Many of the most important energy issues require bipartisan legislation to create enduring, positive policy change. While my views on energy have been much more widely adopted by Republicans than Democrats thus far, I have long maintained that energy abundance is an issue that should transcend political parties.
Recently I’ve been seeking out more non-partisan or Democrat forums to share my views. Here’s a recording and transcript of my recent appearance on “The Extremely Non-Extreme Podcast,” in which I gave an overview of my vision for energy policy. I covered:
Why energy policy reform needs to be tech-neutral, comprehensive, and Congressional
Why energy affordability and accessibility, not “energy independence,” is the right goal
How preferences for intermittent energy have created today’s electricity problems
Why I think any designation of an “energy emergency” should be more delimited
Why the raw economics of fossil fuels are very hard to beat
How I think about the claim that fossil fuels create dangerous emissions
How I think the admin should and shouldn’t approach the issue of oil in Venezuelan
Why I don’t agree with President Trump’s goal of $50 oil
Here’s the full audio and transcript.
Quentin Wittrock
Welcome to Episode 20 of the Extremely Non-Extreme Podcast. I am the host, Quentin Wittrock. Today, we bring you the fourth in a series of podcasts about federal policy issues as we explore 10 policy statements listed in my Principle-Based Politics blog post of November 24th.
Having previously covered immigration and deportation policy along with tax and business regulation, today, we turn to the topic of federal energy policy. My statement is: affordable energy needs require all available resources to be used.
My guest to discuss this is Alex Epstein. Alex is an author and policy commentator based in California. He was recommended to me as a guest on the podcast by an energy industry veteran who described Alex as the person more familiar with federal energy policy than anyone else on the planet. That’s good enough for me. Welcome to the program, Alex.
Alex Epstein
Thanks, Quentin. Great to be here.
Quentin Wittrock
One of the reasons I embarked on this podcast is to help our Extremely Non-Extreme viewers and listeners understand that policy issues are much more complex than the catchy soundbite phrases that politicians spout out to win votes: build the wall, defund the police, no new taxes, etc.
With today’s topic of federal energy policy, I’m thinking there has to be more to it than should we “drill, baby, drill,” or “what do we do when there is no Planet B?” Alex, what do you see as the major federal policy issues facing elected leaders in Washington, DC regarding the topic of energy?
Alex Epstein
Well, just to put this into context, I think everyone should realize that energy is the fundamental industry in America. So I think of it as the industry that powers every other industry, which means, anything you care about in terms of what’s being produced or consumed for that matter, energy is a major input.Which means that the lower cost and more reliable energy is, the lower cost and more reliable everything is; the higher cost and less reliable energy is, the higher cost and less reliable everything is.
It’s a very foundational thing. And before we get into—there’s specific policy debates, but I’ll give you four what you could call verticals that are what I lump everything under, and I think these are the big topics. And then we can talk about what the policy should be.
So one of the big topics is what you could call energy development/permitting. And in many ways this goes beyond energy, which means just how easy or difficult is it to build new energy projects of different kinds. And my view, by the way, is that it is way too difficult to build basically every kind of energy project, but there’s a question of what should be done there.
And with each of these verticals, there’ll be a question of what Congress should do, what the administration should do, and then we could also talk about states, but I’m more focused on federal, and I know this podcast is focused on federal, so federal. So we have permitting/development.
We have electricity, which is the most central part of the energy economy that people are focused on right now, particularly because of the rising demand with the AI revolution, as well as some other causes of rising demand. This is a very central thing and people are seeing problems both with cost and reliability and there are questions about what to do there.
The third area, which today is mostly related to electricity, is the issue of nuclear energy or nuclear power. So this is something that has played a very large role in American electricity, but not nearly as large a role as many of us, many people, including me, think that it could.
And there’s this question of, what can you do to—people will put it as—“create a nuclear renaissance,” but of course, other people might say, “Well, you shouldn’t create a nuclear renaissance,” or “Nuclear is inherently going to be inferior to other technologies economically.” So there’s that whole issue.
So we’ve got permitting, we’ve got electricity, we’ve got nuclear.
And then the fourth issue is what I would call the emissions issue, and this relates to both particulate emissions—things like PM2.5 and nitrous oxide and sulfur dioxide, some of these things, like sulfur dioxide causing smog—but also this issue of greenhouse gas emissions, and in particular CO2 emissions and methane, and what should be the government’s role there.
