Pragmatism is perhaps America’s most distinctive contribution to philosophy.
The fundamental principle of pragmatism — that beliefs should serve as guides for action and be evaluated in light of results rather than abstract principles — ruled American thought during the period of economic and political expansion that led to the United States’ emergence as a significant global power.
Pragmatism holds that the meaning and truth of any idea are a function of its practical outcome.
Truth is a belief that evolved through the test of individuals and social experiences.
Actual human experiences serve as the inspiration for pragmatism.
Pragmatism opposes absolutism and idealism.
Pragmatism is a way of dealing with problems or situations that focuses on practical approaches and solutions.
Judging by the early experiences, results, and rhetoric of the energy transition away from a dependence on fossil fuels, I think it seems quite clear that we need an injection of pragmatism.
And it needs to happen quickly before we inflict self-wounds that will take years to unwind.
Listening to Understand Before Being Understood
Last April, I published “More Engineers Please” on LinkedIn Pulse as a plea for embracing the pragmatic approach engineers bring to designing, building, and maintaining various complex systems and structures.
Like the electric power grid, for instance.
Unfortunately, we do not seem to be listening closely to these engineers or following their intellectual, introspective, and inquisitive approach to problem-solving.
Nobody seems to want to listen to a different perspective. “I am right, but you just don’t know it yet” simply cannot be the approach to solving complex energy transition problems.
Binary thinking is the opposite of pragmatism.
Participants from all spectrums of the energy transition need to listen to understand before being understood.
And that includes our regulators and policymakers.
Early Results
According to a new poll (download and view here) conducted by Morning Consult on behalf of the Electric Power Supply Association (EPSA), the national trade association representing competitive power suppliers, Americans own some strong opinions on the reliability and affordability of electric power.
Pragmatically speaking, how are we doing so far in the early stages of the energy transition?
In December 2021, the North American Electric Reliability Corporation (NERC) issued a Long-Term Reliability Assessment (LTRA), indicating a high probability of insufficient resources and energy to serve electricity demand as early as the summer of 2022 in many parts of the Western Interconnection.
“While the LTRA finds that all interconnections will face increasing reliability issues over the next ten years, California, parts of the northwestern and southwestern United States, and the Midcontinent Independent System Operator (MISO) areas, in particular, are projecting capacity shortfalls and periods of insufficient energy due to declining reserve margins and generator retirements. Texas, California, and the Northwest United States project that peak demand cannot be met without some combination of variable generation and imports. In addition, natural gas infrastructure that supports electricity generation in New England, California, and the southwestern United States is susceptible to disruptions that can affect winter reliability. Regional coordination and resource adequacy planning among entities in these at-risk regions is strongly encouraged.”
But is anybody really listening?
Zero carbon dioxide emissions by 2035, a mere 13 years away, means shutting down all fossil-fueled generation, which presently provides more than half of America’s electricity.
Is that practical?
What about affordability?
U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers: Electricity in U.S. City Average [CUSR0000SEHF01], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/CUSR0000SEHF01, August 17, 2022.
According to the U.S. Bureau of Labor Statistics, skyrocketing electricity bills certainly should make one pause to consider the impact of the current approach to the energy transition.
Think the trend is only short-term?
When you consider the electricity of everything is forecasted to double, and some forecasts say triple, our electricity consumption in the U.S. by 2050, you can begin to understand Economics 101.
Increased demand + reduced supply = higher prices.
Unpaid utility bills continue to rise throughout the U.S. Twenty percent of Americans did not pay their utility bill last year.
And that was before the massive spike in gas and electricity prices in the spring after the Ukraine invasion.
Compromise and Courage
Despite years of technological advancements, financial investments, and international climate agreements, fossil fuels still account for 85% of global energy consumption. That sobering number indicates there will be many compromises and trade-offs necessary during the global economy’s transition, not that it will be too difficult or expensive.
We need to allow the free markets and investors the opportunity to lead the way to these compromises.
Not so long ago, the fracking revolution eventually led to the demise of coal generation and helped the U.S. lead the world in carbon emission reduction.
Capital flowed toward the pipelines and combined cycle plants without fear of retribution. Capital has a funny way of flowing to places it feels most welcome. The dismal capital expenditure numbers in the energy industry indicate that capital is not feeling so welcomed.
That needs to change.
We also need courage from our industry leaders to communicate plainly about practical solutions rather than idealism. Simple math spells out the clear need for nuclear power and natural gas to play a vital role in the energy transition.
For example, the widening delta in Transco prices and Henry Hub indicate the need for additional natural gas pipelines in the southeast. If we allow capital to react to the market price signals, additional pipeline capacity would be built.
The same argument applies to transmission buildout throughout the U.S.
But when we tell an industry like natural gas that we want you gone in a decade, who will realistically make these necessary investments?
Nobody.
Faith Over Fear
Long-term planning takes vision, courage, and compromise.
Leadership.
Once upon a time, in New York, Robert Moses made New York a city of mass transit.
He was principally responsible for the construction of major public projects in the state and city of New York, including the Triborough Bridge, Queens Midtown Tunnel, Bronx Whitestone Bridge, the Henry Hudson Bridge, the Brooklyn Battery Tunnel, the Throg’s Neck Bridge, the Verrazano Narrows Bridge, the Westside Highway, Jones Beach State Park, Robert Moses State Park, the Robert Moses Power Plant on the Saint Lawrence River, and the Robert Moses Power Dam on the Niagara River.
Stunning.
He also drafted the legislation that established authorities such as the Jones Beach State Park Authority and the Triborough Bridge and Tunnel Authority. Moses was a great city planner and master builder with remarkable political acumen.
We need a few more people like Moses today to help plan our energy transition.
If we place faith in our engineers and allow our time-tested and proven economic model to solve the many confronting challenges of the energy transition, we can overcome the prevailing fear caused by skyrocketing electricity bills and mounting reliability concerns.
Let’s learn from the energy transition’s early results and experiences and pivot toward pragmatism today.
The place where respectful dialogue and practical solutions arise.
Decarbonization needs to be cautious with an eye of observation to the European experiences.
Learn more about how the energy transition won’t come as easily, cheaply, or quickly as some would want in my previous blog post, “Greenflation Is Leading to Volatility In the Markets.” Learn about our Carbon Emission Tracking and Forecasting Software.
