There Are Bigger Climate Concerns than the Mountain Valley Pipeline
It is entirely unsurprising that the ramming through of the Mountain Valley Pipeline in the debt ceiling deal generated an outcry from climate activists and their allies in Congress. This is understandable. Climate concerns aside, Senator Manchin’s ability to weasel a carve-out for his pet project in unrelated legislation is the sort of gross inside deal that makes people hate Congress.
Manchin himself is certainly no friend to future generations who will inherit a destabilized climate. But it is important to remember that the compromise legislation spared other targets — particularly the clean energy manufacturing and deployment tax credits from the Inflation Reduction Act, which Congressional Republicans tried to repeal. The denunciations of this deal by climate advocates also misses the role that newly introduced limits on the National Environmental Policy Act (NEPA) can play in accelerating the transition to clean energy. And most importantly, it misses how much more strategically central these moves are to our work in getting off fossil fuels.
It is infuriating that we have to make any policy concessions to politicians who are holding the ongoing function of the federal government hostage (in their own words). But as far as decarbonizing our society and mitigating the climate crisis goes, stopping the Mountain Valley Pipeline — or the Willow Project in Alaska, or any other fossil fuel extraction and transportation project — does not get us to where we need to be. What matters far more in the big picture is accelerating our progress in replacing natural gas in our homes and businesses and deploying wind, solar, and batteries to minimize gas use on the electric grid.
The climate movement’s stress on these large fossil fuel projects misses the central truth that the struggle for a livable climate will be decided not by stopping fossil fuel supply, but by eliminating demand for fossil fuels. Because the dynamics of all of this are poorly understood, in this essay I explain the mechanics of stopping fossil fuels on the supply side versus the demand side, and why the latter is the critical battleground for the climate crisis.
Oil and Gas Market Realities
To understand why fighting against oil and gas on the supply side is essentially futile, it is helpful to start with an understanding of oil and gas supply and demand dynamics. I will cover three main concepts. First: oil and gas supply is largely interchangeable. Second: for oil and gas products much of the demand is not discretionary, at least in the short term. And finally, oil and gas supply responds to the expectation of future demand, and increasing supply does not automatically trigger an equivalent response in demand.
As the methane that makes up most of the content of natural gas is interchangeable, it could come from any one of a number of locations. The gas that you burn to cook dinner in New England or New York could come from the Marcellus Shale in Pennsylvania, or the Haynesville Shale in Louisiana, or from Eastern Canada. In the winter, it could even come from another continent via a liquefied natural gas (LNG) tanker. Or any combination of the above. The same is true for the natural-gas fired power plants that supply electricity to your home.
The oil and gas industry is truly global. While in the past the natural gas market has been largely confined to what can be served by a network of pipelines crossing North America, the building of a truly massive natural gas liquefaction and export capacity on the Gulf Coast over the last 10 years means that U.S. natural gas can also be sent all over the world. Existing limited LNG import terminals also means that gas can also arrive from outside North America — though due to the higher price of LNG and the abundance of domestic gas, it seldom does.
Given this expansive infrastructure, it can be very hard to truly limit the supply of gas; closing off or adding any one source usually just means bringing in more or less gas from another source. And even when gas supply is limited, this doesn’t mean that fossil fuel use or emissions are. New England is one of the few places where activist and regulators have successfully limited the supply of natural gas by stopping new pipelines. But with limited renewable and nuclear generation and constraints on the ability to import electricity from other regions, this has meant that in times of short supply New England burns more petroleum. This has not been a win for the climate.
Second, like other fossil fuels, much of the demand for natural gas is not discretionary. In the United States, almost all natural gas is used for heating homes and businesses, for electricity generation, and for industrial processes. Industrial demand will vary with the economy and the price of gas but makes up only a third of total demand. Demand for electricity and heat only varies slightly due to economic conditions and prices; Americans will still turn on the lights and heat their homes and businesses if it is cold regardless of what is going on in the economy, or how much it costs, and will only stop if their service is shut off.
