On Tuesday I participated in a House Oversight Committee roundtable on the topic “Winning the Economic Competition with China: Working Families, the AI Race, and Energy.”
Below, I share my testimony on 5 key issues related to energy and China, followed by a Q&A with Representatives on ideas from the new book I’m working on, The Moral Case for AI.
China’s chief advantage over the US in energy and everything else is far greater industrial freedom
China is expanding its reliable power by building new coal plants
China is using solar as a fuel saver for reliable power and selling it to us
America’s attempt to use solar as a reliable power source via subsidies and mandates has been a total disaster
We need a radical increase in industrial freedom
Rep. Eric Burlison (R-MO-7):
We have Mr. Alex Epstein, who is a philosopher and energy expert who argues that human flourishing should be the guiding principle of energy and environmental progress. And with that, I want to turn it over to you gentlemen and provide you with an opportunity to provide your opening remarks.
Alex Epstein
I have five points I want to introduce and then happy to answer any questions about them. But to me, these are the five points, at least most relevant to energy and China.
1: China’s chief advantage over the US in energy and everything else is far greater industrial freedom
Point number one is China’s chief advantage over the US in energy and everything else is far greater industrial freedom. So we’re often taught that, well, China has an advantage because they’re willing to spend more, they’re willing to dictate things. But America has proven in the past that by far the best “industrial policy” is freedom with property rights.
To give you a sense of how powerful this is in the 1870s, the first long distance pipeline built in the US, the Tide-Water Pipeline went from conception to completion safely in 6 months. You cannot do that with a yoga studio, or upgrading a yoga studio, in America today.
So what’s happened is not that we’re too free and we need to adopt anti-freedom things in any way, it’s that we are radically less free than China. Basically, your ability to build things is overwhelmingly a function of how quickly you can go from idea to execution. In the United States, our entire permitting system makes that basically impossible.
And so if we’re at all serious about being a country in the future, competing with China, etc., we need radical permitting reform and this should be bipartisan.
We need to aggressively reform NEPA, National Environmental Policy Act. So that’s something that, it was originally supposed to just do a bonus review for projects, so just follow the laws and then just do a bonus review. And now the bonus review can literally kill projects, or activists can sue over the bonus review and delay a project for 5 years. So NEPA needs radical reform. This affects projects Republicans care about and Democrats care about.
The Clean Water Act in its current state is an atrocity. It targets both gas pipelines and transmission lines as a menace to water quality. Guess what gas pipelines and electric transmission lines have in common? They literally cannot meaningfully contaminate the water because they don’t have any liquids or solids to go in the water. And yet the State of New York and others routinely kill these things in the name of fake justifications like “turbidity.”
Do people know what “turbidity” means? It means temporarily muddy water. So that’s what we’re destroying our economy for and that’s why we have way too high natural gas prices because we can’t build pipelines to take our abundant gas to market because we’re afraid of muddy water. And at the same time, New York is constantly creating a thousand times as much muddy water just to keep their ports clear. So Clean Water Act is a disaster. Republicans and Democrats should agree on this.
Now we have a more contentious one for today’s Republicans: permitting certainty. The idea that once you get a permit, it should be a real permit. It should be final. Presidents love to deny permitting certainty. So we had Biden killing Twin Metals, killing oil and gas projects. Now President Trump likes to use it to stop wind. Both parties have to recognize that you cannot be a real country if the president can revoke permits at will. We need permitting certainty. It should be bipartisan.
So number one is China’s chief advantage over the US’s far greater industrial freedom. If we don’t at minimum radically reform NEPA, Clean Water Act, and have permitting certainty in permitting legislation—we’ve got a very short clock to do that—you can’t seriously talk about competing with China.
2: China is expanding its reliable power by building new coal plants
Okay, number two is China is expanding its reliable power by building new coal plants. So there’s a mythology that China is winning on industrial electricity because they’re adopting solar. So this is a misunderstanding of what is happening. If you look at China, they’re always building new coal plants, they have a lot of coal plants in the pipeline, and they’re using a lot of solar at the same time.
What’s happening here? What they’re using the coal plants for is reliable power, what you can call “capacity.” So the ability to generate electricity when needed in the exact quantity needed. “Baseload” is actually not quite the right term, but what you really need is just dispatchable, reliable power, whether it’s baseload or it’s flexible.
