Monday, July 9, 2012

“The Energy Goal – Clean and Cheap, or Green?”

Sydney M. Williams

Thought of the Day
“The Energy Goal – Clean and Cheap, or Green?”
July 9, 2012

It is easy for the ‘monied’ classes to answer the question by saying, “green, of course.” But that, in my opinion, is the wrong answer. Benefits, on the left side of the ledger, must be offset with costs on the right side, not only in dollars but in human terms.

The rare derecho of two weeks ago – a long-lived, widespread windstorm that typically accompanies fast-moving thunderstorms – swept from the Midwest to the East Coast on June 29th knocking out power for five million homes, or almost 4% of U.S. homes. It was, like Irene of last August, another reminder of our utter dependence on electricity. Not only do we depend on electricity for the necessities like water, cooking and sanitation, but also for luxuries like air conditioning and entertainment, conveniences which we take for granted and for which we feel entitled. Stephen Moore, in a wonderful and humanized op-ed in the July 5th edition of the Wall Street Journal, quoted his eleven-year old son while they were experiencing a few days without electricity: “What did people do before the age of electricity? I would have killed myself.” While we smile, we know the truth of his complaint. Mark Steyn noted this past weekend that several East Coast cities cancelled Fourth of July celebrations because of a lack of electricity. The loss, he wrote, “was symbolic of a hyper-power at twilight.” That may be an overstatement, but not by much.

Abundant and cheap energy has accrued to our benefit more than any other invention or discovery. It is responsible for our transportation and our heating and cooling. Its derivative, electricity, allows for fresh water in every home, has enhanced our food sources and supply and provides sanitation. It provides our entertainment and has improved our quality of life in immeasurable ways.

Electricity has raised everyone’s living standards. For example, the majority of the 46 million Americans deemed by government to be living in poverty today have air conditioning, two color TVs with cable or satellite, a DVD player and a microwave. Thirty-eight percent of these living in poverty have a personal computer. Sixty years ago most of these items were unavailable, and those that were, were available only to the wealthy. Poverty today in the U.S. is not your grandfather’s version.

Electricity is a relatively recent invention. When I was born, in 1941, 65% of farms and one out of five homes in America did not have electricity. During these sweltering July days it is worth recalling that it wasn’t until after World War II that mass-produced, low-cost window air conditioners became possible. In 1947, 43,000 units were sold in the U.S. By 1953, a million window units were being shipped, but it wouldn’t be until the early 1960s that they became common place. If you wanted to cool off, you went to the movies. Almost a quarter of all Americans are 18 or younger. Most of them cannot conceive what it was like to sleep in ninety degree temperatures with nary a slight breeze to rustle the curtains. Most of them cannot imagine what it would be like to live without an I-Pod or X-Box. Electricity is not something we think about. It is a condition we take for granted. Having lived almost three quarters of a century, I can assure you that anyone who tells you that things were better in the past are completely delusional, at least in terms of personal comfort and convenience.

From 1882 when the first coal-fired electric power plant opened in New York City until about thirty or forty years ago the emphasis was on the provision of cheap electricity – allowing the average person to live more comfortably and productively. As we became wealthier, we worried increasingly about the environment. We wanted the comforts that electricity afforded, but we also became more aware of the toll this ever-expanding demand for energy was having on the world around us. In the last couple of decades, we have been made to feel guilty, that our random, and selfish, discharge of carbon emissions has been creating global warming. It may have abetted natural trends in place, but man is not solely responsible for climate changes.

But even without the fear mongering, markets were beginning to change, adapting to changes in behavior. We didn’t need Al Gore or Michael Moore (who are actually more interested in making themselves rich than in making the planet a better place) patronizing us with their supercilious criticisms. Free market forces were already at work. Clean coal was developed and natural gas has become increasingly prevalent.

Nuclear was preferred by many, as being “carbon free.” The Fukushima Daiichi meltdown, following the devastating earthquake and tsunami in Japan last year (and Chernobyl sixteen years ago,) pointed to the risks of nuclear generated power. Disposing of spent nuclear rods has long been a problem. So renewables – wind and solar – came to be considered. But, even they have problems. They are dependent on geography and the inconsistency of the weather. There are the costs, which today are prohibitively expensive. Solyndra was an expensive lesson. Enormous tracts of land are required for wind turbines and they have consequences for migrating birds. In short, there is no free lunch. In a weekend editorial entitled, “The Price of Green Virtue,” the Wall Street Journal estimates that a comprehensive climate change law, AB 32, California passed in 2006, which with its cap-and-trade tax was supposed to create thousands of new jobs and add to the state’s GDP. Instead the estimates are that California’s GDP will have been reduced by between 3.5% and 8.9% by 2020; their unemployment is 10.9%, significantly above the national average, and the estimated annual cost per California family for this climate change law has been put at $2500.00 – not much for the monied classes, but a lot for the average family.

When government usurps private markets, the consequences too often are unfortunate – unforeseen to them, but predictable to us. On July 2, The U.S. Navy unveiled a program to transform themselves into a “green” fleet.” The process which utilizes a blend of biofuels and petroleum raises fuel prices from roughly $3.60 per gallon to $26.00 – a cost increase of about $27 billion based on the navy’s estimate of annual fuel consumption of approximately 1.26 billion gallons. (We already know that the Bush program of increasing the content of ethanol in gasoline has benefitted corn farmers at the expense of consumers.) In the past three and a half years, the Administration has lost about $4 billion of tax payer’s funds investing in wind and solar companies that have declared bankruptcy – companies often run by big donors or bundlers.

Last week, the New York Times reported on troubles at the San Onofre Nuclear Generating Station in California. The station has been shut down for about five months because of a small leak of radioactive steam caused by deteriorating steam tubes that had been damaged by vibration and friction. While the plant dates back to the 1960s, Southern California Edison spent $700 million in the past two years – paid for by ratepayers – to install two new steam generators. Whatever the cause, Damon Moglen, a spokesperson for Friends of the Earth is quoted as saying that “California could be the first really big state to come to grips with a post-nuclear energy program.” But, since environmental groups don’t like fossil fuels no matter how clean they have become (and neither does President Obama), and if nuclear is off the table, what are we left with besides wind and solar? Today those sources provide less than three percent of our needs? Per Peterson, a professor at the University of California at Berkley is quoted in the Times article: “Do we turn off nuclear plants, or do we turn off coal plants first? You have to do one or the other.” I would suggest that the real question is: What happens if both are turned off?

Energy, and the electricity it creates, is responsible for most of life’s necessities and comforts. Cheap energy is integral to the continued improvement of our living standards. However, I also recognize that environmental considerations have improved the quality of our lives. Soot from coal-fired furnaces emanated from most every New York City apartment seventy-five years ago, polluting the air we breathe and damaging our lungs. It no longer does. Most of our lakes, rivers and seas are cleaner than at any time since the start of the Industrial Revolution almost two hundred years ago. I am not unmindful of the role regulation has played, but neither should environmentalist extremists be unaware of the natural forces that consumers operating in free markets have contributed in terms of clean coal and natural gas. There is a natural desire among people to improve their living standards, but at a cost they can bear. Additionally, we have the decided advantage that both coal and natural gas are abundantly available, at low prices, within our borders.

Going “green” may resonant well with coastal elites, but it ignores the costs, in human terms, to all our lifestyles, especially poor and middle income people. To ignore our domestic resources means to step back in time to a place no wants to go.



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