Caruso: Geopolitics and Demand Growth Underpin Need for Commonsense Energy Policies

Writing in RealClear Energy, former EIA administrator Guy Caruso penned an op-ed outlining geopolitical chaos across the globe, arguing for commonsense domestic energy policies in order to best insulate the U.S. energy sector from its consequences. By illustrating rising U.S. energy demand and the lack of steps the Biden administration has taken to meet it, Caruso presents readers with a rational line of thought as to what must be done in order to fix this ongoing crisis.

Unfortunately for the United States, the aforementioned word used to describe our domestic energy situation is completely fitting: crisis. The sudden decrease in energy demand during the pandemic and equally as sudden increase in energy demand after has left the country in a precarious situation. This demand increase is not projected to subside soon, either.

According to a study done by GridStrategies, power demand is projected to grow by 4.7% over the next five years. This growth can be attributed to many factors, but the most likely culprits are “large load” investments. These are investments in infrastructure that may heavily affect our power grid, such as large data and manufacturing centers. In total, the United States has $630 billion in large load investments.

Additionally, as Caruso notes, the massive amount of energy Artificial Intelligence requires is also a significant contributing factor. This especially applies to generative A.I., as the computational power required to have an A.I. teaching itself is immense. According to a piece written by Vox, the energy that will be required to store all artificially generated content is expected to double by 2026.

Caruso argues that the ban on liquified natural gas (LNG) exports must be lifted. It is made clear that if the United States ever wants to progress to mainly wind and solar power, investments in natural gas must be made first. According to the op-ed, natural gas usage was able to lower U.S. emissions by a staggering 32% between 2005 and 2019.

Natural gas is not the only form of energy the Biden Administration should be focusing on, however. Caruso claims that oil exploration and production is vital, if not for the actual energy it produces, then for the jobs it creates and the foreign risk factors it prevents. According to an infographic published by the U.S. Department of Energy, the oil and gas industry provides 12.3 million Americans with steady employment.

The last step suggested by Caruso, and likely the most obvious, is to resolve the areas of “elevated risk” for America’s bulk power system, recognized by the North American Electric Reliability Corporation (NERC). This year alone NERC was able to identify serious issues across the country, residing in areas like New England, Texas, Arkansas, Louisiana, and more. While identifying the largest problem areas for the U.S. power grid, NERC also made it clear that energy infrastructure must soon catch up to our rapidly increasing demand.

The Biden administration has options to fix our country’s energy problems, they simply have not addressed them. It should go without saying that a lack of energy to keep up with demand only calls for one plan: more domestic energy infrastructure.