Because when you have a peak event like Storm Fern, you don’t just need the base load. You need the flexible peak power. And what we saw during Storm Fern is something I’ve said for years, which is solar and wind can go near zero at any given time.
3: China is using solar as a fuel saver for reliable power and selling it to us
Solar and wind, this is point three, do have a use and China is making use of it, but they’re not using it as reliable power. They’re using it as a fuel saver for reliable power.
So solar and wind, you should not think of as real power sources. You should think of them as fuel savers. When the sun shines and the wind blows, you can save gas, you can save coal. And in countries with really expensive fuel, that can make a lot of sense.
Now, guess what? The United States does not have really expensive fuel, so most of our solar and wind is a complete just burning of money and harming our grid. But in general, we should be open to solar and wind when the fuel savings outweigh the cost of the panels and turbines of the transmission and the distribution, which again in the US is rarely the case and would be even rarer if we had good permitting policy.
But with China, it makes more sense because they don’t have all the same domestic resources. And for solar, they’re not only saving fuel with solar, but they have the solar industry where they’re making quite a bit of money selling us solar panels that we’re way overspending on.
Okay, so their advantage is industrial freedom, that’s point one. Point two is they’re expanding their reliable power through new coal plants. Number three is they’re using solar as a fuel saver for reliable power, not reliable power itself, and they’re selling it to us.
4: America’s attempt to use solar as a reliable power source via subsidies and mandates has been a total disaster
And number four, and this relates to the Big Beautiful Bill, America’s attempt to use solar as a reliable power source via subsidies and mandates has been a total disaster.
So we have preferred solar in all these different ways. We’ve subsidized it. Fortunately, the new subsidies at least have come to an end. We still have 10 years more of some of the wind subsidies in the pipeline. So we didn’t kill enough of those, but still it’s a lot better, but we’re doing that.
The markets don’t impose any penalty for unreliability, so we have huge problems with electricity markets, and many states still mandate large amounts of solar and wind through what are called “Renewable Portfolio Standards,” so we have all of these preferences. And at the same time, we have all these punishments on fossil fuels.
So what happens? We are artificially lowering the supply of reliable electricity. And at the same time, we’re artificially increasing the demand through electrification, and now we have this huge organic demand from AI.
I was warning of an electricity crisis before the AI era. Now it’s just totally, totally dire. So we need to abandon this idea of subsidizing, mandating intermittent fuel savers. We shouldn’t be subsidizing or mandating anything, but certainly not things that aren’t reliable.
5: We need a radical increase in industrial freedom
And what do we need? And this is point five. We need a radical increase in industrial freedom. And the two areas I’d point to are, one, tech-neutral permitting reform, so every kind of technology is much, much easier to permit in the ways I laid out.
And we need tech-neutral electricity policy, policy that values reliability and properly devalues unreliability.
If we do this, we have a real chance of being a serious country that’s growing and can meet the AI opportunity, which is not only a security issue, I think it is the chance for the greatest improvement in human life since fossil fuels caused the energy revolution. So happy to talk about that as well.
Q&A: The constitutionality of permitting certainty
Rep. Clay Higgins (R-LA-3):
Alex, you mentioned—I appreciate your work and your ongoing communication which I consider an asset.
Alex Epstein:
Thank you.
Rep. Clay Higgins (R-LA-3):
We don’t always agree.
Alex Epstein:
My job is to tell you what I think is true. That’s part of the reason why people listen. They believe I believe what I’m saying at least.
Rep. Clay Higgins (R-LA-3):
Roger that, but I always listen.
Alex Epstein:
I appreciate it.
Rep. Clay Higgins (R-LA-3):
So you mentioned permit continuity and reliance—reliable permitting, the major problem. I’d like to drill down on that.
Alex Epstein:
Yeah, let’s do it.
Rep. Clay Higgins (R-LA-3):
You rightfully identify that as an issue for American industry. And we are quite aware we have, in deference to our Chinese friends we have almost a yin-yang relationship with them, every eight years going from yin to yang.
So how would you suggest with Article One, we swear an oath to the Constitution, the founders effectively granted sweeping ballots to the executive. So any permit that would require executive authority and essentially the signature of the President, how would you constitutionally remove that authority?
