Tariffs Could Delay Renewables And Make The US Irrelevant

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Kingsmill Bond has been involved in the world of clean energy and sustainability for over 30 years. He was previously an energy analyst for the Rocky Mountain Institute and is now an energy strategist at Ember, a climate and energy consultancy with its home office in London. After the turmoil created by the recent tariff policies enacted by the United States, he told Inside Climate News those tariffs could actually help the world move away from its fossil fuel addiction. “The bottom line is that the world runs on imported fossil fuels under the umbrella of the Pax Americana,” he said. “As Trump destabilizes that, then people will look to their own domestic energy sources, which in most cases means renewables and electrification.”

If that prediction turns out to be true, it would marginalize the United States and enhance the independence and political power of other nations. While he remains optimistic about the growth of renewable energy, heat pumps, and the EV revolution globally, he sees a slower and dirtier path for the US. Bond argues that since most countries do not have plentiful oil and gas within their borders, they need to import fossil fuels. They also need to have confidence in their supply of fossil fuels and the prices they must pay for energy. As that confidence erodes, they will look to alternatives, Bond says.

Most countries do not have the ability to manufacture renewable resources like solar panels, wind turbines, or grid-scale storage batteries for themselves and must import them. The difference, he argues, is that a shipment of diesel or LNG powers the local economy for a few days or a few weeks whereas renewable technologies can power the local economy for decades. One way keeps them dependent on foreign suppliers; the other gives them independence from those same suppliers. Which is the smarter purchase? The answer seems obvious, at least to anyone how is not enthralled by MAGA Madness Syndrome. The fact that renewables do not add climate-warming gases to the atmosphere is a nice bonus.

Tariffs & Energy Security

Jeff Currie, chief strategy officer of energy pathways at Carlyle Investments, posted on LinkedIn this week that, “Security is now paramount. The energy transformation is on the cusp of re-accelerating. Nuclear and renewable energy are likely to continue to expand rapidly in the years to come. Fossil fuels, however, will also expand—just more slowly—as natural gas replaces oil and coal fades.” Climate concerns will take a back seat to the quest for security, he wrote, with nations creating a diversified energy mix across multiple sources to insulate themselves from geopolitical, macro, and financial risks.

Currie explains that “Security drives higher returns and faster transition. Fossil fuels are attractive as they can be traded. If trade is under threat, then so are fossil fuels. Non-fossil fuels are generally not traded and hence are local. These types of fuels thus become more demanded when security is paramount, which historically drives a more profitable, cleaner, and faster transition. ‘Peak Oil’ has already arrived as ‘Peak Trade.’ Fossil fuels are not disappearing any time soon, however, we are now likely seeing ‘Peak Oil Trade,’ particularly from China. If consumers are able, they will try to reduce their imports of fossil fuels, which in most cases will mean increasing their supply of nuclear and renewable energy. The green premium has already faded and the market is in search of a security premium.”

Currie’s analysis does not align with the “Drill, baby, drill” mentality of the current administration. If nations import less fossil fuel, then all those LNG terminals in the Gulf of Mexico are destined to become stranded assets almost as soon as they are built. Investors have been overly fixated with how energy is produced at the expense of how it is consumed, Currie maintains. “But all consumed energy is the same — it’s a joule. Produced energies differ — a molecule of oil, an electron of electricity, a ton of coal.” The legacy of the Net Zero 2050 investment boom between 2010 and 2021 is that it made renewable energy cost competitive, he says, but did not resolve system bottlenecks. It is those bottlenecks that have stalled the renewable energy revolution, not the renewable energy resources themselves.

Shell Envisioned Three Paths

In 2021, Shell published a report on energy transformation scenarios that envisioned three likely paths for the world. The first two were versions of a successful transition to carbon-free energy, although they differed in whether the shift would happen fast enough to meet the targets of the Paris Agreement. The third looked a lot like what is happening today, with tariff chaos roiling world economies, which Shell called the “Islands” scenario.

“In Islands, governments and societies decide to focus on their own security, with a new emphasis on nationalism threatening to unravel the post-war geopolitical order. Although the normal course of equipment and infrastructure replacement and the deployment of cleaner technologies bring progress and eventually net-zero emissions, the world overshoots the timeline and does not achieve the goal of the Paris agreement.”

Gernot Wagner, a Columbia University economist, told Dan Gearino of Inside Climate News this week that the tariff chaos of this past week is beyond absurd. “None of this is, in any way, shape or form, rational. We’ll all be poorer for it. The planet will be hotter for it.” One of the effects will be higher prices for solar panels after the US imposed a 46 percent tariff on Vietnam, which is a leading exporter of solar panels to the US. Even though that tariff has now been paused, it remains a Sword of Damocles over the heads of all the manufacturers, shippers, and importers involved in bringing those panels to customers in the US. Uncertainty throws sand — or gravel — in the gears of commerce, raising prices for everyone. “This is something I won’t sugarcoat. If you are a developer, installer or other business that uses solar panels or wind turbines, your life just got much more difficult,” Gearino wrote.

Treasury Secretary Scott Bessent told reporters on April 10 that Trump’s goal from the beginning was to get countries to negotiate new trade deals with the United States. “This was his strategy all along,” Bessent said. Horse puckey. The Moron of Mar-A-Loco has no idea what he is doing. All he knows is that the chaos he has created will induce some trading partners to “kiss my ass.” What a shameful, disgraceful excuse for a president he is. He isn’t making America great; he is making America the laughing stock of the world.

The New York Times reported this week that grid-scale battery storage will take a major hit from these cockamamie tariff policies. While the United States is increasing its manufacturing capacity for lithium-ion batteries, China remains the main supplier to the US market, and the costs of those batteries are set to soar with the latest round of tariffs. In other words, the US has now shot itself in the foot bigly — but it is not a problem, because new coal-fired generating stations will be coming soon. Does the so-called president even know it takes 5 to 7 years to build one of those facilities and bring it online? Not likely. “It’s not great if you’re US based now,” said Bond, the London-based analyst. “The global story is going to keep on going. The US, sadly, is going to get held back.”