Editor’s Note: Ralph Izzo is chair, president and CEO of Public Service Enterprise Group Incorporated (PSEG). The opinions expressed in this commentary are his own.
Russia’s move to cut off natural gas supplies to Poland and Bulgaria, and more recently Finland, parts of Germany and potentially Denmark and the Netherlands, is just the latest salvo in its ongoing weaponization of energy for political purposes. If allowed to continue unchecked, the war in Ukraine will not only weaken geopolitical stability, but it will also worsen global warming. That’s why it makes perfect sense in the short term for the US to increase both the amount of liquified natural gas (LNG) it exports to the European Union and countries across Asia and boost its investment in carbon-free energy production.
Natural gas is an essential power source, fueling 24% of global power generation in 2020. And it’s a lot cleaner than other energy sources, like coal. In fact, in the US, nearly all the gains in emissions reductions over the past 15 years have been due to the growing use of natural gas to generate electricity in place of coal.
But many countries heavily rely on imported natural gas to fulfill demand, which can leave them struggling to make up for supply gaps. The European Union and other nations are trying to secure other sources of LNG — natural gas in a liquid state — including the US, as they try to wean themselves off Russian gas — an effort that only grew more urgent with Russia’s actions against nations like Poland, Bulgaria, parts of Germany and Finland.
That’s why the US should increase exports of LNG, which would not only improve geopolitical stability by helping to supply energy to other nations in their time of need, but also reduce global dependence on dirtier energy sources like coal. In fact, switching from coal to gas can cut greenhouse gas emissions by about half, and therefore help to decarbonize economies. With China continuing to dramatically increase coal-fired power generation, it is imperative we immediately deliver lower-carbon options and think beyond our borders and consider our role in driving decarbonization across the globe.
This does not mean we are doubling down on fossil fuel. Make no mistake, the imperative is to avoid a 1.5 degrees Celsius global temperature increase, which climate scientists agree would reduce the threat of climate disruptions and avoid a climate catastrophe. Here at home, we need to continue to ramp up our investment in carbon-free sources of energy. That’s why we must also get clean energy tax legislation through Congress — immediately.
Tax credits, in particular, will jumpstart the domestic clean energy engine by incentivizing companies to invest in clean energy resources, providing funding for agricultural programs that capture carbon, and encouraging families to buy electric cars and high-efficiency appliances like stoves and water heaters. They will shore up existing nuclear energy, which delivers 50% of our nation’s carbon-free energy today. With its skilled workforce and its existing supply chain, existing nuclear is a bridge to advanced nuclear energy, which is working to make reactors smaller and less expensive.
The tax credits will also bring greater certainty around the long-term commercial viability of large-scale renewables. By enabling deployment of capital at such a large scale, the credits will help establish a clean energy industry in this country, accelerating a robust domestic supply chain for all forms of carbon-free energy.
This is exactly what we need. China is already ahead of the United States in developing and deploying renewable sources of energy, like wind, and we are falling further behind every day. For America to become a leader in clean energy, we must invest in, develop and build out the ecosystems at home.
To be transparent, PSEG, like many utilities and energy companies, may benefit from the clean energy tax credits. The credits could help support our carbon-free nuclear energy generation and the development of offshore wind projects, and possibly boost investment in other clean energy infrastructure.
While the clean energy tax credits have already passed the House, the path through the Senate is not yet clear. Congress must act now to pass this legislation as a crucial step in addressing the double-sided coin of energy independence and the fight against climate change. And President Biden should work with congressional leaders to make it happen.
If we are to save our planet, we must produce more natural gas for export, build out our clean energy infrastructure and establish robust domestic supply chains to address the climate crisis and make sure that energy is available when we need it.
While Washington has been paying attention to this issue, we are still in need of final action. For the sake of our economy, geopolitical stability in Europe and our climate goals, it’s time to think globally about where our energy comes from, but also act locally.