Alex Epstein:
I mean, this is a great issue. I mean, I think of it as the opposite problem. I don’t think the current authority and the way the administrative state functions is constitutional or even defensible. So the basic structure is supposed to be Congress passes the laws. The executive faithfully execute the laws. We have this idea of a government of laws, not of men.
Rep. Clay Higgins (R-LA-3):
For an observation though, therein lies the interpretation of existing laws.
Alex Epstein:
Yes.
Rep. Clay Higgins (R-LA-3):
And the executive absolutely has the right to reinterpret laws if they believe they were wrongfully interpreted by the previous administration.
Alex Epstein:
True.
Rep. Clay Higgins (R-LA-3):
So, again, I ask you, how would you constitutionally address that as it would through Congressional authority, with Article One authority, without injuring Article Two constitutional authority?
Alex Epstein:
I mean, Congress needs to write clearer laws. So that’s one thing. They need clearer laws.
And what I’m saying with the permitting certainty is you need laws saying that once you have a permit, then you cannot just overturn it. And in fact, you could just have the permit be final. And then if the company actually violates the law in statute, then the executive can prosecute them. That’s different than the permitting thing.
Keep in mind, the founders didn’t even intend there to be permitting. So the whole premise of permitting is guilty until proven innocent, and it’s a fundamentally un-American premise. The only justification—
Rep. Clay Higgins (R-LA-3):
I think you hit it. I think we concur that given the modern phenomena of executive reversals of industrial permits, which is certainly a 21st century issue, Congress has to write legislation that includes prohibitive language and more clear granular language that can be less easily interpreted this way or that way. Would you concur with that?
Alex Epstein:
Yes, definitely.
Rep. Clay Higgins (R-LA-3):
Okay. But we do agree that in order to— we can’t just say, “Well, presidents can no longer, executive branches no longer has the authority to interpret an existing permit.” They have to be able to do that or else we’d be interfering with—
Alex Epstein:
I mean, the permit is a creation of Congress. Congress can attribute whatever stipulations to it wants. It can say, “This permit, once you pass this stage, it’s done. And then the only recourse is just if you’re violating the law, then you can do it.”
So I think we can dramatically constrain the executive. Now, the counter to that is, well, there’s lots of other things the executive can do, and that’s true and we should shore those up too. But in general, the vision is a government of laws, not of men. It should be obvious what the executive will do with these things. We’re far from that, but that’s the model. I don’t want one person having this authority.
Rep. Clay Higgins (R-LA-3):
Yes, sir. Well stated.
Q&A: The moral case for AI
Rep. Lauren Boebert (R-CO-4):
Mr. Epstein, and specifically talking about permitting, and of course you could take this anywhere you’d like, but will the United States ever be able to outcompete China manufacturing when we continue to make it harder to build mines and factories and refineries here at home?
And what are the biggest regulatory reforms Congress can make to help American manufacturers compete with China?
Alex Epstein:
I think we need—
Rep. Eric Burlison (R-MO-7):
Yeah. And I will say if everyone could, when you talk, use your mic, because we’re broadcasting this and we will be clipping it for—
Alex Epstein:
I think we need to recognize just how hard it is to do things here versus China, assuming the Chinese government wants something.
Now, the best is if you have real freedom, so it doesn’t really matter what the government wants, but the Chinese government wants a lot of industrial activity. And so people are relatively free to do it and we’re not.
If you look at the realms where we do have a lot of industrial freedom, say in particular oil and gas production in the United States where it’s largely a state permitting process and where, say Texas, you can have a pretty thin permit in terms of sheets of paper versus New Mexico or the federal government, you see that we can, I mean that’s in a sense a kind of manufacturing. So we see that when we do have the industrial freedom, we can do it.
The federal permitting regime is so bad that even if we make all the reforms that I’m advocating in permitting reform, we’re still going to be much less industrially free than China, but we’ll be much more industrially free than we are today. So we’re going to need to do that.
I do think where the real opportunity is is going to be in using and adopting new technologies. And in particular, let me just evangelize for AI as somebody who’s working on The Moral Case for AI.
Rep. Lauren Boebert (R-CO-4):
That’s what I was hoping to do before you leave. Yeah.
Alex Epstein:
Yeah, in fact have a... I can give you actually, my personal AI already wrote The Moral Case for AI for me, so I can give you a copy if you want.
Rep. Lauren Boebert (R-CO-4):
It’s a great app by the way.