For electricity generation, limited supply and higher prices for gas can result in a shift to other fuels or other power plants. But as illustrated in New England, in the short term this does not result in a shift to renewable energy or nuclear power. Primarily because they have low-to-zero fuel costs, wind, solar, and nuclear power don’t usually respond to prices and tend to generate as much electricity as they are capable of whenever they can. Instead, if gas is unavailable it will be replaced by the next most expensive marginal fuel source — which can be coal or petroleum, usually depending on what is available.
Finally, oil and gas supply is largely determined by expectations of future demand. Putting on more supply does not automatically drive an equivalent response in demand; instead it drives down prices (which has a limited effect in driving more demand). If there is not sufficient demand for the natural gas being drilled, the price goes down, and if it goes down far enough the less profitable and less well-capitalized producers go belly up. This dynamic resulted in large numbers of bankruptcies in the oil and gas sector following record low prices in the spring of 2020. Conversely, where there is demand, the oil and gas industry has shown that it is very good at meeting it.
Other Consequences of Reducing Supply
Many times, when new oil and gas projects are proposed, activists will calculate the total capacity of these projects and present this as if all of the fossil fuels that will be liberated will be burned. But these supply figures don’t matter as much as you might think in the big picture. With interchangeability of supply, a large volume of non-discretionary demand, and supply following the expectation of future demand, building or stopping any one oil or gas extraction or transport process will have very little effect on the overall volume that is burned.
Simply put, if we don’t get our oil and gas from one source, we will get it from somewhere else. As such, the struggle by climate activists to stop oil and gas by fighting individual projects resembles a very large game of Whac-a-Mole.
Because of non-discretionary demand, the main effect of limiting oil and gas supply is to raise prices, as was seen in the Oil Crises of the 1970s. This in turn spurred policy action to pursue efficiency and invest in nascent renewable energy technologies, but the effect was not immediate. And today we don’t need an oil shock like the ones in the 1970s to invest in wind, solar and batteries. Even with low natural gas prices, wind and solar are already the cheapest forms of electricity generation in most of the United States (and the world), and the market for stationary lithium-ion batteries is growing very rapidly.
There is also the collateral damage this path causes. A rising cost of natural gas means higher heating and electricity prices and rising costs for oil mean higher costs not only for transportation but also essential items including food and consumer goods. When prices for these essentials rises, it affects the poor the most, as these necessities make up a disproportionate share of their budgets and they have the least ability to absorb price increases. Given these uneven impacts, there is a grave irony that the same climate activists who argue the loudest for justice in decarbonization also fight to restrict supply of fossil fuels.
Some activists may think that the disruption of oil and gas supply is simply not deep or long enough to drive change. I would also caution against this line of thinking. If climate activists were ever successful in doing this, it would be the worst thing the climate movement could do for building broad societal consensus.
We have seen what it looks like to stop oil and gas supply to a degree that is sufficient to significantly reduce use. One example of such a stoppage was the Colonial Pipeline Attack in May 2021. Despite the interruption of the pipeline lasting less than one week, more than 16,000 gas stations across six states ran out of fuel to sell to customers, and an average national gas price that rose to its highest level in seven years.
Another example, specific to natural gas, was the loss of utility service primarily caused by the freezing of gas infrastructure during Winter Storm Uri in Texas. This led to hundreds of deaths — with low-income residents, the elderly, and people of color being most impacted.
If the environmental movement were ever to succeed in stopping oil and gas supply to the extent that either of these events did — even for a limited period of time — the societal backlash would be severe, and the movement would be severely discredited for causing a crisis for ordinary Americans.
Climate aside, there are other valid reasons to oppose specific oil and gas projects. Extraction projects such as the tar sands in Alberta are particularly emissions intensive in extraction and processing. But the Mountain Valley Pipeline is not one of these projects. And First Nations and their allies are perfectly within in their rights to fight projects like the Coastal Gaslink that cross unceded indigenous lands; but this also does not apply to the Mountain Valley Pipeline.
