POWER June 2022 - 44

COMMENTARY
Energy Security = National
Security: How the West
Needs to Reindustrialize,
Rethink Energy Policy
Craig Golinowski
T
he current geopolitical crisis spurred by the Russian invasion
of Ukraine should provide a rude awakening in the
West to our misguided and flawed policies toward energy
development by government and major pension plans, university
endowments, and banks. Domestically produced, reliable,
and affordable energy, including liquefied natural gas (LNG),
crude oil, and ammonia fertilizer, as well as thermal power
when combined with carbon capture and storage (CCS), are
foundational to our national security and essential tools in the
arsenal of democracy. If we fail, we will continue to be hijacked
and at the mercy of a Russian-Chinese alliance to control the
production and supply of many vital resources, including the
essential supply chains for renewable energy, amid an interdependent
global energy and agricultural complex.
The message received is now loud and clear, even to those
that have been tone deaf and swayed by the deeply flawed
agenda to simplify energy policy into a binary " oil and gas
(O&G) bad " versus " wind and solar good " framework. We
need to increase energy production and energy infrastructure
alongside an increase in overall manufacturing and industrialization.
Electricity consumption will increase significantly, and
the need to reindustrialize production and bring the bargaining
chips of true, tangible power back to the U.S. is paramount to
our national security and ability to defend democracy globally.
CCS: Proven and Available
CCS is critical to enable this broad increase in energy production
and reindustrialization process while addressing the need
to reduce greenhouse gas (GHG) emissions. CCS can enable
building of LNG, ammonia, hydrogen, enhanced oil recovery,
methanol, and thermal power plants to produce clean energy
while capturing GHGs.
We have viable and large-scale CCS case studies for hydrogen,
ammonia, and LNG that prove technical feasibility and
cutting-edge innovations, such as NET Power's demonstrated
industry ingenuity in creating new processes. NET Power has
made major advances in power production with CCS, and is a
proof point that innovation can allow thermal power plants to
contribute to a net-zero framework.
The current energy crises in Europe provides a direct case
study in an alternative dystopia, where government policies
and public pensions agreed to cancel coal, nuclear, and O&G
production. Today, energy is increasingly unavailable and unaffordable,
dependent on the whims of the wind blowing and the
sun shining, and on Russian imports. The European industrial
economy is essentially bankrupt, given energy costs that make
European production broadly uneconomic.
The anti-fossil fuel movement (broadly embraced by governments,
pension funds, and banks) have subscribed to a deeply
44
flawed argument that reduced supply (and resultant higher
price) of fossil fuel energy will force rapid substitution to renewables.
In fact, high energy costs are driving massive increases
in the cost of renewables because solar panels, wind
turbines, and batteries are made from raw materials based on
fossil fuels. Higher cost raw materials drive increases in the
costs of producing all forms of energy. We are in a self-defeating
feedback loop.
To correct this vicious circle of energy shortages causing
inflation, and in turn, higher energy costs, a new capital investment
cycle is needed in fossil fuels and nuclear. This capital
investment cycle must also directly address GHG emissions.
CCS provides the reconciliation to increased fossil fuel investment
and GHG reductions.
Policy Changes Could Help
The U.S. must move to a massive revaluation of the 45Q tax
credit to appropriately value avoided emissions and acknowledge
that our self-imposed energy polices have created an inflation
that has eroded the value of the existing tax credit. With
a defined and measurable solution to GHG emissions, CCS can
unlock capital investment in domestic energy production by
providing certainty for long-term investors that energy projects
equipped with CCS are sustainable.
Combining a capital investment cycle in fossil fuels, combined
with CCS, does not mean turning our backs on renewables, but it
does mean understanding that reliability and affordability comes
with using all tools in the portfolio and renewables alone are not
feasible. Renewables require affordable and reliable fossil fuels
because they are made from fossil fuels.
The European Union, Canada, and the U.S. are all guilty in
appeasing the environmental lobby by shutting down coal and
nuclear, while explicitly limiting O&G developments and export
infrastructure. We need to acknowledge the foolishness of our
current approach, and that a multitude of unintended and dire
consequences have already been unleashed.
Ammonia fertilizer is made from natural gas and the production
of ammonia in Europe has been severely constrained due
to natural gas shortages. The combination of ammonia shortages
in Europe with the " breadbasket " of eastern Europe,
Ukraine, embroiled in conflict, has the potential to create a
global famine. As per a recent Wall Street Journal article, " fertilizer
is about three to four times costlier now than in 2020, with
far-reaching consequences for farmer incomes, agricultural
yields and food prices. " We need leaders who are ready to confront
this unfortunately self-imposed reality with a response to
massively increase our energy production and exports with a
broad reindustrialization of our economic systems. ■
-Craig Golinowski is managing partner at
Carbon Infrastructure Partners.
www.powermag.com
POWER | June 2022
http://www.powermag.com
POWER June 2022

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