Energy policy takes center stage

Survival guides use the “rule of threes.” You can survive three minutes without oxygen, three hours without shelter in an extreme environment, three days without water and three weeks without food.

Clearly air, shelter, water and food are key to survival. Affordable and reliable energy is next on the list. Energy is the foundation for a nation’s economy, standard of living and influence in the world. I’ve heard it said that energy may only be 6% of America’s GDP, but if that 6% doesn’t show up to work, no one does. Access to affordable and reliable energy does not guarantee that a nation will be wealthy, but lack of it does guarantee that a nation will be poor.

Every time presidential candidate Donald Trump was asked about his plan to fix the economy and lower inflation, he answered that he is going to change energy policy. Now that he has officially taken office, we see a dramatic move toward reliability and affordability. Federal energy policy is now on center stage, and the focus has moved from climate change to meeting America’s energy needs through reliable, dispatchable energy.

The previous administration focused primarily on climate change, and nearly every aspect of energy policy was driven by the priority of reducing CO2. This included increasing federal regulations on traditional energy sources (nuclear, coal and gas) while providing billions and possibly trillions of dollars of government funding through the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) for intermittent renewable energy resources. The challenge with these policies is that they were not able to power onshoring critical to manufacturing and the growth of energy-hungry data centers.

Societies that control the apex technology on the planet generally achieve and maintain superpower status. A new apex technology is emerging on the planet, artificial intelligence (AI). The society that develops and controls the best AI will potentially control the world. A lack of adequate energy infrastructure to power this technology is a major competitive disadvantage and, if you believe it is an apex technology, a serious threat to American national security. In response, President Trump signed an executive order declaring a National Energy Emergency with a call to action to prioritize a reliable, diversified and affordable supply of energy.

He has also signed an executive order titled “Unleashing American Energy” targeting the disbursement of funds from the IIJA and IRA and directing government to reduce regulatory barriers burdening development of domestic energy resources and to expedite and simplify permitting for energy projects. The challenge: What happens if the political winds change in the future and in four years CO2 is, once again, government’s top priority. This creates a conundrum for energy executives trying to future-proof choices for capital-intensive energy generation investments.

Rolling blackouts and extreme scarcity pricing during recent winter storms — due to a shortage of reliable electric generation on the nation’s electric grid — indicate that America is in a proverbial hole when it comes to energy. I hope that our first step is to stop digging. We need to stop shutting down existing baseload resources such as coal and nuclear. I hope the next step will focus on domestic oil and gas resources and the infrastructure needed to deliver it to Americans via pipeline and the world via liquid natural gas (LNG) exports.

I also hope that America finds a way to invest in nuclear power. It is reliable, carbon-free and possesses the characteristics needed to power manufacturing and AI. But it is currently mired in regulatory inefficiency and lacks an industrial base to efficiently build – our nation sort of forgot how to do this in the past 40 years.

It remains to be seen if the Trump administration will put the same emphasis on carbon-free nuclear energy as past administrations have put on carbon-free intermittent renewable resources with billions and trillions of dollars of subsidies. The first month of 2025 in the energy industry feels a bit like the first eight seconds out of the gate on a bull ride. I am hanging on for dear life.

Editor’s note: Vernon ‘Buddy’ Hasten is president and CEO of Arkansas Electric Cooperative Corporation (AECC) and Arkansas Electric Cooperatives Inc. (AECI). Collectively, AECC, AECI and the 17 electric distribution cooperatives in Arkansas comprise the Electric Cooperatives of Arkansas. The opinions expressed are those of the author.