Alex Epstein:
Thank you. So the best analogy I can give for AI for Americans to get it, those in particular who are familiar with my work on energy, is like billions of people in the world lack energy. We know this.
I talk in my book about the Gambia and where a woman can’t bring her baby— her baby dies because they don’t have incubators because they don’t have reliable electricity. You have 3 billion people in the world who have less access to electricity, who use less electricity than a typical US refrigerator does.
So in the United States, we can’t imagine this because we have access to abundant energy. Now, what access to abundant energy really means is access to abundant physical work. So we have all these machine servants doing work for us all the time. Basically the equivalent of 75 machine servants, like 75 machines worth of human energy are working on your behalf 24/7. And that’s why we’re so rich in the physical realm, because what energy does is it scales physical work.
Now, what most Americans don’t realize is that while they’re wealthy in terms of access to physical work, they’re quite poor in terms of access to mental work. And if you look at what really wealthy people do, and I know a lot of really wealthy people being in energy, one of the things they spend their money on is abundant mental work.
So they’ll get a direct tutor for their child or multiple tutors to get their child ahead. They’ll give one-on-one custom instruction, not just send them to the schoolhouse with 30 kids per teacher.
What will they do? They’ll have a private medical advisor or two, a concierge doctor, and they’ll have medical specialists, and they’ll have specialized veterinarians, and they’ll have psychologists, and they’ll have all of these other things. And then they’ll have assistants who help them plan trips and solve problems and stuff like this.
This is what AI is making available to everybody relatively quickly. AI is giving you custom teaching, so AI will soon be able to give custom instruction to anybody based on their context. That’s going to be much, much better than almost any teacher in the world very cheaply. And it’s going to give us custom advice where we can get expert advice from the equivalent of medical professionals and psychologists and anything else you can imagine.
Rep. Eric Burlison (R-MO-7):
Tax advice.
Alex Epstein:
Yeah, tax advice, so the whole legal system will be accessible to people that’s not. And in the realm of assisting, you’ll know what it’s like to have a family assistant or a personal assistant or executive assistant, which most people have no idea how convenient that is. And then if we get self-driving cars, then you get, “Oh, yeah, I have a driver too.”
So we’re at this phase where most people are really poor in terms of access to mental labor, you could call it access to intelligence. And we have this unbelievable technology that we are leading in that still needs to evolve a lot to fulfill its potential and that we need to lead in for economic and national security purposes. And yet we’re demonizing it in the same way we did fossil fuels in the sense of not looking at the benefits and then catastrophizing the hazards.
But most of the hazards of AI can be dealt with fairly straightforwardly. There are AI policies that can actually allow data centers to make electricity cheaper, not more expensive. There are policies that cannot challenge water supplies, but can actually make water more abundant. You can deal with the noise issues. You can make the data centers beautiful.
All these things are solvable, but we need a solutionist mindset versus a defeatist or a catastrophist mindset. And that’s why I’m, look, there’s plenty to do in energy, but that’s why I’m focusing on AI a lot now is because I feel like this is like when Obama almost killed fracking.
One of my things with Obama and fracking was he took credit for it. But the real thing that happened is he didn’t know about it early enough to stop it. Otherwise, he would’ve banned it because he said, “I’m going to end the tyranny of oil.” But he didn’t know about fracking and fortunately fracking got off the ground.
Nuclear power wasn’t so lucky because it never really got off the ground because the catastrophists killed it. This is what can happen with AI. The catastrophists and the defeatists from both parties can kill this. That means it’s going to revolutionize the rest of the world, but we’re going to be far behind. We’re going to lose all kinds of jobs, all sorts of industries, and our security is going to be really, really bad.
So I think we are at this inflection point and we need to embrace AI as an enormous opportunity and something that’s going to make billions of people’s lives better.
Q&A: The biggest bottleneck to AI is electricity supply
Rep. Lauren Boebert (R-CO-4):
Before you leave, how does energy and our resources tie into data centers and looking at the benefits of AI?
Alex Epstein:
Well, it’s the same— one is you just need to look at them the same way, so you need to look at positives and negatives with both of them. But what we’re seeing with data centers and AI is that the biggest bottleneck that we face in particular is electricity supply.
