastics and disposable disinfectant wipes that many rely on to guard against infection cannot be made without ingredients supplied by the same processes that give consumers gasoline. Plastic bag bans and taxes, once en vogue, were suspended in Albuquerque and Denver. These Western cities determined that the availability of single-use and often recyclable plastic bags was important to preventing the spread of the virus.
Likewise, the plexiglass and acrylic shields many retail businesses are installing for their check-out stations are made from materials that start as oil and gas. Whether or not the long-term future involves combustion of fossil fuels, the fossil industry’s chemicals business proved an unsung hero in the fight against Covid-19 and will play an increasingly important role in the industry’s future.
Renewables Meet Electricity, Health-Care Demands
Due to shifts in electricity demand, the renewables industry is showing its contributions to a resilient and sustainable grid during this national crisis. Renewables set a new record when they powered more of America than coal for 90 days during the first four-and-a-half months of 2020, when we had reached the pinnacle of the disease. Even Kansas, home state to the climate skeptic Koch brothers, saw wind overtake coal as a generation source during the pandemic this April.
Discontent to stick to providing clean and reliable energy, renewables also played their part by contributing to manufacturing health-care supplies. Wind energy leader Alliant Energy partnered with Iowa State University to manufacture face shields for healthcare workers. It’s worth noting that American wind turbines cannot run without lubricants produced by the chemicals sector of the American fossil industry.
NEPA Updates Needed
This is where the recent pipeline cancellations and streamlining of NEPA become developments that illuminate our path to a sustainable future post-Covid-19. The recently announced reforms should mean that critical infrastructure projects will be permitted and constructed in a timely fashion. Whether you prefer a Green New Deal or a Green Real Deal, neither can be accomplished without this update to the NEPA.
NEPA, originally intended to require environmental review of certain federal projects, takes an average of 5.8 years and $4.2 million for the review process to complete, according to the EPA and the Council for Environmental Quality. That’s a long time to wait for a permit to construct the more efficient and renewable infrastructure we need immediately to confront the challenges of climate change.
In the past, the NEPA held up more conventional projects, such as pipelines, but the major renewable energy and adjacent infrastructure we need to deploy now to reduce carbon emissions were being stalled or blocked by the old, lengthy, costly NEPA review process, too.
The Cape Wind Energy Project in Nantucket Sound promised to slash carbon emissions by 1.6 million metric tons a year, for example, but was delayed for 16 years and ultimately canceled. The cancellation occurred, in part, because of the antiquated permitting and review process that was abused by wealthy landowners seeking to protect their property views—not the environment.