By Diana Furchtgott-Roth, The Daily Signal| June 21, 2023
With U.S. Secretary of State Antony Blinken’s friendly weekend meeting with Chinese President Xi Jinping, questions arise as to why President Joe Biden is promoting costly energy policies that strengthen China at the expense of America.
Although Biden on Tuesday called Xi a dictator, actions speak louder than words. Biden’s energy policies, which favor wind turbines and solar panels, are leaving Americans with higher costs and a weaker economy. With Biden’s energy and environmental policies heavily reliant on Chinese products, China is expanding its U.S. market for its wind turbines, solar panels, and batteries for global electric vehicles.
The Biden administration is favoring China with new proposed Environmental Protection Agency rules requiring 60% of new vehicle sales to be electric by 2030 and 67% by 2032, compared to 6% now; by following California’s lead with a goal of a transition to 100% of sales being battery-electric vehicles by 2035; and by slowing permits for oil and gas drilling and pipeline approvals.
These rules would raise driving costs for Americans, and poor and middle-class Americans disproportionately would pay the price. Charging these vehicles will also cost more. New power plant rules will regulate carbon dioxide and other so-called greenhouse gas emissions from both new and existing natural gas and coal-fired power plants and require carbon capture systems or a switch to hydrogen fuels—all of which will lead to dramatically higher energy costs.
America is currently energy independent due to vast resources of oil and natural gas that have been discovered and produced through innovative technology. However, should EPA finalize its recent proposed regulations on tailpipe emissions and power plant emissions without major changes, America would become less energy independent and more dependent on China for wind turbines, solar panels, and electric batteries, as well as many associated components.
As the world has seen from Russia’s cut-off of natural gas supplies to Europe, it is not prudent to rely on an unfriendly country for a vital resource such as energy, because restrictions can raise energy prices and carry disastrous economic and social consequences.
America can develop an energy sector supply chain and manufacturing base that is less subject to control or disruption by foreign adversaries. America can increase domestic oil and natural gas production and quickly build the associated infrastructure to transport these resources, such as pipelines and liquefied natural gas terminals.
The Biden administration has learned nothing from the recent actions of Russia and the 1970s actions of OPEC. The administration is pushing a futile climate plan that is only guaranteed to harm Americans and America while strengthening a belligerent China. The plan will make Americans poorer, hungrier, less likely to be housed, and unhealthier.
Electricity prices will rise, gasoline prices will rise, and cars that people now enjoy will be unaffordable. Even prices of used cars will rise—over 70% of car sales were used cars in 2022. Deaths on the road will rise because old cars do not have new safety features, and people will not be able to afford new cars—or more recent models of used cars.
Congress intended the tax credits and deductions in the Inflation Reduction Act to go to American companies that manufacture car batteries and electric vehicles, to provide livelihoods for Americans, and to increase American independence from foreign energy sources. But this is not happening.
Chinese companies are partnering with American companies to get those tax credits. Ford and China’s Contemporary Amperex Technology Co. Ltd., or CATL, have a joint enterprise in Michigan. Beijing is not only benefiting from the tax break but will be able to control both the technology and the factory operations at the $3.5 billion plant. That means CATL could decide to pause its Michigan plant at any time due to political tensions between the United States and China and throw the whole production process into turmoil.
China dominates battery technology, accounting for over 70% of global electric vehicle battery production capacity, and CATL is its largest producer, profiting from close relations with the Chinese Communist Party.
The CCP has facilitated access to domestic and foreign minerals for CATL battery production. Minerals such as lithium and cobalt are essential for batteries. CATL gets lithium from its operations in western China’s Qinghai Province, aided by government funding, and it gets cobalt from Kisanfu, in the Democratic Republic of Congo, where it purchased 25% of that nation’s cobalt reserves in 2022.
Congress should make sure that tax credits intended for domestic manufacturers of batteries and EVs are used by American companies and not Chinese ones and roll back agency regulations and guidance that allow foreign companies to benefit.
The U.S. energy sector supply chain cannot currently produce all the resources to handle the regulatory push to transition wholesale to renewable energy resources and electrification without substantial increases in prices. That’s why America would be wise to use its own natural resources—including oil and natural gas, stay energy independent, and not cuddle up to China.
Diana Furchtgott-Roth is the director of the Center for Energy, Climate and Environment and the Herbert and Joyce Morgan Fellow at The Heritage Foundation.
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