And whatever side of that you’re on, that is a tremendously consequential set of decisions in terms of the economy because it affects development, and it affects electricity—in some ways it affects nuclear—but in terms of energy development and in terms of electricity policy, the issue of emissions is very foundational.
So those are the four areas. And then I can talk about what I think should be done generally in those areas, but those are the areas that are kind of on everyone’s mind and certainly on my mind.
Quentin Wittrock
I’ve read a lot about energy independence. It’s a phrase we see in the campaign literature. Everyone’s in favor of it. In 2025, the US appears to have improved in nearly every major metric regarding energy production and import/export ratios, but you’ve pointed out these four buckets of problems or barrels, perhaps, I should say, of problems. What can the federal government do in each of those four areas to improve America’s energy independence?
Alex Epstein
Well, I don’t actually think—well, I question, so I’m one of the few people who question energy independence as a goal. Just to give people context, my day job is being an energy expert, energy policy advisor, to a lot of people in government, but my background is philosophy. And one of the things I’ve tried to bring to the energy conversation is intellectual precision, and one key category of intellectual precision is precision of concepts.
And you mentioned that, often, there are these sloppy kinds of formulations or just generic catchphrases, like “Drill, baby, drill,” or “There is no Planet B.” And I think often, the worst is we just have these terms that we take as, oh, this is obviously good, energy independence, but we don’t really examine it. And I think energy independence is getting at something good, but it’s not the right way to think about it and it’s a dangerous way to think about it.
So I think the key things you want are really energy accessibility and energy security. Those are both values. So in terms of accessibility, I talk about this in my book, Fossil Future, you want it to be affordable, reliable, versatile, scalable.
So affordable means people can afford to use a lot of it. Reliable means it’s available when you need it in the quantity you need it, which is particularly crucial for the grid, which has very precise reliability requirements.
There’s versatility. So you need energy for lots of different things, not just electricity, but things like cargo ships and airplanes and often that can only be powered by oil cost-effectively today. And then scalability, you want to be able to have energy, in the case of Americans, for hundreds of millions of people. And then globally, you want it to be billions of people in thousands of places. So that’s the accessibility.
And then another aspect you can think of as accessibility is security, which means that you don’t want it to be disrupted. So there’s reliability in the sense that hey, solar and wind can have reliability issues because the sun isn’t shining as much as you want or at all, or the wind isn’t blowing as much as you want or at all.
But there’s also the issue of well, what happens if something happens to the Strait of Hormuz? What happens to the oil supply? This kind of thing. This is particularly conspicuous in the 1970s with oil, but also more recently with Russia invading Ukraine and Europe’s dependence on Russia.
So this issue of energy security is very important precisely because energy is so important. So any threat of disruption is a really bad thing, but security is different from independence. What independence is often portraying is this idea of self-sufficiency. So we want it all produced inside the US. We want to do everything here. And that is—
Quentin Wittrock
The nationalist traits.
Alex Epstein
Yeah, it has this nationalist element. And what you really want economically, and I would say politically, is you want it produced and traded with partners who are allies. But for example, I think it’s great if we have more trade with Mexico and certainly more trade with Canada. And I would praise many of the things this administration’s done on energy, but one thing I wouldn’t praise would be the policy toward Canada.
We are talking about the potential of Venezuela and a lot of issues there, but Canada has basically unlimited supplies and everything we could imagine—very few people, obviously very friendly government, very aligned, easy to have different kinds of pathways, including pipelines and electricity transmission between us. So I think of it as, well, that’s great.
So if you think about it—well, is it a problem if we’re not producing much uranium here but we get it from Canada, which arguably has the best in the world? I would say no.
What I’m in favor of is energy accessibility, including energy security, but it’s dangerous to have this idea that we need to be self-sufficient. I think it often justifies various schemes and scams like government-dictated ethanol, which I don’t think has any real value. So that sort of gets at my position in terms of what provides energy accessibility, including security, and I would fundamentally say it’s what I call energy freedom, which is leaving producers and consumers to pursue energy as they judge best.
So you mentioned something about, well, we need all kinds of energy resources. I would say we need all cost-effective energy resources, and we—even as an energy policy expert, I don’t think I’m in a position to know exactly what’s going to be cost-effective and what’s not in what situation.
My goal is just to create the political infrastructure such that people can find that out. So I think nuclear has a lot of potential, but the main thing I want to do is get roadblocks out of the way of nuclear. I don’t want the government funding hundreds of nuclear power plants and picking winners and losers and this kind of thing.
