California’s Energy Grid Is a Mess. Here’s How to Fix It.

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As California continues to push for so-called green energy policies, its energy grid is suffering.

Residents of the Golden State have been forced to deal with rolling blackouts on top of skyrocketing energy prices. But how much of this energy crisis may be laid at the feet of California’s government, and how much is out of the state’s control?

Katie Tubb, a research fellow at the Center for Energy, Climate, and Environment at The Heritage Foundation, joins “The Daily Signal Podcast” to discuss the biggest energy issues facing California residents—and what can be done to fix them.

Listen to the podcast below or read the lightly edited transcript:

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Doug Blair: My guest today is Katie Tubb, a research fellow at the Center for Energy, Climate, and Environment here at The Heritage Foundation. Katie, welcome to the show.

Katie Tubb: Thanks, Doug, for having me on.

Blair: Well, I wish we could talk about something pleasant, but California is going through a pretty brutal energy crisis right now. And it seems like a lot of it is kind of on them. They almost did this to themselves. But I’m curious, how much of this crisis is due to government policies and how much is this is out of the government’s hands?

Tubb: Well, it definitely is a combination of both, but I think what we’re seeing is the natural consequence, I’ll put it that way, of years and years of policy. And the big question here is, is California’s hyper-politicized grid up to the challenge of things like drought and high temperatures? Which are the natural course for California, which is a very arid state.

So the question is, have these policies strengthened California’s ability to deal with what is the inevitable in an arid region? And that’s pressure on the grid due to weather.

I think we’re seeing now, as we have for several years, that the answer’s very much “no.” But that’s all to say it’s a combination of both those things there that you mentioned, that a lot of this is in the hands of policymakers. Some of it, like the weather, is not. But that’s what, I think, policymakers always need to have in the back of their minds when they’re pushing certain policies. Does this make us more robust and able to handle pressures in the future, or are we making our energy system more and more fragile?

Blair: And it seems like California actually is going in the direction where it’s becoming more fragile. They continuously are pushing for policies, like, for example, the banning of gas-powered vehicles by 2035 and replacing them with almost electric vehicles. Will those types of policies exacerbate the issues we’re seeing in California right now?

Tubb: Yeah. You can’t make this stuff up. The same week that California bans, for the long-term, the sale of new internal combustion engines, you’re also getting extreme pressure on the grid, which is exactly what these policies are exacerbating even more.

So it’s just like, the timing is incredible to me, and certainly instructive for the rest of us as we look to policy in our own states and at the federal government.

I think it’s certainly instructive for the Biden administration, which is pushing very similar California-esque vehicle policies through the [Environmental Protection Agency] and the Department of Transportation, and trying to nationalize California’s policy for the rest of us.

It begs questions about the wisdom of that. And I would say California is showing us that it’s very unwise and exacerbating problems that will impact the lives of Americans on a very regular day-to-day basis.

Blair: Well, that’s a good point because it doesn’t seem like it just sticks to California. I mean, these policies have implications that affect the rest of the country. How do California’s energy policies impact the other 49 states?

Tubb: Well, certainly, the states closest to California are hit the most and maybe the hardest because California is a major energy consumer. And so, those markets closest to California are impacted. I think a really good illustration of that is with electricity.

So, California is the nation’s largest importer of electricity. And California has relied on electricity from Washington, Oregon, Nevada, Arizona. Certainly, that’s becoming more challenging as these states also face weather and drought situations, and California can’t rely on that.

But then there’s also this aspect of—we’ll use the example of vehicles. Under the Clean Air Act, the Biden administration has allowed California a waiver to hold higher standards, more stringent standards than the EPA, and it also allows other states to hop on California’s bandwagon.

And so, you get this patchwork system that is quite harmful because, in the end, it basically means California’s Clean Air Act standards become the de facto national standard.

And I’ll also just add that, politically, under this current administration, President [Joe] Biden and his regulatory army are using a lot of California’s policies and bringing it into a national arena. So, California has been the test dummy that this administration prefers and is therefore trying to make California’s state energy and climate policies something that we all have to live under.

Blair: Speaking of standards and what we’re looking at as what will be the standard for America, during a recent hearing by the California Air Resources Board, board member Hector De La Torre said that he preferred California align its electric vehicle mandates with Europe than with states like Texas. So, this has a two-pronged question attached to it. First of all, what is that other alternative? What is Texas doing to handle its energy issues that California maybe isn’t?

Tubb: Well, that’s a complicated question because—

Blair: Always my favorite.

