Regulations and markets are made for man, not man for regulations and markets.
By now temperatures have risen and the immediate crisis in Texas has passed. Five members of the state’s Electric Reliability Council (ERCOT) are resigning; they do not even live in Texas. Ted Cruz is out a vacation, an optics lesson learned at least, maybe. But until the cascade of incidents and decisions that left millions of Texans abandoned to the cold without power and water is studied and learned from, the real crisis remains. Despite ERCOT’s name, or that of boards like it across the country, our infrastructure is not reliable. Not built for resilience, the postwar American grid was misbegotten in an ongoing tryst between efficiency and regulation for its own sake.
The two had a nice Valentine’s Day. ERCOT sent the Biden Department of Energy a letter on Feb. 14 requesting permission to set aside certain environmental permit limits on power generating facilities, in anticipation of the increased need for electricity and decreased output efficiency the winter weather event would cause. “This request is narrowly tailored to allow only the exceedances that are necessary to ensure reliability over the next few days,” it assures the DOE, and goes on to detail the ways any excesses of emissions standards would be monitored and reported.
The DOE granted the allowance, but its letter too highlights the tension between reliability, regulations, and market forces. The DOE ordered that when sufficient emergency conditions were reached as assessed by ERCOT, then certain generators could operate above regulated capacity: “This incremental amount of restricted capacity would be offered at a price no lower than $1,500/MWh.” Moreover:
All entities must comply with environmental requirements to the maximum extent necessary to operate consistent with the emergency conditions. This Order does not provide relief from an entity’s obligations to purchase allowances for emissions that occur during the emergency condition or to use other geographic or temporal flexibilities available to generators.
The narrowly tailored request for an ease of permit restrictions was granted as one of last resort. In a way I’m sure it worked, and some degree of excess emissions were minimized considering the situation, with plenty of offsets and even power bought from out of state. But it’s hard to imagine that the way things went down felt like much of a success from the perspective of residents of Houston or Austin, with sustained power outages and the possibility of enormous electricity bills. That five members of the ERCOT board are resigning doesn’t seem like an endorsement of how things went down either.
“And he said unto them, ‘The sabbath was made for man, and not man for the sabbath.’” We should want our energy grids to be reliable, environments to be protected, and markets to be efficient, because of human beings. Indeed, reliability is a way of describing the limiting factor on those second two ends: We prevent emissions up to the point that regulation stops people from heating their home in subfreezing weather; we let market forces shape electricity supply up to the same point. Of course, in this case, it looks like enormous price increases in response to demand were tied more to exceedance of green standards, written into the order, than to actually limited supply. That’s putting the permit system before the citizens on whose behalf the emissions are regulated. Will five days of some power plant running at 100 percent capacity emit more pollutants than thousands of unused fireplaces and basement generators suddenly being lit? I don’t know. But I do know air quality in America has never been better in living memory, and I wonder what the point is of having cleaned up the air if you can’t fudge it for a few days—so people can keep the lights on!—without making it too complicated?
Part of the problem is that a place like the DOE or EPA necessarily has to pretend at a certain point, for the sake of its own existence as a national regulator setting national standards, that every place is pretty much the same. It’s the American environment, American air, American energy. But reliability is found in a system’s resilience; the bigger the system you’re looking at or working with, the more tenuous the threads tying it all together, the more complex the interplay, and the less predictable the ripple effects. There’s a fragility to big machines of many moving parts. Remember early COVID supply chain disruptions? Remember fuel shortages at the whims of OPEC? The local, on the other hand, can be comprehended and directed, can respond quickly with fewer conflicting interests and a clearer hierarchy of priorities. This is a tension at the heart of American energy and environmental policy: the local vs. the national, the dependable vs. the clean.
When we desire to preserve the environment, and thus to regulate human behaviors to that end, we desire to prevent a change for the worse, or to enable change for the better. Thus, we are guided by some idea of better and worse, and thus of a good to which we aim. Politics is the conflict over this good, the setting of opinions about it in contest with each other. It is a prudential matter, limited and contextual. But human beings have generally agreed that it is aimed at something we might call human flourishing. The great danger of the debate over environmental and energy policy today is that we forget, as Protagoras said, that “man is the measure of all things: of the things that are, that they are, of the things that are not, that they are not.” The weather is cold because we are cold. The lights are off because we cannot see them.