In a commentary on Thursday's Marketplace, the Cato Institute's Will Wilkinson critiqued T. Boone Pickens' new energy plan. In doing so, he painted a misleading picture of the government's role in our energy usage.
Pickens wants wind energy to replace natural gas in electricity generation, and use the freed-up natural gas to fuel vehicles so we can use less foreign oil. There are problems with this energy plan, but Wilkerson is most concerned that the government might be "picking a winner" if it helps Pickens realize his scheme. (Wilkerson doesn't specify exactly what Pickens wants the government to do, but Reuters reports that under the Pickens plan, the government would need to create power transmission corridors.)
Wilkerson doesn't seem to think the government should get involved; his criticism of the Pickens Plan is that it's "not about offering you, the consumer, a choice." This is where he overlooks one crucial factor in the energy puzzle. He says:
If wind power were more efficient than the alternatives, we'd already be using more of it. If natural gas cars were attractive to consumers, we'd already be driving more of them.
The "choices" we've supposedly made -- to get much of our electricity from coal and fuel our cars with gasoline, and to deal with the resulting health and environmental consequences -- have been shaped by several decades of the government picking winners.
The Environmental and Energy Study Institute broke down [PDF] the Department of Energy's R&D expenditures from 1948-2003 and found that approximately $74 billion (56 percent of the total) went to nuclear energy; $31 billion (24 percent) to fossil fuels; and $15 billion (11 percent) to renewable energy sources. Authors from the economics firm Management Information Services, Inc. totaled up federal energy incentives (mostly tax breaks) from 1950-2003, and reported, "Oil accounted for nearly half ($302 billion) of all federal support between 1950 and 2003." Renewables got less than 10 percent.
There's also the larger problem of fossil fuels' externalities -- the climate disruption, air pollution, and other environmental problems that come along with oil and coal use, but aren't reflected in the price consumers pay. It's hard to think of a way of a addressing this problem that doesn't involve government intervention.
Pickens' plan isn't one of the best solutions to our energy problems (for one thing, natural gas is a finite resource for which extraction is destructive), and there's plenty to criticize about Pickens himself and his latest ad. Wilkerson should have stuck to those critiques rather than giving an incomplete and misleading picture about government's role in shaping our energy options.
This post was created for The Pump Handle, a public health blog.
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Comments
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Gustavion Posted 5:22 am
01 Aug 2008
Simplestop.net - Stop postal junk mail, Protect the environment, Protect your identity.
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Sean Casten Posted 5:29 am
01 Aug 2008
Unfortunately taking money from established vested interests is politically hard. As a result, most of our energy policy conversation is framed not around playing field leveling, but instead trying to erect ever greater distortions so that the past-generation's losers can get picked as co-winners in the next round. All shall have prizes.
By this logic (with which for the record, I don't like), it's OK to subsidize natural gas vehicles in the name of putting them on a level playing field with gasoline-fueled vehicles and their existing subsidies. It's the same logic that subsidizes coal and nuke, and then provides production tax credits for wind to help it compete against those subsidized alternatives. And on a much smaller scale, it's the same logic that says if you buy one of your kids a Wii, you have to buy a Playstation for the other.
None of this is meant to defend Cato, nor winner-picking since - as you note - their logic simply doesn't hold. But there is a realpolitik argument (subject to dispute, of course) that says that since subsidy removal is politically hard, we are better off simply doling out more subsidies. Wider and wider does that falconer's gyre spin, and the center cannot hold. But it is (sadly) the gyre we're on.
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amazingdrx Posted 5:30 am
01 Aug 2008
But with plugin hybrids that reduced fuel use 80%, naqtural gas could be a substitute for imprted oil. But it wouldn't be needed. Domestic oil would last long enough to fill the plugin hybrid gap, over the 20 years it would take to arrive at zero fuel use.
http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin
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KenG Posted 5:49 am
01 Aug 2008
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Jon Rynn Posted 5:53 am
01 Aug 2008
But then, I'm not sure if they deny global warming or not, because to accept the reality of global warming would mean that 1) either they blame the entire mess on government, which is pretty hard to do, or 2) they admit that the market can lead us right over the cliff, which they certainly can't, they're whole reason for being is to argue that the market should do it, not the government.
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GreyFlcn Posted 5:58 am
01 Aug 2008
His NaturalGas/Wind proposal has far more to do with Water, than anything else.
http://www.ecogeek.org/content/view/1951/
-David Ahlport
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Wolverine Posted 6:36 am
01 Aug 2008
My European friends are always negatively amazed at the idiotic individualist attitudes in the U.S. Humans are social animals and societies cannot function adequately if everyone just does what (s)he wants. There's nothing illegitimate or bad about subsidies per se, it's what's being subsidized that's the problem.
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amazingdrx Posted 7:04 am
01 Aug 2008
This is a sort of corporate feudal religion, invented by economists. It's a gospel.
If government diverts subsidies from the old energy economy, directly to consumers, on a per GHG free kwh generated or saved, for home solar systems and ground source heat systems, and so forth.
Consumers will decide which systems they prefer, on the basis of how many kwh thety produce and how fast they pay for themselves with subsidy checks and energy savings.
NREL and others can determine how effective different systems are at producing GHG free energy. Power companies count the kwhs, and government can issue checks, straight to homeowners.
Real consumer choice and real free markets, subsidized and encouraged, mission acomplished.
http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin
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ronwagn Posted 7:48 pm
01 Aug 2008
For that reason, I will probably be voting for Obama since he has a much better grasp of the energy field than McCain, and I see this as the most important issue we face. Energy independence, health and economic growth will all be greatly benefited by alternative energy technologies, and a cleaner environment.
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stopgreenpath Posted 1:51 am
02 Aug 2008
Big Energy has abused the public trust countless times by destroying our wilderness, polluting our air, poisoning our waterways, ruining our views, taking our homes, and ripping us off - all on our dime, and our land - while MASSIVELY profiting. OK, our bad for letting them get away with it for so long, but until now we didn't really have a choice. NOW WE DO - will we take it?
Let's start with a massive push for point of use renewables by offering serious tax credits, subsidies, feed in tariffs and loan programs for every property owner wishing to install PV, solar thermal or microwind on their previously developed property.
In 50 years (a shorter period than Big Energy got subsidized), these breaks should phase out, and we can take a look at where we are, and consider the playing field leveled. People can choose to re-enslave themselves to Big Centralized Energy if they like, or to maintain the independence they have come to enjoy. Who knows, Big Energy might even adapt their business model to remain relevant in a distributed-energy future?
What you can't do is feed steroids to one team for 60+ years, refuse the other team access to a gym, then send them to the Olympics to "compete" against each other. That's not a "free market." That's a bloodbath.
the greenest energy is that which you needn't ever produce.
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Biodiversivist Posted 4:18 am
02 Aug 2008
In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world
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GreyFlcn Posted 5:32 am
02 Aug 2008
Any idea where that got to?
-David Ahlport
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