Tubb: Right. Well, Texas has had its own problems, … problems with their grid, I should say. And I think a lot of that has to do with California-like policies.

Texas itself subsidizes a lot of wind energy and they’ve faced the consequences of that. They’ve created fragility in their own grid. We saw that certainly a couple winters ago when we saw those terrible Texas blackouts. So, Texas does a lot of things right. They don’t do everything perfectly.

When it comes to vehicles, Texas is pursuing, I think, a much more free market approach to vehicles, which is, let the consumer decide what they want to drive.

California, through these Clean Air Act regulations, through huge subsidies, and then demands on manufacturers, are pushing consumers to basically one kind of vehicle, and it’s an electric or zero-emission vehicle. They’re on the way out for internal combustion engine.

So, California is using carrots and sticks on producers and consumers to force them in one direction and one purchasing choice. And in that sense, there is quite a difference between California and Texas.

Blair: Well, I mean, that’s an interesting point because it doesn’t sound like it’s a red state versus blue state issue if even Texas is doing things that are similar to how California’s doing it.

Tubb: Yeah. The grid and grid policy is quite speckled across the United States. You can look at regions like the Northeast, which look a lot like California. And then you can look across the Midwest and see lighter versions of what we’ve seen in California and the Northeast. Lighter meaning smaller mandates or fewer subsidies.

And I like to call these bumper-sticker policies because everybody likes the sound and the idea of, “Hey, let’s have … 30% renewables by 2030. Easy to remember. It sounds exciting.” But there’s huge consequences to that because it doesn’t take into account things like affordability, reliability, will we have electricity this summer? Those kinds of questions. And that’s what I think should be driving policy when it comes to the grid.

Unfortunately, many, many states have drunk the Kool-Aid, and drunk the Kool-Aid 10 years ago, when it comes to these bumper-sticker policies.

Blair: Right. Going back to what we were discussing before then, California cited Europe as maybe the model that they should be focusing on as opposed to places like Texas or some other red states. Should Europe be the model? Would we look across the Atlantic to say that’s what our energy policies should be like?

Tubb: It is very hard for me to take that comment or that aspiration seriously because if you look at what’s happening in Europe right now, it is verging on implosion when it comes to energy.

I think energy, for a lot of people, sounds like just something we don’t think about often. But if you think about your day-to-day, almost every step for you to get to work, or to school, or to run an errand, to engage in a meeting, to open the fridge to eat your breakfast, it involves energy.

And what we’re looking at in Europe right now is heating and electricity prices that are literally 102% higher than they were last year. And it’s because they’ve pursued policies like Europe, for the better part of, I would say, three decades, such that their grid, their energy infrastructure is incredibly fragile and incredibly reliant on countries like Russia because they haven’t been able to meet demand over the last couple decades because of restrictions they’ve put on things like coal, oil, natural gas, and nuclear, such that now they have no options. And the options that they have are very expensive and will take many years to recover what’s been lost over these last roughly three decades.

They’re really looking at an energy poverty crisis, not just for big industrial users, but for the average family in Europe. And I look at that situation and think, “How in the world is that a model to follow?” And instead, that is a model to avoid as hard and as fast as we can.

Blair: Some of the things that we are seeing as proposed solutions are reactivating, say, nuclear plants, or at least renewing the contracts of nuclear plants to extend their operational life. So, last week, lawmakers approved legislation in California to extend the operational life of the last nuclear power plant in Diablo Canyon. Was this a positive move? Do you see this as a positive development?

Tubb: Absolutely. It’s unfortunate that it had to happen this way, and I say that because Diablo Canyon was and is an outstanding provider of electricity. I mean, it provides roughly 8% or 9% of the entire state’s electricity.

The reason it was going out the door and starting efforts to close, if you look at the very bureaucratic documentation from the last roughly 10 years for the plans with Diablo Canyon, it has everything to do with California’s policy goals for the grid. Namely, that solar power mandates forced Diablo Canyon to scale down its operation and become, basically, uneconomic. So, it’s an entirely self-inflicted wound that Diablo Canyon was starting to close down.

And now, the state, as you said last week, passed a measure to extend the power plant’s license, but it will cost the state a $1.4 billion loan backed by their taxpayers. And it did not have to be that way.

So, I think, yes, it is incredibly positive, and I am very surprised that the state did a U-turn on their nuclear policy and have allowed Diablo Canyon to move forward, but it didn’t have to be that way. And that’s what I find unfortunate about it.

