Colder temperatures are just around the corner in Europe as many people there brace for an energy crisis this winter.
“Well, the latest is that temperatures are dropping in Europe, prices of electricity and other heating fuels have quadrupled, and it’s very difficult for people to afford these high prices,” says Diana Furchtgott-Roth, director of the Center for Energy, Climate, and Environment at The Heritage Foundation. (The Daily Signal is the news outlet of Heritage.)
“We’ve had Benny Peiser, who’s head of the Global Warming Policy Foundation, come and speak at Heritage, and he told us that prices in Britain were four times what they had been in previous years,” Furchtgott-Roth says. “The government is putting a cap on these prices, so people are not feeling the full effect of the prices until April, but it’s very difficult for everybody.”
Furchtgott-Roth joins “The Daily Signal Podcast” to discuss more about the energy crisis in Europe, how the U.S. can avoid landing in a similar position, and how Europeans can conserve energy this winter.
Listen to the podcast below or read the lightly edited transcript:
Samantha Aschieris: Diana Furchtgott-Roth is joining the podcast today. She’s the director of the Center for Energy, Climate, and Environment at The Heritage Foundation and former acting secretary for economic policy at the Treasury Department. Diana, thanks so much for joining us.
Diana Furchtgott-Roth: It’s wonderful to be with you, such an honor to be on your podcast.
Aschieris: Of course, thank you. We are going to dive right in here. Now, while it’s not officially winter just yet, it certainly feels like it as temperatures drop and the holiday season rapidly approaches. We’ve seen various headlines about Europe’s energy crisis this winter. What’s the latest on it?
Furchtgott-Roth: Well, the latest is that temperatures are dropping in Europe, prices of electricity and other heating fuels have quadrupled, and it’s very difficult for people to afford these high prices.
We’ve had Benny Peiser, who is head of the Global Warming Policy Foundation, come and speak at Heritage, and he told us that prices in Britain were four times what they had been in previous years. The government is putting a cap on these prices, so people are not feeling the full effect of the prices until April, but it’s very difficult for everybody.
Aschieris: You just brought up a really incredible number, a jaw-dropping number. Prices are four times what they’ve been in the past. How did Europe end up in this position in the first place?
Furchtgott-Roth: So, Europe has been focusing on producing renewables and scaling down conventional fuels, and this kind of worked fine until the Russians decided to cut off the supply of natural gas. When the Russians cut off the supply of natural gas, which was a major component of clean fuel, then prices just skyrocketed because there was not the reliability and resilience of conventional fuels to be there.
So countries were closing their nuclear power plants, phasing out coal, and trying to go for solar and wind. Well, solar works fine when the sun shines and wind works fine when the wind blows, but right now we don’t have enough storage capacity to store energy from those sources when the sun isn’t shining and the wind isn’t blowing.
That’s why, for these solar and wind farms, we need associated backup natural gas power plants, because what happens is the natural gas power plant kicks in when the sun stops shining or when the wind stops blowing so people have a continuous flow of energy and they don’t have blackouts.
Aschieris: Yeah, I wanted to also, just along the same lines of how Europe ended up in this position, how can we here in the United States end up getting into a similar situation, or hopefully never, but a worse situation than what we’re seeing in Europe right now?
Furchtgott-Roth: We are very fortunate here in the United States that we have vast reserves of oil and natural gas, and we should focus on using those. We should focus on developing pipelines that bring those fuels not just to where they are needed here in the United States, but also to the coast so we can export them and help Europeans who also need these fuels.
We hear a lot about the transition to net-zero 2050, I think net-zero 2050 is a little bit like Santa Claus or the Tooth Fairy, and I’ve given talks along those lines, that it isn’t going to happen because we cannot use wind and solar, which are not reliable, to power all the energy that we need here in the United States.
Battery electric vehicles are described as zero emissions, but they have to be run with electricity, which has to be generated somehow, and wind and solar just do not produce enough electricity to do that.
So we can avoid going the way of Europe if we keep focusing on our oil, our natural gas, our coal, which we also need for the reliability and resilience of our electricity grid, and we need to make sure that we always have those fuels as a backstop for when the wind stops blowing and the sun doesn’t shine.
Aschieris: What are some ways that Europeans can cut down on their energy use and reduce costs this winter?
Furchtgott-Roth: Well, there have been so many examples in the press about how people are trying to keep their thermostats low, they’re putting on more sweaters, they’re doing all these innovative things to keep warm, but it’s just not very comfortable that way.
