By Staff
September 10, 2024
This article is adapted from an interview that energy expert Rupert Darwall conducted with Hon. Spencer Abraham at RealClear’s 2024 Energy Future Forum. Abraham is the former United States Secretary of Energy.
Rupert Darwall
Secretary Abraham, you are one of the rarest people on the planet—an energy secretary who actually understands the vital strategic and economic role of coal, oil, and natural gas.
You served as the nation’s 10th Energy Secretary from January 2001 through the entirety of President George W. Bush’s first term. During your tenure, there was a renewed policy emphasis on nuclear power—the only viable alternative to hydrocarbons as a stable, reliable, large-scale generating technology.
The first energy secretary was James Schlesinger, who served in the Carter administration. It’s fair to say that the ruling paradigm then was the opposite of energy abundance: turning down thermostats in winter and the president addressing the nation in a cardigan. The next two administrations reversed course, and oil prices began a remarkable decline over two decades as the market was allowed to function.
You took office as that decline began to reverse. Energy prices peaked during the financial crisis, and those two events are connected—a reminder that energy has consequences, both economically and for the global distribution of power. So, what was in your in-tray after you were sworn in, and what were your policy priorities?
Spencer Abraham
Well, I think that in 2001, we certainly recognized that there was an abundant opportunity to develop various sectors in the energy world, and that we needed to do it. I was actually sworn in on a day when California was dealing with rolling blackouts. So, the scarcity issue was fully upon us at the very outset of my tenure, and we had to enact a different kind of approach to address it.
Now, of course, California wasn’t exactly receptive to the notion that having more than enough power was better than having not enough power. We sort of went back and forth with them, but we did take steps that helped facilitate their addressing the issue. It opened people’s eyes to what could be coming.
Rupert Darwall
And one of those approaches was a renewed emphasis on nuclear.
Spencer Abraham
Right. We felt that the nuclear energy sector had been unfairly treated for a long time. I think we may now be entering a period in which there’s not as much resistance as we encountered back then when trying to get a few nuclear plants onto the drawing board.
But the resistance was strong, and it continues today, although it’s hard to, in my opinion, simultaneously oppose nuclear energy while also claiming that we must address climate change. I always find it frustrating to hear people scream about nuclear energy’s threats because something might happen down the road that could endanger a small number of people, and at the same time, tell us that if we don’t do something about emissions, billions will perish. But I think we’re getting on the right track now. I’m hopeful that there really will be significant growth in nuclear energy in the next decade.
Rupert Darwall
In the 20 years or so since you were energy secretary, what do you see as the major developments, both positive and negative?
Spencer Abraham
On the positive side, we’ve seen major technological changes. When I was secretary, we were concerned about the projected demand for natural gas in the United States exceeding the projected supply, and the cost of natural gas was very high.
Then, all of a sudden, new technologies, like horizontal drilling and fracking, were developed, which changed the whole landscape. Across the board, these technological advances are the most important change.
As we look ahead, I’m firmly of the view that the primary concerns people have about climate issues will be effectively addressed not by scarcity and turning down thermostats, but by technology that will change the whole landscape. So, that’s the biggest positive change.
On the negative side, the media’s embrace of almost any claim made by opponents of energy development, and their insistence on highlighting risks and threats, continues to really impede the growth we could achieve.
Rupert Darwall
In the U.S., the EPA often seems to steer energy policy. Do you see that as a big problem?
Spencer Abraham
Just to use one example we wrestled with when I was energy secretary: the issue of how to deal with nuclear waste. We had been thwarted in our efforts to build a repository for nuclear waste, even though every scientific effort we undertook demonstrated the safety of doing so.
Finally, while I was secretary, we did prevail in Congress on setting up a permanent storage site, which immediately led to an effort to challenge it in the courts. Environmental groups, having been defeated in the public arena, found another way to stop progress.
They were successful in getting a standard set that was so impossible to achieve that today we’re still sitting on ever-larger amounts of nuclear waste in casks and other storage containers, some in the largest metropolitan areas in the country. Despite what we’ve seen in terms of recycling in France and our continued operation of nuclear plants, the opposition has been ferocious and continues to be so today.
Rupert Darwall
One of the problems in producing nuclear power has been the ratcheting up of design and safety regulations. What do you think can be done about that?
Spencer Abraham
A change of leadership in Washington could partly address it, but it’s only temporary. Sooner or later, those who oppose nuclear energy return to power and try to reverse the progress made since their last time in office.
Rupert Darwall
That brings us to the other side of the ledger. Just as nuclear has been disadvantaged by those pressures, would you say there’s been complete policy capture by wind and solar-vested interests?
Spencer Abraham
We’ve seen that certain political figures, investors, and business leaders are heavily invested in and benefit from the various tax credits and subsidies given to certain industries.
If technology—whether through the development of fusion, advanced nuclear, or other methods of reducing emissions—successfully addresses the question, we would likely find ourselves facing a new threat that had been somehow ignored or under-investigated. And so, the pushback would continue. I don’t think this debate will ever end.
Rupert Darwall
What can you say about the complicity of private companies in not pushing back on the green agenda?
Spencer Abraham
Anyone who watches the advertising of major energy companies would believe that all they do is produce clean, efficient, non-dangerous energy because they want to emphasize and underscore what they’re doing to placate their critics.
In doing so, they inadvertently give greater credibility to some of the arguments these companies are trying to fight. Lately, we’ve started to see more boldness from certain energy companies challenging ESG investment philosophies in corporate governance, and I think that’s a good sign. But they have been hesitant, and I’m glad they are now doing so.
Rupert Darwall
What do you think the role of the federal government should be? We have the Inflation Reduction Act, and now the national debt has exceeded 100% of GDP. Do you think that will change the politics of production tax credits and subsidies? Given your understanding of how Congress works, will that have any impact?
Spencer Abraham
I’m skeptical. The folks on Capitol Hill are always willing to settle on laws and regulations that keep most of these tax incentives in place. If you want to move a bill through Congress, these are the sorts of tax breaks that can help drag along things that might not be quite as popular with the public otherwise. So, it would surprise me if that changed overnight.
Rupert Darwall
But do you think it’s possible it could change?
Spencer Abraham
I’m skeptical. The problem is the misunderstanding of the potential of some of these alternative energy sources. It’s fine if we have more renewable energy, but we must recognize that there’s a limit to their potential output. People falsely believe that all our problems can be solved if we simply shut down the current power plants and continue to subsidize solar, wind, etc. It just isn’t going to happen. It will not meet the demand, and then we’ll have the scarcity issues I encountered on day one of my tenure.
Rupert Darwall
Turning back to nuclear energy development, what do you see as the proper roles of the federal government and the private sector?
Spencer Abraham
It depends. I’m a free-market enthusiast, and my natural instinct is to want to see the government out of the pocketbooks of the energy sector. However, to really jumpstart the growth of nuclear energy, there may be a role for the federal government. It might work to have the federal government in a consortium with the private sector and major utilities to finance and build a fleet of new nuclear power plants—five, six, or seven new plants. This would reduce the risk factors that have impeded investment in nuclear.
If the federal government were an initial shareholder in these plants, they’d get built. Once they were built, the federal government should exit, and there’d be plenty of folks willing to take over the government’s share if you had a working and successfully regulated nuclear plant. I’m not saying that’s the best way, but I think you almost have to go down that road to get a few initial builds completed, at least for a short period of time.
The Energy Future Forum presented by RealClear
Hon. Spencer Abraham and Rupert Darwall
This article was originally published by RealClearEnergy and made available via RealClearWire.
