Consider this...you are a electric company with several large coal plants and a desire to expand to meet growing demand. But given the current administration and congress's obsession with alternative fuels, its unclear what new laws, regulations, and research funding will effect the economic viability of a new plant. Would you want to start a multi-million dollar project, building a new electric power plant, when the outcome is so uncertain? What would you do? You could start research and investments in alternative fuels, but that return may be 20 years in the future. What about the increased demand in the next 5?
Here is my prediction. Current electric producers will underfund new development over the next 5 years because they are uncertain about the industry. Prices will begin a long rise. Politicians will react in predictable ways. They will cap energy prices. This will lead to shortages of energy leading to rolling brown outs and black outs (remember California?). Politicians will decry the "greediness" of energy companies and suggest higher taxes (like they did with the oil companies). And they will claim we need more incentives to switch to alternative fuels.
Just looking for investment opportunities.
Hi John,
ReplyDeleteFirst thank you. I have enjoyed reading your articles, an I appreciate your opinions.
I was taugh as fact in elementary school (Finland) that oil will get increasingly expensive and run out in 30 years. Far more years have now passed, and still there is oil for 30 more years. So I was lied to, but the fact remains: Eventually fossile fuels will be of short supply.
In long run we must adopt to other energy sources. If Al Gore is to be believed, we are already too late (joke: he must be farorite of ex. Mr Joseph Goebbels, just choose your facts and name it "inconvinient truth"). Ok, Mr. Gore will be excused for his poor science because of the good intent.
Back to your real topic. How to manage long term the change to renewable energy sources, without disrupting energy production in near future? Hard question.
Goverment could declare that any punitive actions on environment unfriendly energy production will apply only on investmens started after new legistlation. And that more environment friendly choices will not be financially supported, but have to compete on the same terms.
Best regards,
Pekka Lehtikoski
Pekka,
ReplyDeleteGlad you enjoyed it.
Yes, eventually fossil fuel reserves will run short. When will that be? 50 years? 100 years? Prior estimates always assume today's technologies. But looking at the world around us shows how quickly things change and how poor we estimate the future. To be worried about an energy source 100 years from now is crazy considering the rate of change in technology today. Consider 1909. There is absolutely no way that people from 1909 could have predicted the technology of today or the energy needs to power our technology. There are simply too many factors, too many changes in technology, too many innovative people coming up with innovative products in a constantly changing economic and political environment. When (if) fossil fuel prices get too high, I am fully confident some smart capitalists will find a way to make alternative energy. Government involvement simply isn't necessary and will most likely put money into inefficient energy sources (like ethanol).
I would also question Gore's intent (along with many environmentalists). Gore based his thesis on a weather modeling program that is highly controversial. Gore, when confronted with facts that contradict those in his book, reportedly dismissed the facts. Gore proposed government policies that would virtually destroy our economy. To what end? To save our environment? If an eagle is saved, but our economy is shattered, what has been gained? If the polar bears enjoy cold weather, but humans can no longer afford a house, where is the value? If the environment is saved but human lives are lost, what is Gore's purpose?
I recommend the essay “The Anti-Industrial Revolution,” in
Return of the Primitive: The Anti-Industrial Revolution by Ayn Rand. She does a great job of identifying the underlying principles involved with the environmental movement.
Cheers,
John
Hi John,
ReplyDeleteThank you for taking again time to write. Your agumentation is precise, and I have to realize thay you are right (altough disagreement would be more intresting). I ordered Ayn Rand's "Return of the Primitive".
Best regards,
Pekka Lehtikoski