So what does energy freedom mean in these different contexts? In the context of permitting and development, I think it means reform that has three attributes. One is it is tech-neutral. Two, it is comprehensive, and three, it is Congressional.
So tech-neutral means every form of energy, every form of infrastructure has the same basic rules permitting it. You don’t decide one administration, oh, I don’t like solar and wind, so we’re going to make that hard. And then the next administration, I don’t like oil and gas, we’re going to make that hard. You see this happening, and that’s really, really devastating because it really means nobody has certainty in terms of permitting, so you need to be tech-neutral.
A second thing is you need to be comprehensive, which means you need to look at every way in which the government is blocking progress. And it’s really astonishing if you know, mining projects can take 20 plus years routinely.
There’s just all these different kinds of things. So there’s different kinds of water permits, and what are called environmental impact statements, which come under something called NEPA, the National Environmental Policy Act. There’s different kinds of air permits that I think are often done invalidly.
So comprehensive means you need to look at the full stack of things that are blocking progress, and you want to make sure that each one is either optimized for human health and safety and really that’s it, and protection of property rights, or it’s eliminated. And so our permitting process is just a disaster.
So tech-neutral, comprehensive, and then Congressional—this is really important—we actually need laws. It’s not enough to say, well, hey, the Trump administration is going to change what the Biden administration did, which is going to change what the Trump administration did, which is going to change what the Obama administration did. We just have this ping-pong. And you can’t do that much with executive orders in terms of long-term stability when you’re talking about projects that take—
Quentin Wittrock
Yeah. It seems like the solution is private capital, as I think the solution is to most things in the world. And private capital doesn’t want to invest and do what it only can do if there is government interference, I take it—
Alex Epstein
Yeah. Now, maybe that segues into electricity. I would say that there are some times when private capital is doing things that it shouldn’t do because it feels like it has some long-term assurance of subsidy. And this relates to the issue of electricity in terms of what does energy freedom mean in the realm of electricity.
And I think there, you need to be tech-neutral, which means you need to get rid of all subsidies and other preferences. And then in particular, you need to get rid of anti-fossil-fuel policies, which I think is the strongest inhibition on electricity as such. There are some other things, but I think those are the two big ones, and they’re related.
Right now, the grid is very non-tech-neutral, still is. Now, I and others were involved in cutting a lot of solar and wind subsidies in what’s called the Big Beautiful Bill.
I tried to cut all the subsidies. I tried to get involved with that. I was not successful in many different ways. I think a lot of other subsidies need to be cut, but those were the biggest and I think most destructive subsidies in terms of giving special preferences for solar and wind.
But there are many other preferences for solar and wind. So there are what are called “renewable portfolio standards” at the state level, which basically dictate, hey, you need a certain percentage of solar and wind, and often it goes up over time, sometimes to a hundred percent. So by 2050, you need to be a hundred percent solar and wind or something close to that.
There’s also—this feels technical, but it’s very important—the way our grids are set up, the rules of what are called the “electricity markets”—which are really just a new kind of monopoly construct—they have pricing rules that disproportionately benefit intermittent energy like solar and wind, and in particular, they don’t value reliability.
There’s a lot of technical detail there, but basically, in most of their transactions, you get paid the same whether you’re a reliable—you could call it—electron, or an unreliable electron, and that leads to lots and lots of problems.
I think we’ve created a huge problem by not valuing reliability in terms of the grid rules and then in fact subsidizing things that are intermittent. So we’ve given just an enormous preference, which has started to walk back to subsidizing and mandating that I believe is one of the root causes of the reason why we have more expensive and less reliable electricity.
The other reason is what you could call anti-fossil-fuel policies, which are attempts to either destroy, disallow, or discourage fossil fuel power in particular, so whether it’s prematurely shutting down a coal plant, passing rules—which the Biden EPA did—to make it illegal to build basically any new natural gas plant beyond a certain date, or just generally discouraging people, trying to force corporations to have net-zero standards.
So what this has done is we’ve just preferred unreliable generation, and then we’ve punished reliable generation. I’m trying to get the government out of that, which doesn’t mean there’s no role for solar and wind, but it does mean I think that they need to be paid properly for the service they provide.