The US always better at what Peter Thiel calls going zero to one, like inventing something, because we have the most freedom in terms of mental freedom in our thinking. So we invent things, but China’s much better at stealing them and scaling them, and in part because we don’t have the industrial freedom.
So what we’re finding is we’re really good at designing chips. We’re really good at designing models. And we’re freer to do those things than people are in China, but we’re not leaving ourselves to free electricity even though producing electricity is incredibly easy.
Edison figured this out. It’s very easy. You just take reliable sources of fuel, you build power plants, you build some power lines. Super, super easy to do. But the whole permitting system has ruined this and made it difficult.
So basically if we can deconstrain our electricity grid, and a good place to start is by allowing these AI data centers to build their own power, which can power them and contribute to the grid, and be free of a lot of these other permitting things, that’s a good start.
So AI is existential for the country, energy is existential for the country, and energy is existential for AI.
Q&A: A solutionist approach towards the hazards of AI
Rep. Eric Burlison (R-MO-7):
Can I ask, can I jump in?
Rep. Lauren Boebert (R-CO-4):
Yeah, of course.
Rep. Eric Burlison (R-MO-7):
So before you leave, and since you’re writing a book on the moral case for AI, what is your response when people say this is going to devastate and destroy jobs? Also, that these data centers are going to be sucking up all the water and all the electricity in our communities?
Alex Epstein:
Yeah. So there’s three different things.
So the water thing, most data centers need to be cooled. They can be cooled through some combination of water and electricity. You trade between them. So you can use basically no water if you want to. You just use a little bit more electricity. So the water thing, if there’s a water issue, you can just solve it by different methods of cooling.
Often it does make sense to use water because you can use less electricity and most places don’t have water issues. In places with water issues, just use more electricity to cool. It’s really simple.
Okay, what was the next one? Oh, electricity. Yeah. I mean we have to deconstrain electricity production, but in particular, you can allow them to build their own power and contribute to the grid. They can sign agreements where they won’t take power when there’s peak demand on the grid. You can sign agreements where they agree to pay even more for their share of power because they can make more financial use of power than other people.
Rep. Eric Burlison (R-MO-7):
And they’re subsidizing the people—
Alex Epstein:
Yeah. So, again, these things are solvable. So when people raise these hazards or problems, the question is, are you raising it because you want to solve it? Are you raising it because you want to kill something? And it’s often a defeatist thing.
And then the jobs thing is such an interesting thing because it will change jobs. I mean, if you look, we used to have almost everyone working in agriculture and now we don’t. So I hope it changes jobs more than it is now, but what is that going to mean?
What it’s going to mean for a lot of people is it amplifies the productivity of a given person in a field, so a customer service rep can now service 10 times as many people, they can make more money, and there are going to be a lot of new opportunities for them to do new things.
I mean, what’s funny about the jobs things to me is that, it’s not funny because— Well, the thing with jobs is insofar as your job disappears because of AI, which is not as frequent as people think, guess what? AI is the best job trainer ever invented because what AI does is it allows you to learn anything and any skill incredibly quickly. It’s already doing this for almost anybody.
So AI solves itself with a jobs problem. But if the catastrophist scenario is AI is going to make us so rich that we don’t have to work. Yeah, that’s not our problem. And I wish it—
Rep. Eric Burlison (R-MO-7):
—Star Trek future.
Alex Epstein:
Most people who have $5 million a year don’t think they have enough. You think that AI is just going to do all this stuff? So what it’s really going to do is it’s going to liberate people and the poorest people will be liberated the most because they’re the ones who suffer most from this access to mental work.
That’s why you’re seeing, like I mentioned The Gambia. I was just reading a website, aisavedme.org. And there’s a guy just coincidentally from The Gambia who’s like, “This allowed me to become software developer.” Think about that.
Eric Burlison:
Right. My response is for people that have that attitude about the jobs and that people will be unnecessary is that you haven’t truly used advanced AI clearly because anyone, because like I was explaining before that, I installed OpenClaw, I use Hermes Agent, I’ve experimented with a lot of these more advanced AI tools.
And what you immediately realize is that you become the most important thing to the AI. If you create an agentic AI and you give it a job, it’s almost like an employee you say, “Your job is to go make money for me on Printify or whatever you’re going to do.”
It immediately sees that the AI needs you more than you need it. And so you become of tremendous value and yet you’re now creating an amplified value.
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