Perspective and theory

Earlier today, I wrote about the historically high gas prices and how each party inside the Beltway is blaming the other. This is the second part of what might be called a rant, but it’s not totally of my doing.

Yesterday I found another interesting perspective courtesy of a blogger associated with the trade magazine Engineering News-Record. His suggestion? Quit whining.

But while Tom Armistead has the correct title, he comes about his solution from the wrong perspective:

(A)n honest look at the car, oil, electric and other energy-intensive markets over the last 35 years will unveil another culprit: you, me and all the other consumers who have taken advantage of the unjustifiably cheap energy we’ve enjoyed and come to expect as our birthright.

I’d truly like to know what price he thinks is justified for energy. Somewhere in the back swamps of my mind I recall reading that, in its infancy, nuclear power was supposed to become available so cheaply that there would be no need to meter it. Obviously that didn’t turn out to be the case.

Instead of answering, Tom points the finger at the usual suspects:

Look out the window at rush hour on your way home tonight and note all the SUVs and even Hummers inching along the highway. Without high prices squeezing us, we don’t moderate our energy demands. We have met the enemy and he is us.

It’s that evil capitalism and wanting to enjoy those things you’ve coveted and purchased via a free market! Damn, I hate it when actually living a semi-affluent lifestyle in a thriving economy creates a demand for energy.

And once again, Arnistead proves that hindsight can always be considered 20/20:

Taking the long view, we might have acknowledged that any fuel that formed deep in the earth over millions of years eventually will be exhausted if we keep extracting it at the current rate. After admitting that and agreeing that it means we need to reduce our consumption and invest in research and development of technologies for renewable energy and renewable fuels, we might have formulated policies that would require us to pay a premium for using gasoline instead of renewable fuels. Europeans have paid far higher prices than we do for years. The policies also might have encouraged the R&D over an extended period, allowing us to spread out the cost. That we did not is a failure of leadership by our government supported by a craven short-sightedness of our people. We could have demanded action; we did not.

(snip)

I read in the paper today that opponents of the Climate Security Act now being debated in Congress are not questioning the science behind theories of climate change, but are basing their opposition mainly on the cost of reducing CO2 emissions. My question is, what is the cost of NOT reducing CO2 emissions? I believe an honest look at the answer will show it’s time to start paying our way. (Emphasis in original.)

Actually, I DO question the science behind the theory of climate change, a point I’ll expand upon shortly. For the moment, I have to question whether Tom knows much of anything about a free market. Obviously the cheapest method of getting the most energy for transportation needs is through oil refined into gasoline, with another drilling by-product, natural gas, priced by the market in such a way that it’s commonly used for both heating homes and producing electricity.

Unfortunately for Tom’s theory, the cost of renewable energy remains prohibitive enough that much of its use depends on government subsidy to skew the market in its favor. Arnistead would have us believe that placing a punishing premium on using oil would force alternatives to be used, but all that would accomplish is fattening the coffers of those who levied the fees. Think of cap and trade.

And then there’s the question of reliability. One example can be found in neighboring Delaware, where Bluewater Wind has been in a protracted battle with Delmarva Power over a proposed offshore wind farm. While Bluewater claims that they would be able to maintain a set price of 12.535 cents per kilowatt hour for 25 years, Delmarva Power contends that an onshore wind farm would be able to create the same kilowatt hour for just 8.55 cents. Apparently neither of these factor in the backup sources (e.g. fossil fuels) which would be required when the winds don’t blow, and both of these bids beg the question: if wind blows for free, why should we pay anything? Just like sunshine is free, it’s obvious that alternative energy must be expensive because either it’s unreliable or the required infrastucture to convert one energy source to a more useful one isn’t cost-effective without a government subsidy, or both.

I think I have a better idea, and I’m going to couch it in much the same terms as Al Gore hyped global warming in An Inconvenient Truth – basically saying that we can’t conclusively prove it exists but we need to do something about it and quickly!

My theory is that we should just go right ahead and try to exhaust all of those resources which Arnstead frets are finite as quickly as possible, because if we do nothing our economic doom is nigh. We may not even last 20 years if nothing is done.

And I have plenty of evidence that this theory is valid. Look at what the cost of gasoline is doing to the economy. Can we sustain our living standard on $4 a gallon gasoline?

For those who say that the potential for environmental disaster awaits if we drill and transport more oil, let me ask you when the last large oil spill was? Prince William Sound isn’t the barren wasteland for wildlife many feared, and even the most pessimistic prediction is for full recovery in 30 years. Meanwhile, the mistakes made became lessons on how to transport oil more safely, and what doesn’t make news are the millions of barrels of oil which arrive safely at their destination.

While some tout the green-collar jobs that await once the movement toward alternative energy kicks in, we have a number of companies with a lot of capital to invest right now, particularly with the price for their product at a peak. Even a 50% drop in the price of oil from current levels would place the black gold at about $69 a barrel, certainly worth the risk in exploring domestically and bringing a much better stimulus to the economy than a government check which is simply like a payday loan against next year’s tax liability. Oh, and it might put some engineers to work as well.

Thus, instead of going hell-bent down a road to address a theory with little evidence but a lot of opportunity for an ever-expanding federal and international government to get its claws deeper into the American taxpayer’s wallets, why not work with my theory – one that looks to the private sector to create jobs and insure a more stable energy supply that’s tried and true.

Then we won’t be looking at the SUV as an evil, but a choice made in the best interest of its owner. 

This post is also my debut crosspost on That’s Elbert With An E.