And fundamentally, I think the service they provide is not the service of reliable power. It’s actually fuel saving on reliable power. That’s what solar and wind really do is if you have a gas plant and you have solar and wind operating, you can have fuel savings on the gas plant, and that has a cost to it as well.
It’s definitely not free and you have to see where it makes sense, but if you’re treating them as reliable power sources and then you’re subsidizing them and then prohibiting the competition, that’s a disaster. So that’s what I think needs to be fixed in electricity. I’m happy to talk about nuclear and emissions, but those are the first two.
Quentin Wittrock
All right. Well, let’s go to this, and maybe nuclear and emissions will come into some of the later questions that I have in mind, but on his Day One of his second inauguration, President Trump declared a national energy emergency. And the perceived need is—as we’ve discussed today—reliable, diversified, affordable supply of energy in the United States.
And also, I know that there are 7 billion people in developing nations that need more power to improve their daily life, and another 1 billion in developed nations, other than the United States, which are requiring enormous amounts of energy as well. Do you agree that there is an energy emergency, whether it’s national or not?
Alex Epstein
Yeah, I think there’s a big problem. I think it needs to be more delimited in general. We have more and more of a practice of the administration doing things versus Congress doing things, and hopefully there are some Supreme Court precedents that are changing that.
In general, the job of the administration, its executive branch, is to execute the law. It’s not to make the law. And what we see from both parties is more and more the idea that, well, you appoint the president and they basically do—you appoint them and they’re kind of like the CEO of the company that is America. That’s not the American model, and I think it’s a problematic model, but I think it’s the way that in many ways both parties think about it.
So it’s something like emergency authority. You have to think about, okay, this is something that is really dire. It’s time-limited and you can do something about it. I think that the strongest case there pertains to the grid in particular. So I would constrain it.
And one of the things you’ve seen the administration do—and I think it’s controversial, but there’s a case for it—is what they call 202(c) orders under the Federal Power Act. Under the Federal Power Act, which is a lot of our electricity law, you are authorized to prevent certain power plants from shutting down if you think that there’s an emergency kind of threat.
And what you see is that the Department of Energy has made use of these, and we’ve had multiple times where that power was used and it arguably saved the grid from mass, if not catastrophic, blackouts.
And what I think this shows is, to my point about electricity earlier, we’ve had really bad electricity policy. We’ve fundamentally punished reliable electricity and rewarded unreliable electricity or at least treated intermittent electricity as if it’s reliable and given its special preferences, and that has really been a disaster.
And I’ll say that I’m more sympathetic to the use of emergency authorities with things that the government controls than things that it doesn’t control.
And part of the thing is the electricity system, for better or worse, and I think long-term worse, is a monopoly system including the so-called “markets.” As I mentioned, these are monopoly constructs. The transmission is monopolized. The distribution, so the long wires, the short wires, that’s the distribution, are monopolized. And then the government creates this really, in my view, weird, set of rules that creates competition among certain generators, but it’s all controlled by the government.
So when the government is taking responsibility for something, if it’s screwed it up, it needs to do something to fix that. And people who choose to participate in electricity, which I’m glad they do, they’re not fully private entities because they’re all part of this monopoly thing.
So I think the emergency thing, when you have a really dire situation that can be reversed in terms of the federal government, I think that has validity. I don’t think you can say there’s an overall energy emergency, like there’s an emergency in terms of oil supply. I mean, we have fairly low oil prices right now. So you don’t want to constrain it. You don’t want to be too broad.
An example of being too broad—I would say way too broad—is the previous administration strongly considering declaring a climate emergency, and note that this shows you the ping-pong because the climate emergency basically meant we have way too much fossil fuels available and we need to radically reduce that and that’s going to somehow change the global climate, even though we have relatively small share of emissions and it’s shrinking.
And that’s part of the reason why, even if it’s dire, you can’t call it an emergency if we don’t really have control over it and it’s a long-term thing. But notice this problem where it’s like one administration says it’s an emergency that we have too much fossil fuel use, and the next one says it’s an emergency we don’t have enough. You don’t want to be governing that way. So I would constrain the emergency authority, but there are big energy problems and as I’ve said for six years now, the grid is the biggest problem.
Quentin Wittrock
Interesting. That’s an excellent point well-made. I know you’ve written a book though on fossil fuels, Alex, and—
Alex Epstein
Two. Yeah.
Quentin Wittrock
Two. Where does the future of that particular energy source fit in with hydrogen, renewable, natural gas, wind, solar, other options?