And what’s more harmful, other than just being a little bit cold in your house and turning off lights, what’s more harmful is that energy-intensive manufacturing is leaving Europe in search of places that are less expensive.
And we hear, and we can document, that some German manufacturers are coming from Germany to the United States. One survey found that nearly 25% of Germany’s small and medium-sized businesses are considering or actually relocating parts of their operations to another country, and that means lost jobs.
So it’s one thing to turn down your thermostat, it’s quite another thing if your employer lays you off because the electricity is too expensive to continue those operations.
Aschieris: Wow, that is really shocking. I actually didn’t know that. So that’s a pretty big impact on the economy, whether you’re losing your job and then you can’t afford to keep up with the energy costs. That’s really shocking.
I wanted to also ask you about something that the U.S. actually did recently, sending liquified natural gas to Europe. Can you talk more about what impact this could have for Europe? Will it give them any relief? And do you anticipate that we will continue doing that moving forward?
Furchtgott-Roth: We have substantial potential to send natural gas to Europe, and that would lower their energy prices. And we find that there are gas fields that are being newly discovered or newly put into operation that are sending natural gas to Europe.
We really need to have more pipelines here. And unfortunately, here in the United States, we’re working in the opposite direction.
So, we have the Federal Energy Regulatory Commission, which is slowing down approval of pipelines. We have the Securities and Exchange Commission, which is looking at climate risks of projects done by different companies, potentially downgrading these projects, including building more energy facilities and pipelines. We have The Office of the Comptroller of the Currency that’s put in a climate risk officer to look at whether banks are lending too much for natural gas, coal, oil. And we are not placing the priority on developing the resources that we could.
And by making it more difficult to manufacture or develop energy here in this country, we’re requiring these companies to go offshore. And these companies then go to China or India where production is more dirty and the global emissions are higher.
So if we want to reduce global emissions, we want more production here in this country and we want to discourage our companies from offshoring to places where production is done in a more dirty way and where there are more emissions released for every manufactured good.
Aschieris: Yeah, absolutely. And just speaking of pipelines, The Associated Press reported on Friday that France, Spain, and Portugal actually agreed to build a hydrogen pipeline by 2030. More specifically, the project will connect two plants in Portugal and northern Spain, and that’s just part of the reporting from The Associated Press. So can you tell us a little bit more about the potential impact of this hydrogen pipeline and what we can expect, in your opinion, in the near term and then also in the years closer to 2030?
Furchtgott-Roth: It’s a very interesting project, and my first question was, why they are not calling it a natural gas pipeline? Why they’re not using it to move more natural gas, which is a much more commonly used, less expensive fuel? And then I read the details and apparently it will be used to transport some natural gas, especially in the early years after it’s completed, that must be the early 2030s.
Again, we see that this is being subsidized by the EU. This isn’t a private project. The EU is going to pay about half the costs. It’s going to cost about $2.6 billion. But it seems like Europe is not focusing on the most useful fuels. Why aren’t they just doing this for natural gas, for example? Why aren’t they proposing more nuclear plants or bringing back some of the nuclear plants that they have closed?
Nuclear power is emissions-free. If we want emissions-free energy, nuclear is a concentrated, dense source of energy. We’ve had nuclear-powered submarines for the past 60 years. We have had no accidents with those. So it’s a safe form of fuel and new technology is being developed all the time to make it even safer.
Aschieris: Now, just one final question before we go. Just recently, as well, a lot of news relating to energy, we had Chevron basically getting the go-ahead to pump oil in Venezuela after the Treasury Department eased some sanctions there. What is your reaction to this move by the Treasury Department and do you think that we’ll see some relief here in the United States?
Furchtgott-Roth: First of all, we produce oil here in the United States. We don’t need to be asking Venezuela for oil. We don’t need to be asking Saudi Arabia. We could perhaps ask our ally Canada, which has the same kind of oil as Venezuela, which is called heavy crude, sour crude, and it’s brought to be refined in our refineries. We have a very sophisticated refinery system.
So I think it is just amazing that President [Joe] Biden would ask for oil from Venezuela, which is allied with Russia and China, rather than asking our allies to the north, Canada, to purchase oil from them. So I’m really totally against this proposal.
And I think that we should be speeding up our approvals. We could be producing a lot more here in the United States if we wanted to and we could also be including Canada, which is closer than Venezuela, produces in a cleaner manner, and is our friend.
Aschieris: Diana, thank you so much for joining us today. I really appreciate you coming on the podcast, and I’m sure we’ll have you back on for more energy-related news in the future. So thank you so much.
Furchtgott-Roth: Thanks for having me on.
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