Understanding The Link Between COVID-19, Renewable Energy, and U.S. National Security

July 2, 2020

Understanding The Link Between COVID-19, Renewable Energy, and U.S. National SecurityAndy Marsh, CEO Plug Power

This weekend we look forward to celebrating not only the birth of our country, but the military men and women who fought and continue to fight for our independence. Of course, one of the best ways to celebrate the military is to take stock of the current world and find ways that conflict can be avoided, keeping not only our country, but our troops safe. In this piece, CEO Andy Marsh explores how renewable energy and U.S. national security are linked and why support for renewables is more important than ever for the security of the American people.  

The COVID-19 pandemic has sent shockwaves rippling throughout the global economy, and the energy sector is no exception. Social distancing measures have brought travel to a near standstill and forced many businesses to shutter their physical locations, resulting in reduced energy consumption across the board. This falling demand may spell trouble for renewables, but it has already led to all out war in the oil & gas sector, with the conflict between Russia and Saudi Arabia now pushing hundreds of U.S. firms to the brink of collapse. If nothing else, the Russian-Saudi oil war has underscored the importance of renewable energy to long-term U.S. national security interests. Unfortunately, clean energy advocates have good reason to fear that American policymakers aren’t getting the message. 

How COVID-19 Sent Global Oil Markets into Disarray

For those who haven’t been following the Russian-Saudi oil war, it may be difficult to understand how a public health emergency has not only caused oil prices to fall, but sent them plummeting into negative territory—an historic development that has occurred within the space of just a few weeks. The story begins, of course, with the coronavirus outbreak in Asia, and specifically with the sharp decline in the continent’s oil consumption that has accompanied the spread of the virus.

In early March, the Organization of the Petroleum Exporting Countries (OPEC)—a cartel of 15 countries led by Saudi Arabia—met to discuss its response to the global drop in oil demand. Representatives from Russia, which is not a member of OPEC but has coordinated with the group since 2017, were also included in the conversation. At this meeting, Saudi Arabia asked that all participants make significant cuts to their oil production in an effort to shrink market supply and keep oil prices high. The Russians opposed the plan and have refused to participate. 

In retaliation, the Saudis began slashing their own oil export prices, initiating a price war between the two countries. This has driven ripple effects across the global oil market, precipitating a drop in oil prices that has culminated in an all-out market crash, with oil prices plunging below zero for the first time in history. Now, a conflict begun by countries situated halfway around the world is posing a looming threat to the U.S. energy sector. Falling oil prices could send hundreds of U.S. oil companies into bankruptcy, potentially adding thousands of workers onto the country’s already-swollen unemployment rolls.

Why Energy Security Is National Security

However, this isn’t the first time that the whims and squabbles of foreign oil producers have led to disastrous outcomes for the U.S. energy sector—far from it. Perhaps the most famous example is that of the 1973 oil crisis, which saw a coalition of Arab oil exporters impose a substantial embargo on oil shipments to the United States. This embargo caused a sharp increase in oil prices, as well as widespread fuel shortages across the country, and contributed to the start of a global economic recession.

The 1973 oil crisis helped popularize the concept of “energy independence,” and threw the perils of America’s reliance on foreign oil into sharp relief. American policymakers quickly came to understand that major oil producers like Saudi Arabia could leverage their oil exports to exert enormous influence on the geopolitical landscape, and that the U.S. itself would have little recourse, despite its military might. As a result, the pursuit of increased energy independence became an important policy goal for the United States, and continues to be a top priority today

Renewables: The Most Secure Energy Supply of All

For years, academics and clean energy advocates have argued that renewable energy sources can and should play an important role in the effort to achieve greater energy independence. The most obvious reason for this is what we might call the inalienability of renewable energy sources. While fossil fuels are an inherently limited resource, Americans will always have access to energy sources like sunlight and wind, which can be stored for long term usage as clean-burning hydrogen fuel.

What’s more, unlike the aging and unstable U.S. power grid, renewables are less vulnerable to cyber attacks and system failure. Renewable energy sources can be deployed to circumvent the power grid entirely, and their more broad-based implementation might just be the incentive the U.S. needs to make much needed repairs to the grid itself. 

Renewable energy also offers well-documented advantages for military operations, and —of course—renewable energy is also good for the environment. Countless studies have proven that a clean environment creates a healthier and happier population, which is the ultimate goal of all national security policy.

Supporting The Renewables Industry Is More Important Than Ever

For U.S. policymakers, the ongoing oil price war should serve as a potent reminder of the fact that countries like Russia and Saudi Arabia still exert powerful influence over the global oil market, and that this influence can have dire consequences for the U.S. economy. The renewables sector, by contrast, is all but impervious to this kind of foreign interference and, as a result, has the potential to strengthen U.S. energy independence and national security as a whole. It’s no surprise that senior European Union officials have recently signaled that renewable energy has become a top security priority.

However, the renewables market has been hit hard by the coronavirus pandemic. Businesses in the sector now face numerous challenges, ranging from frozen project pipelines and missed deadlines for existing projects, to rapidly falling sales projections for electric vehicles and other key products. Policymakers should be applauded for working quickly to legislate emergency relief funding providing aid to those impacted by COVID-19. Now, as they consider additional legislation designed to aid in the recovery to come, it’s more important than ever that they show strong support for the renewables industry through tax credits and other financial incentives. This will help ensure both America’s clean energy future and its national security interests for years to come.