Alex Epstein
Well, I mentioned the four elements of energy accessibility in terms of affordability, reliability, versatility, and scalability, and we still don’t have anything that can replace fossil fuels on those four accounts, which is why we have this seemingly bizarre phenomenon where the whole world for a while says, “We hate fossil fuels.”
I mean the United States has been somewhat the exception when Trump has been president, but if you look at things like net-zero commitments around the world, in the corporate world as well as the political world, the corporate world, and the investment world, I mean, I would say the idea that fossil fuel use needs to be rapidly eliminated was, for years, the literally most popular political idea in the world.
And yet, fossil fuel use continues to grow and has continued to grow year over year. The only exception being COVID where it’s just there wasn’t much activity.
But that’s really striking, that everyone says they hate something and are committed to rapidly getting rid of it, and it keeps growing. I think that points to whatever people say, on some level, they need energy and they need it to be accessible to as many people as possible.
And the lack of real competition to fossil fuels has prevented fossil fuel use even from shrinking, let alone from being rapidly eliminated, and this is with lots of punishments directed at fossil fuels and lots of preferences, particularly for solar and wind. So I would say that just in terms of raw economics, fossil fuels are really, really hard to beat.
As I talk about in my more recent book, Fossil Future, there’s a combination of three attributes that they have that’s really, really hard to beat, which is that they’re naturally abundant. So there’s just a lot of them, like 10 times more than we’ve used in the entire history of civilization you still have underground.
Coal, particularly, is infinite, and we can harvest it in different ways. Gas in the US is. Oil’s a little bit more constrained, but still a ton of it. We’ve got that. So it’s abundant, but then it’s also naturally concentrated. So you have a lot of energy in a small amount of space, and it’s naturally stored.
And what the concentrated and stored does is very important because it allows you to really efficiently handle the energy. It doesn’t take up a lot of space, and can easily be transported, which is really good for things like mobility. And because it’s stored, you don’t need things like batteries or any other man-made storage.
It turns out that natural energy storage is a huge starting advantage, because if you just have the energy sitting there and all you have to do is release it, like refine it and release it in the case of oil, that’s a lot easier than you’re just taking in some flow of energy, like sunlight and wind, and then you have to provide the storage. It turns out man-made storage is a total pain to do on the scale that we have, that we’re used to with natural storage.
So it’s really hard to do that. The energy source that really seems to compete with that hypothetically is nuclear because that’s also naturally abundant, naturally concentrated, naturally stored. It is much more technically complex to harness, and I would say it’s been even more punished regulatorily than fossil fuels have.
So that’s why nuclear is a big effort, and maybe I’ll just put in the plug for the nuclear policy in terms of energy freedom, which is really, it’s related to the permitting. There’s a lot of the permitting stuff that just needs to be made much, much faster.
And then a lot of the way in which nuclear danger is—I wouldn’t say recognized, but attributed—needs to be made more realistic. The government has decided that it is good—they’re starting to change this, but there’s been this idea in nuclear that it’s totally okay to overstate the threat of radiation by a factor of 50 or more, that it’s just good, it’s being on the safe side. But that is not good.
You want to know objectively, hey, what’s a safe level? What’s a level that’s benign? What’s a level that has a little risk? But it turns out we set the risk, the allowable levels that people can be exposed to, even in the case of an accident, at 50 times what they should be, and that just means you pay all sorts of costs to literally get no benefit.
So the whole safety thing needs to be made objective versus this idea that there’s no such thing as too little radiation. That is false. There is such a thing as too little because it’s going to make your energy more expensive and then you need to fix the permitting around it.
So that’s a big project, and nuclear, I think, can play a huge role in the future. It has the fundamental attributes, but it is not a near-term scalable thing that’s going to—it’s not going to grow enough to rapidly meet the new demand, let alone replacing the existing demand.
And this is where so many people have been wrong in electricity is they’ve had this idea, hey, let’s get rid of fossil fuels and then let’s hope something replaces it. That’s a really bad way of thinking about things. How about you find the replacement, you prove it, and then it can displace something if it’s actually better.
But we created this problem where we had flat demand, we started driving fossil fuels off the grid. We were restricting nuclear, so nuclear couldn’t really do much at the margin. And then we pretended that intermittent solar and wind was doing it, and then it wasn’t. And then demand went up, and now, we’re in the pretty disastrous situation we are in where we’re having all these reliability issues. It’s hard for us to handle a winter storm, and we’ve barely begun on the AI demand.