But it’s not just Diablo Canyon. We could go down a whole list of, I think, policy reforms that California should consider, and I think would be informative for the rest of the country.

But it’s things like natural gas pipelines. The attorney general in California is opposing a natural gas pipeline from Canada. At the same time, they’re trying to force more things onto the grid and relying on more natural gas. So you’ve got this conflicting policy posture here.

We’ve talked about the vehicles and regulatory mandates to get rid of internal combustion engines, but you could also talk about things like energy production. California’s incredibly energy-rich when it comes to oil and natural gas, and yet, also last week, this state passed legislation increasing regulatory burdens on oil and gas wells to basically, or with the intent of phasing them out.

The list, I think, is very long of reforms that mostly have to do with the ideas of let consumers choose and let’s reduce regulatory barriers on the energy sector because I think that’s essential to human well-being and flourishing here. And that should be the ultimate goal of policy. What achieves that goal?

Blair: One of the questions too that pops up is, what is the cost benefit versus what you’re getting out of it? So, for example, it sounds like the way that California goofed here was that they paid way more to extend the life of this particular nuclear plant than they could’ve. Does that mean then that there are certain policies that they could put in place now that would still be really expensive but would at least pull back from the catastrophic energy crisis that we are starting to see form?

Tubb: Well, I think the couple things I just listed off are not expensive at all. They’re about reducing barriers to access energy.

It doesn’t cost a whole lot to allow oil and gas producers to risk their own money to invest in oil and gas production and associated infrastructure. It doesn’t cost the taxpayer a whole lot of money to allow a natural gas pipeline to be built by, again, a private company.

So these are regulatory barriers that I think are causing what I would call this fragility of California’s energy sector, whether we’re talking about electricity, heat, or transportation fuel.

And it’s the same with Diablo Canyon. It would not have cost the California taxpayer money for Diablo Canyon to continue their license because, again, they’re a private company.

So I think what we’re now seeing is taxpayers are on the hook for quite a lot in California. It’s because they’re adding so much political risk to the system.

Blair: OK. I guess, to that point as well, one of the things about California is that, … as somebody from the West Coast, it does pride itself on having this visionary expansionist view of how we’re going to fight for the future of the planet and all this climate change stuff.

In a state like that, what are some of the policies that we could pass maybe today that would be acceptable to the crowd that has this desire for green energy but would prevent some of the worst impulses of a government that seems hell-bent on making sure the electrical grid doesn’t work?

Tubb: Well, I think a couple things here. One, you could go right to nuclear energy. No matter what you think about global warming, nuclear energy provides a whole lot of power for a very small footprint and no emissions of traditional pollution or greenhouse gases. I mean, that’s a surefire answer for meeting consumers’ needs and I think being a good steward of the environment. There’s a lot California could do there.

Certainly, they could lift their ban on new nuclear power plants. I think the Diablo Canyon was a great decision, and I’m glad to see that plant have more lifeline. I wish, or I hope, that California would give it a much longer lease than five years, which is what they currently have extended that license extension to.

But I would also question the premise of your question, which is, all of these policies that California is pushing, these “visionary policies” are premised on the understanding of climate and global warming being an emergency. We don’t need to go into that. That’s a much longer conversation. But whether or not that is the case, it does not matter what California does or doesn’t do. California’s greenhouse gas emissions will not change global temperatures by the end of the century.

So, you’re talking about a very costly system, not just in terms of dollars, but also in terms of how Californians live their daily lives and their relationship to their government for, basically, no climate benefit. And that, I think, deserves a very robust conversation about climate policies that are very expensive and have no impact.

And then, I think the last thing I’ll say about the premise of your question, Doug, is, I think California has tried to make the case that greenhouse gas emissions should be the primary drivers of energy policy, electricity policy. I wholeheartedly disagree with that.

And I think we’re seeing the consequences of that right now, that when you focus your energy policy on one aspect, greenhouse gas emissions, you’re totally ignoring things like reliability, affordability, consumer access, energy poverty. These are the kinds of things that I think should be informing California’s energy policy, instead of this very narrow-minded approach, which is centered around greenhouse gas emissions.

Blair: Well, that’s a lot to think about. And I think that it’s important for us to note that these are very multifaceted questions and there are very multifaceted answers as well. That was Katie Tubb, a research fellow at the Center for Energy, Climate, and Environment here at The Heritage Foundation. Katie, very much appreciate you coming on. Thanks so much.

Tubb: Yeah. Thanks, Doug.

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