Biden can help quiet those fears by supporting Manchin’s efforts to pair short-term commitments in traditional energy production to long-term investments in green technology. Ideally, such an effort would also include medium-term investments in terminals to export liquefied natural gas.
By backing such a complete portfolio, the president would show that he recognizes a full transition to green energy will take time — and that until it is completed, the West will get its fossil fuels either from the U.S. or from authoritarian regimes in Russia and Saudi Arabia.
The administration would also be sending a clear signal to U.S. oil and gas companies — which are now sitting on piles of cash — that the rug won’t be pulled from under them when the war in Ukraine ends. That will encourage them to spend their capital to expand fracking now, bringing prices down in the short term.
Environmentalists will undoubtedly object that investments in the U.S.’s capacity to export fossil fuels could lead to a decades-long rise in production. But this is the wrong metric to measure the value of this policy. What affects climate change is the total global consumption of carbon-intensive energy, not how much of that energy is produced in the U.S.
Providing the world with more U.S. natural gas will both decrease the global demand for coal (a far more carbon-intensive energy source) and give countries such as Germany room to reduce their dependence on Russian gas. Both of those effects will lead to a cleaner and more stable world — one more conducive to long-term investments in green energy.
Of course, supporting Manchin would require Biden to stand up to the progressive left, some of which is fully committed not just to fighting climate change but to waging war against the U.S. energy industry. But that’s just the kind of political risk the White House needs to take to convince America’s frackers — and its voters — of its long-term commitment to low energy prices.
More From Bloomberg Opinion:
• Manchin’s Climate Catchphrase Is Complete Nonsense: Liam Denning
• Want Green Energy? Cut Red Tape: The Editors
• The Second Wave of the Russian Oil Shock Is Starting: Javier Blas
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Karl W. Smith is a Bloomberg Opinion columnist. He was formerly vice president for federal policy at the Tax Foundation and assistant professor of economics at the University of North Carolina. He is also co-founder of the economics blog Modeled Behavior.
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