Quentin Wittrock
But on fossil fuels though, the one thing you hadn’t talked about in detail is the emissions issue.
Alex Epstein
Yes.
Quentin Wittrock
Is that an issue, emissions, primarily tied to fossil fuels, or are there dangerous emissions from all of these sources?
Alex Epstein
No. Well, emissions in the sense of air emissions, which is the main kind of emission people are concerned with, that’s—I mean, with wood, it depends on what you mean by all sources. So there are emissions issues with wood, with burning wood. I mean certainly plenty with those.
And then with alcohol fuels like ethanol to some extent, there are certain things that are worse, but there are a lot of things that are cleaner burning of alcohol fuels than oil-based fuels or coal-based fuels.
Gas burns pretty cleanly. So if you take the standard kinds of what people will call “pollutants,” the general trajectory has been that fossil fuels have been getting way cleaner. So that’s just much, much, much—coal is much, much cleaner. Gas was already pretty clean, but it’s even cleaner. Oil has gotten much cleaner.
The real emission issue that’s been driving policy is the greenhouse gas emission, in particular CO2 emission. And that’s what a lot of my work on fossil fuels has been about—analyzing how to think about that issue—because it is true that when you burn—so you’re burning fossil fuels, which are this uniquely available form of energy that we have no near-term replacement for, but then it is true that when you burn them, you get this accumulation of greenhouse gases.
And one of the things is with a standard emission—let’s say you emit some soot into the air—it’s not great, all things being equal, but it pretty quickly dissipates. It pretty quickly gets cleared.
Now, of course you can emit more. But one thing about greenhouse gases, they accumulate over time. So you emit CO2 in the atmosphere. The atmosphere doesn’t clear it very quickly, which is why you see we have levels of CO2 that have gone up and pretty clearly because we’re burning fossil fuels and we see 270, 280 parts per million, so that’s like 0.028% of the atmosphere pre-industrial revolution, and now we’re above, what, 420 parts per million.
So it’s gone up by about 50%. And most scientists think, and I’m inclined to agree, that this has a warming influence on the atmosphere. And all things being equal, and that’s tricky because all things don’t stay equal, but all things being equal, the more greenhouse gases you have in the atmosphere, the more warmth that you’re going to have on the planet.
And this is an important thing to think about. So the energy—this uniquely available or cost-effective form of energy we have—has this side-effect of having a warming influence. And as a philosopher, I think one of my leading contributions has been to think about this in an even-handed and pro-human way. So often the way people think about it is, well, we’re impacting the climate, we’re causing “climate change,” so let’s get rid of fossil fuels.
But wait a second, that’s not considering the benefit of fossil fuels. That’s just considering the side-effects of fossil fuels. And not only is it just considering the side-effects, it’s treating the side-effects as uniformly negative, but to say that you’re warming the atmosphere doesn’t mean that it’s all bad.
You have to objectively look at that and see, well, where is warming good? Where is warming not good? And then also there’s, CO2 also has a greening effect on plant life and then has a certain effect on the ocean.
So you want to be even-handed about this and I would also say pro-human. So when you’re thinking about the effects, whether on climate or on energy availability, there’s a question of how are you measuring this? Are you measuring it by what’s good for human life or are you measuring it by the idea of zero impact? Like impact is evil. We want to minimize all impact.
And I think unwittingly, many people have adopted this idea that just impact is bad. So if we’re having any impact on the climate, it must be bad and we need to stop. And my view is if our impacts are netting out to where fossil fuels are overall a huge improvement, that’s good as far as I’m concerned.
And my basic analysis is that fossil fuels are so beneficial that they’re incredibly a net benefit, and including in terms of the livability of the climate, they’re a net benefit, a) because there is a lot of benefit to warming, but even when there are harms to warming, it’s offset by the energy we get from fossil fuels, which makes us incredibly resilient.
And one fact that I’ve highlighted is the death rate from climate disasters has plummeted over the last century, and that’s because our resilience, which I believe has made possible with fossil fuels, has far outstripped any climate challenges, and I think that will continue to be.
So it is not that it’s a “climate change denier” position, which is often the caricature, but it is rather that the challenges are outpaced by the resilience or what I’ll call the mastery of climate. And as long as that happens, you’re in good shape. So I do believe we have an impact on climate, but I don’t think it’s fundamentally a problem, and I don’t think it’s a problem that justifies reducing the accessibility of energy.
