Energy Independence Reflections: July 4, 2025
The Big Beautiful Bill has passed. I am trying to keep up as best as a multi-value chain, policy-adjacent economist can. I am a professional skeptic, and therefore, am pretty sure that regardless of the new policy, we will forge ahead with important things.
This is the state-level renewable power chart I prepared last week. As I was fact-checking, I found the Dept. of Energy map and used that instead. In 2024, the United States relied on renewable power for 30 percent of its electricity. For half the states, renewable capacity was less than 25 percent. These 25 states averaged 16 percent renewable energy. For these states, renewable energy is not the energy solution they are pursuing.
Fuel Abundance Shapes Regional Power Policy
For the other 25 states, including Texas and California, their average renewable power capacity is over 40 percent. This is something that will not simply disappear.
In business decisions are made based on marginal benefits. Sometimes these align with political positions, but even when they do not, benefits must outweigh the costs. When solar, wind, biomass, hydro, and geothermal resources are locally abundant, the policies tend to reflect this abundance. Perhaps this is correlated better on the state level than on the national level?
It is certainly true that when coal, oil and natural gas, are locally abundant, power generation is influenced by this abundance. Choice defines us. Choice matters.
State Boundaries verses International Boundaries
Renewable power nearly always is difficult to transport. For renewable power, local supply usually indicates local demand. This is not true for fossil fuels. We cost effectively move fossil fuels around the world.
It is good to remember that the United States is a federated republic. State governance is nested within the federal legal framework.
The administrative shift that occurred in January 2025 has challenged these state and federal relationships. Generally, it is in the context of disbelief that some legal precedent has been ignored. As we move forward, it is becoming clear that the perspective on who is responsible for the policy crisis de jour is being disrupted both directions (too federally dependent and not sufficiently federally dependent). It is exhausting.
History has established:
- US to States: In the 1970s, federal environmental laws were strengthened with Clean Air, Clean Water, and Resource Conservation and Recovery Act.
- States to US: This charged each state with building an environmental compliance framework to meet federal standards.
- US to States: In the 1990s, the federal government declared the states out of compliance and attempted to impose more federal control. This was particularly true with manure and water quality under the Clean Water Act. The feds did not add stronger Clean Water rules after several failed attempts to do so. However, states and industry delivered real solutions to their respective constraints.
- US and States: September 11, 2001, the United States was attacked by individuals from oil producing nations. Becoming independent on foreign oil became a national passion.
- States to US: The federal Energy Policy Act, 2005, was written to coordinate 17 states with existing state legislation banning the fuel oxygenate, MTBE. This established the Renewable Fuels Standard (RFS) structure. This had more to do with water and air quality than renewable fuels.
- US and States: Two years later, in 2007, the Energy Independence and Security Act (EISA) to advance both energy and environmental objectives. Expanded RFS structure establishing RIN trading system. The US renewable fuels industries were launched by both state and federal objectives.
- Individual states have led the establishment of carbon markets
Does the Big Beautiful Bill change renewable energy policy? Yes.
Does it end renewable energy, or renewable power generation? No. This is larger than the federal policies. Carbon markets in Europe and other nations have driven the growth of the US fuel pellet market. That may change with new tariffs, but regional and international markets often drive federal policy.
Will the Big Beautiful Bill make America Great Again. It is too soon to tell. There are certainly cracks in the back of that game plan envelop.
But regardless, I am a living, breathing US citizen, driven to make each new day better than the next one. We are all in this together on Main Street in whatever community we call home. The sun will come up tomorrow and bathe the Earth with more photons than we know what to do with, whether we utilize them or not. It is good to have that assurance as we sort it all out. I choose to champion underutilized stored solar chemical energy in organic wastes. Biomass rules!
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