The Uneconomics of Coal, Fracking, and Developing ANWR

Many things have changed in 2020, and it’s an open question which are altered permanently and which are transitory. Work-from-home may be here to stay; as might the shift from movie theatres and cable tv networks to streaming services; pet adoption rates are so high that some animal shelters are empty and global greenhouse gas emissions declined in record numbers.

That last fact has several causes—the lockdowns and voluntary confinements of the pandemic; an oil glut that preceded the pandemic and continued through it; the ways renewable energy—especially solar energy—is successfully competing with fossil-fuels. According to the Institute for Energy Economics and Financial Analysis, an Ohio-based non-profit that studies the energy economy, more than 100 banks and insurers have divested or are divesting from coal mining and coal power plants. Their analysis also shows that natural gas power plant projects—for example one that’s been proposed for central Virginia—are a poor investment, due to a combination of clean-energy regulations and the difficulty of amortizing big power-plant construction in the face of a growing clean-energy pipeline, expected to grow dramatically over the next four years.

Such continued growth in clean-energy projects is particularly notable, as it comes despite high job losses for the renewable energy industry, slowing construction activity, and difficulty in finding capital financing. Those same headwinds brought about a record number of bankruptcies in the fracking industry.

Our guest today is eminently qualified to answer the question, are the changes we’re seeing in the U.S. energy-generation profile temporary or permanent? And what are the consequences for climate change? Kathy Hipple was formerly an analyst at the aforementioned Institute for Energy Economics and Financial Analysis and is a professor in Bard College’s Managing for Sustainability MBA program.