Quentin Wittrock
Let’s talk then about one particular fossil fuel that has been in the news, a great deal in political news lately, and that’s this vast reservoir of Venezuelan oil. Could greater access to the oil under Venezuela be a good thing for the US taxpayer and the fuel purchaser? Or is it just a good thing for oil companies?
Alex Epstein
It’s an interesting question. I mean, those are very related. So actually, if it’s good for oil companies, it’ll be good for the US consumer. There’s a real question of how good it is going to be for oil companies.
So let’s just give a little bit of a history of Venezuela. So this is a place where it—as happened in many different countries we’ve called the West, particularly the US, and I forget exactly who was involved in the Venezuela discovery—but what happened often is in the US and some extent, Europe, we innovated ways of finding and developing oil reserves or oil deposits that were unknown to and inaccessible by the countries and cultures and economic systems of the time.
So Saudi Arabia, if you read the book, The Prize by Daniel Yergin, which is very good on this stuff, he’ll talk about how when we, as in American oil companies and others, went into Saudi Arabia, they weren’t even thinking about oil because they could barely find water. And the US and other companies made agreements with governments.
And what happened over time—and I do think this is a huge mistake—was that the countries violated the agreements, often nationalizing the oil and not properly compensating the companies. And the US government sort of just allowed that to happen, which, it was kind of the thing to do to just allow people to nationalize things.
So what this ended up—this is one reason why we empowered a lot of really bad people around the world—is you have these thieves who just get unbelievably enriched by violating an agreement that had been made. And you see lots of this in the Middle East, you see lots of this in Latin America, and it leads to large problems, including in many cases, though not all, the regimes are so dysfunctional that they end up suppressing the oil supply.
So Saudi Arabia has been a place where that hasn’t happened as much. In part, the oil is so easy to get, and they’ve been better at preserving it. Venezuela has been a case where they just, with Chavez and Maduro—you’re talking about going from, say, 3 million barrels a day to less than a million which is where we’re at today.
So the question of what—and one thing that’s happened to the companies is it’s not like the companies have had this paradise operating in these regimes. They’ve often lost their money, and in particular with Venezuela, companies have lost a ton, and Chevron is still owed a ton. I think ConocoPhillips is owed something like $10 billion. It’s been a mess, and you see a lot of reluctance to go in. Darren Woods, when the White House had this event, called it uninvestable for them at this time.
So there’s this real question of how big an opportunity is this, how to pursue it. I’d contrast it with Canada, which I mentioned earlier, where Canada, they have a lot of production, I think right now, around a third of what we have, but they could have more. We could be transporting a lot more of their oil to us. I’m not fundamentally excited about Venezuela as an energy source in the way that I am Canada.
Now, Venezuela—the ideal thing I think would be, for everyone, would be if you had a good, civilized, democratically elected government that had rule of law and safety in the country. And then companies from the US and other places would feel comfortable going in there and that their agreements would be protected by that government, but as well as our government.
So that’d be good for everybody. And I think insofar as we’re trying to make policy there, that’s really important. I mean, we ultimately want a real alliance there. We want Venezuela to go—and I think there’s a real opportunity in Venezuela because a lot of the people want this. We want it to be a functional country.
I don’t think we should think of it as this is our oil piggy bank. Even though and insofar as we think of it that way, it’s really that the money that was stolen from US companies should be repaid at some point. And I think that is a precondition for doing anything more, and this is where, so far, the administration has not focused on that, and I think they should.
They should focus on, hey, it’s not—it’s too much like this is a pot of oil for the American people versus, no, this is oil. If Venezuela has broken certain agreements, then the people who are the victim of that should be repaid.
But in general, Venezuela should be a free civilized country that can hopefully develop oil and is a friendly environment. And we’ll make sure that our companies are protected if they operate in that. So that’s what I would advocate, but this is not going to—let’s just be clear: this is not going to be lowering your gasoline prices in the near future.
Quentin Wittrock
Speaking of prices, that’s going to be my concluding question. President Trump has talked about goals of $50 per barrel of crude oil and $2 gallons of gas. How would that work economically? The federal government doesn’t control those prices. Is that possible? And how would it work? Or is it even a laudable goal?
Alex Epstein
I don’t think it’s the right goal. I think the right goal is—you want—I put it as energy freedom, including in oil and gas—what you want is freedom of development, freedom of competition, and over time, that will lead to relatively low affordable prices, depending on the market at a given time. But that’s what you want.
