In October of 2008 I opined on several political topics that included political reform and energy policy [http://aberantnews.org/?m=200810]. But the topic of energy was only a surface scratch. The issues facing true policy reform are broad and complex.

There are many types and applications of “Energy”. While the general public and media focus on “Oil” and gasoline prices, the fact is that we need to power industry, homes and buildings, communications, rolling commerce and mass transit – as well as individual transportation.

Each energy solution or application has its draw backs. For instance:

• Solar – Generating power on a cloudy day, storing power at night and maintaining reserves, cost of technology and land required,…
• Wind – Cost to maintain 100 generators that produce the same output as one hydraulic generator; generation in low-wind, maintaining reserves, large areas of land required in wind corridors,…
• Natural Gas – Costly technology (all the ‘easy gas’ has been extracted), depletion rate (non-renewable fossil fuel), many production ‘fracturing’ methods endanger ground water and the environment,…
• Coal – Serious emission issues, no such thing (yet) as Clean Coal, non-renewable fossil fuel, high cost in technology to make coal environmentally viable,…
• Nuclear – Extremely costly technology, major safety and waste disposal issues, time to build and bring online is excessive,…
• Hydrogen – Support & delivery infrastructure costs are immense, resources needed to create, refine and store hydrogen are very high, use in transportation limited with current technology,…
• Biofuels – Food crop depletion, high energy cost (it takes 90% of the energy in a gallon of corn ethanol to create a gallon of corn ethanol),…
• Oil – Increasing depletion rate (non-renewable fossil fuel), largely a non-domestic resource, petrochemical industry requirements go far beyond ‘gasoline’, need to protect strategic reserves, environmental impact of drilling,…

Unfettered competition is best equipped to address these drawbacks and solve the problems. There is no such thing as a ‘perfect’ solution. Today’s hybrid vehicles all use some type of non-renewable fossil fuel. Even the pure electric car owner will have to face issues with battery and toxic fluid disposal sooner or later. Not to mention where all the extra electricity will come from in a power grid that can barely handle today’s demand.

The real challenge for government is how to empower American business to solve specific problems and develop renewable, sustainable technologies without actually subsidizing any given solution. Things such as corn ethanol subsides and energy company tax breaks need to be assessed and discontinued if the are doing more harm than good to our energy future (which most of them are).

Business and competition is best served when government controls the cost of remedies and their source. For instance:

• Tax credits against windfalls for energy industry production of renewable sources as a percent of overall sources.
• Hazardous waste taxes that increment over time to pay for disposal and sequestering waste; and promote reclamation and recycling technology.
• An annual rise in oil tariffs that would make imported oil/fuels 2 to 3 times more expensive than domestic sources in 8-10 years.
• A zero emission vehicle (ZEV) mandate for autos (e.g. 5 years, 50% of autos sold must be ZEV, 100% in 10 years).
• A 50% zero emission mandate for domestic power generation in 8 years; 75% in 15 years, and 100% in 20 years.

Then get out of the way and let Darwinian Economics (natural selection, survival of the fittest, etc.) take over. Just as in nature, the carnage could be significant before equilibrium is found. But the result will be a sustainable future for our country and, indeed, the world.

Rather than spending money on subsidies our government should use taxpayer dollars to hire more EPA agents and implement monitoring technology to insure the health and welfare of the public. Allow American ingenuity to solve our energy problems within the environmental and regulatory guidelines already established for public welfare.

Much like a championship football contest, the referees should not control the outcome of the game, only the way in which it is played. This too should be the role of government in energy policy.

JB

Sources:

Lustgarten, A. (2008). Drill for Natural Gas, Pollute Water?, Scientific American Magazine, retrieved November 18, 2008 from: http://www.sciam.com/article.cfm?id=drill-for-natural-gas-pollute-water

Mufson, S. (2007). Article: Oil price rise causes global shift in wealth; The Washington Post, retrieved October 25th, 2008 from: http://www.washingtonpost.com/wp-dyn/content/article/2007/11/09/AR2007110902573_pf.html

NOW. (2006). Transcript: Who killed the electric car?; Public Broadcasting Service (PBS); retrieved October 25th, 2008 from: http://www.pbs.org/now/transcript/223.html

Pickins, T. (2008). America is addicted to foreign oil; T. Boone Pickins; retrieved October 25th, 2008 from: http://www.pickensplan.com/theplan/

Wood, J. (2008). A Solution for General Motors, Seeking Alpha, retrieved Nov 15th, 2008 from: http://seekingalpha.com/article/106216-a-solution-for-general-motors

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