Iran war exposes U.S. energy policy folly
America needs an 'all-of-the-above' strategy, not an 'either/or' whipsaw
(Bill Sternberg is a veteran Washington journalist and former editorial page editor of USA Today.)
PORT ST. LUCIE, Fla. (Callaway Climate Insights) — For as long as I covered Washington, the energy debate was predictably partisan.
Republicans and their fossil-fuel industry donors championed underground sources: coal, oil, natural gas. Democrats and their environmental allies promoted above-ground sources: wind, solar, hydropower. Policies shifted back and forth depending on which party was in power.
The war with Iran exposes the folly of this either/or paradigm.
President Donald Trump inherited a reasonably good plan for cushioning the type of oil shock caused by the Strait of Hormuz closure. The plan was Joe Biden’s climate law, dubbed the Inflation Reduction Act. The IRA provided tax credits to encourage people to buy or lease electric vehicles, insulating them from gasoline price spikes. It provided hundreds of billions of dollars in subsidies for renewable energy.
Unfortunately, last year Trump and Republicans in Congress blew up most of the IRA — much as Trump, in his first term, discarded the agreement the Obama administration had brokered to restrict Iran’s nuclear program in exchange for relief from international economic sanctions.
The IRA was projected to reduce U.S. petroleum consumption by about 13% by 2030, making American consumers and businesses less vulnerable to global market disruptions. Following the end of the federal tax credit on Sept. 30, U.S. sales of battery-electric vehicles plunged 36% in the fourth quarter of last year, compared to the fourth quarter of 2024. Republicans would be in less political peril now if more people were driving EVs.
At the same time, the United States would be in more peril if environmentalists who wanted to leave the oil in the ground — opposing fracking and new pipelines — had carried the day. One of the big stories in the Iran war is what hasn’t happened: gas lines and rationing of the kind that occurred during the Arab oil embargo of 1973 and 1974. (Yes, children, back then we could only put limited amounts of gas in our tanks on certain days of the week depending on the last digit of our license plates.)
At the time of the oil embargo, the U.S. produced about 63% of its oil consumption. That dropped to one-third in the mid-2000s. Then, thanks largely to advances in drilling, U.S. crude output rose dramatically. Today, the nation has achieved net zero — not on greenhouse gas emissions, but on oil imports.
That energy independence is a good thing. EVs might represent the future of transportation, but more than 250 million vehicles with internal combustion engines are on U.S. roads, and they’ll need fuel for many years to come.
With AI data centers driving a surge in demand for electricity, the reality is that the U.S. can no longer afford to be stuck in the fossil fuels-versus-renewables dispute. What’s needed is an “all of the above” strategy, one that recognizes both the importance of capturing carbon and the limitations of clean-energy sources.
Some small signs suggest that this is starting to happen. Support for solar energy is rising on the MAGA right. (Trump’s visceral hostility toward wind power, however, shows little sign of abating. The administration is reportedly going so far as to offer TotalEnergies (TTE) nearly $1 billion to scrap its offshore wind farms.) Interest in EVs is perking up again as gasoline prices soar. Democrats and Republicans in Congress continue to discuss a possible deal to ease permitting for energy projects.
On the left, environmentalists are expressing unprecedented support for nuclear power, which has long been regarded as the accident-prone forgotten stepchild of the energy mix. Al Gore, John Kerry and the Natural Resources Defense Council have all moved toward more pro-nuclear stances. Indeed, as carbon-free sources of continuous electricity generation, fission and eventually fusion might well hold the key to saving the climate in the AI era.
It remains to be seen whether the war with Iran turns out to be a success, a debacle, or something in between. But if the conflict helps prompt the political right to reconsider its reflexive opposition to renewables, and the political left to acknowledge that green-energy alone is insufficient, that wouldn’t be a bad byproduct.
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