I mean, you always, in every market, what you want is for people to be free so that they can compete to produce the best thing at the best price while making a profit. The “while making a profit” is really important because otherwise, they will not be in business.
Let’s look at Venezuela by the way. People can’t make a profit making oil in Venezuela. So guess what? They don’t have super cheap gasoline. They just have total dysfunction that you don’t want to—I definitely don’t believe in subsidizing American oil producers—but you do not want to be taking actions to artificially lower their profits. That leads to less innovation that’ll lead to higher prices over time.
And it is just not a good relationship to have with business. I don’t think the president should have a stance on, hey, this is the perfect price of oil, and in particular, $50. I think the reference there is some number of years ago before a lot of inflation. So I don’t think that. I think it should be, hey, the government should make it as easy as possible to produce this and then encourage that around the world.
That’s different from, I would say—different administrations in the past, at least, have pressured OPEC: “Let’s turn on the spigot. Let’s produce more pre-elections,” and stuff like that. This definitely happened with the Biden administration at least. I don’t think they should be doing that. I think they should just—oil is like everything else.
You shouldn’t be trying to set a price ceiling for oil. You should just allow producers and consumers to be free, and that’ll lead to lower gasoline prices over time. Or guess what, it’ll lead to people finding superior substitutes.
So if the oil industry can’t provide low enough prices, then maybe, we’ll actually find a cost-effective way to use ethanol, which is at least hypothetically possible in certain ways, though, not the policies we have now. Or EVs, I am totally in favor of EVs as long as they’re not subsidized and compete on the market. And I think at some point, we’ll be using a lot more EVs.
So again, it’s energy freedom. It’s definitely not about the government deciding, “I’ve just decided you randomly pay the same.” It’s like, Trump should not be saying what the price of oil is, nor should he be saying what the price of housing is. In the case of housing, interestingly, he wants those prices to go up. He said, “I want the price of houses to go up because I want the people whose money is in their home to get more money.”
And I don’t think that’s the government’s job, and it’s not the government’s job to keep prices high. It’s not the government’s job to keep prices low. It’s just to leave us free to produce and trade, and that leads to a world where we’re more and more prosperous in energy and in everything else.
Quentin Wittrock
Wow. This has been wonderful. My guest today has been Alex Epstein, and you can find him at alexepstein.com. Alex, why don’t you tell us the names of your books in case people are interested in reading more about these topics?
Alex Epstein
Sure. So my main book that people should read is called Fossil Future. It came out in 2022, and I think it’s held up very, very well in terms of its predictions about what would happen, including what would happen with energy and AI. And I think it, and my other work, has played a pretty significant role in changing the conversation on this issue. My first book is called The Moral Case for Fossil Fuels, but I don’t encourage people to read that just because I think it’s been superseded by the book Fossil Future.
And I would just say if people want to follow my writing in particular, I have a Substack, alexepstein.substack.com, and that is just a free—you can just get the free version of it and you’ll just get, I would say, some of the most useful energy commentary in the world. And hopefully, if you like this, I think you’ll really like the free Substack.
Quentin Wittrock
Very well. Thank you so much for your time, Alex. I know you’re a busy man and highly in demand, so—
Alex Epstein
Well, I appreciate it. And I’ll just say, as I told you before, I’m giving special preference to podcasts that are trying to be nonpartisan or even think they’re partisan against my position because I do believe that energy abundance and energy freedom should be nonpartisan issues.
And if we’re going to get stuff done Congressionally, we need people to transcend party lines. That’s one reason why I wanted to do this podcast, and I hope other nonpartisan, or even just Democrat, podcasts invite me on so we can have some of these conversations.
Quentin Wittrock
Excellent. Well, with the name of my podcast being Extremely Non-Extreme, I think that most things should be much more nonpartisan than they are, energy policy being one of those.
I think my wrap-up message for listeners today is, if you came into this podcast believing that energy is a simple thing from a political standpoint and “drill, baby, drill” will do it, or the Green New Deal will do it, and you can spout that on social media and sound smart—I hope you realize now that it’s much more complicated than that. These issues are interrelated and Alex has done an excellent job of explaining them to us.
So with that, we’ll close now and we’ll see you all again on Episode 21 of the Extremely Non-Extreme Podcast. Thanks again, Alex.
Alex Epstein
Thank you.
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