Building the Alternative to Fossil Fuels
The oil and gas industry has continued to grow, with only temporary interruptions, for more than a century. But that growth is threatened. Oil giant BP has stated that it expects global oil demand to peak within 10 years due to the transition to electric vehicles. Driving it down fast enough to prevent the worst of the climate crisis will require more work.
While natural gas demand has a stronger forecast for growth — in part due to gas’ role in replacing coal in the United States — there is also a path to end most gas use. This will require getting gas out of both electricity and buildings. The cities and counties in California that have banned gas in new buildings show the way to start on that. The incentives in the Inflation Reduction Act for home electrification also promise to make it more affordable for existing homes to transition off of gas. And in the electricity sector, the growth of renewables has already contributed to the decline of coal and now threatens the market share of natural gas.
Stopping a pipeline can cause significant problems for an oil and gas company, but it is not an existential threat and the industry will survive. What keeps oil and gas executives awake at night is the the shift to renewable energy and electrification. They can lose a pipeline, or an extraction project or two. But the movement to ban gas appliances in new construction has led the gas industry to run a national campaign to “pre-empt” gas bans at the local level. It is not an accident that Texas, the state whose government is perhaps the most openly captured by oil and gas money, is now moving to incentivize and mandate a certain portion of gas generation, while imposing costs on renewable energy.
When we shift the thinking from stopping fossil fuel projects to building the alternative, it becomes clear that the status quo of very slow permitting for new infrastructure is a problem for our ability to combat the climate crisis. In every year but one since 2015, the majority of the new electricity generating capacity that has come online in the United States has been wind and solar. But this pace is still not fast enough to meet our commitments under the Paris Agreement. Offshore wind projects are still taking a decade or more to get built, including a multi-year federal permitting process. The three years that it took the federal government to process an environmental impact statement for the South Fork offshore wind farm is simply out of sync with our need to decarbonize rapidly.
Progressives in the Democratic Party have staunchly resisted changes to the National Environmental Policy Act (NEPA). But the reforms in the debt ceiling bill, including page limits, time limits on environmental reviews and requiring an electronic portal for developers could help to get offshore wind and wind and solar on federal lands built more quickly.
This is not to suggest that the bill fixed all our clean energy infrastructure problems — far from it. What may be the biggest loss for the climate in the debt ceiling compromise wasn’t the inclusion of the Mountain Valley Pipeline but the absence of strong policy to speed the process of approving and building transmission lines. It currently takes an average of at least three years to get interconnection approval to build a wind or solar project, and much of this is due to limited transmission availability. And we are going to have to build a lot more transmission as we transition our electricity system further.
Getting Our Priorities Straight
For once, we have a leader in the White House who is actively working to accelerate the transition off of fossil fuels. From implementing policies to transition most autos to EVs and ambitious goals to transition to clean electricity, to mandating that the federal government lead by example, to the incentives for clean energy deployment and manufacturing in the Inflation Reduction Act, the Biden Administration has taken far more concrete steps to combat the climate crisis than any previous administration.
The best way to fight any pipeline or any oil project is to work to accelerate the transition to clean energy, electrification, and policies to reduce demand. This is exactly what the Biden Administration has done and continues to do. But this administration cannot do this work on its own.
The Biden Administration’s work to accelerate the transition off fossil fuels in electricity and transportation builds on decades of progress through state-level policies like renewable energy mandates and EV incentives and mandates. Cities have also played an important role in accelerating the shift to cleaner forms of electricity, building infrastructure to allow residents to meet needs without driving, and transitioning homes and businesses off of fossil fuels. For the latter two cities and local governments have led the transition and states and the federal government are playing catch-up.
At any level, these changes take people power — activists who are willing to show up and fight for policies and projects, and to educate voters on the necessary moves to get our economy off of fossil fuels. And while some of this work is happening, too much of the environment and climate movements are still focused instead on futile efforts to stop fossil fuel supply projects.
For these elements of the movement, a change in priorities is needed. It will require seeing the difference between meaningful moves to decarbonize our economy and superficial decisions that do not have significant long-term effects. It will require understanding the strategic battleground that we are on and seeing the forest for the trees. There is a lot of learning to do, and little time to do it in.
