The real cause of blackouts

Sometimes (well, often) you just want to say: down with the state! Consider that an outburst, the kind you feel like making when the lights won't come on. And the heat wave - and the public utility response - is the news that prompts it. All last week, major parts of Queens, New York, were without electricity following a failure of power that plunged major parts of the city into darkness amidst sweltering heat for more than a week. For many, it was the Ten Days of Hell. There were thousands who were without air conditioning, lights, refrigeration, internet connections, and, well, modern life generally.

And get this: no one is sure why, precisely, it happened, other than to say that the system became overloaded. What will happen as a result? Hearings, reports, meetings, yammering, resolutions, reforms, and, in time, another blackout followed by hearings, reports, meetings, etc., all of which will be filed in that huge warehouse where all the other reports on past blackouts reside.

What do the consumers do about it? They follow the news and keep paying the bills, to the same company that let them down. They can't switch. They can't influence the production process. They are powerless in more ways than one. Meanwhile, on the other side of the country, California residents are putting up with blackouts, threats of more blackouts, denunciations from politicians, and even death: 56 people so far. All because of a heat wave, and all because the structure of the industry is not designed for extremes.

Now, if markets were in charge, a heat wave would not be looked at as a problem but an opportunity. Entrepreneurs would be swarming to meet demand, just as they do in every other sector that is controlled by markets. The power companies would be praying for heat waves! After all, do shoe manufacturers see a massive increase in footwear demand as a problem? Do fast food companies see lunchtime munchies as a terrible threat? On the contrary, these are profit opportunities.

Just who is in charge of getting electricity to residents? A public utility, which, in the absurd American lexicon, means "state-run" and "state-managed," perhaps with a veneer of private trappings. If you look at the electrical grid on a map, it is organized by region. If you look at the jurisdiction of management, it is organized by political boundaries. In other ways, the provision of power is organized precisely how a central planner of the old school might plan something: not according to economics but according to some textbook idea of how to be "organized." It is "organized" the same way the Soviets organized grain production or the New Deal organized bridge building.

All centralization and cartelization began nearly a century ago, as Robert Bradley points out in Energy: The Master Resource, when industry leaders obtained what was known as a regulatory covenant. They received franchise protection from market competition in exchange for which they agreed to price controls based on a cost-plus formula - a formula that survives to this day. Then the economists got involved ex-post and declared that electrical power has been considered a "public good," under the belief that private enterprise is not up to the job of providing the essentials of life.

What industry leaders received from this pact with the devil was a certain level of cartel-like protection, the same type that the English crown granted tea or the US government grants first-class postal mail. It is a government privilege that subjects them to regulation and immunizes companies from business failure. It's great for a handful of producers, but not so great for everyone else.

There are many costs. Customers are not in charge. They are courted only for political reasons but they are not the first concern of the production process. Entrepreneurial development is hindered. Our current system of electrical provision is stuck in time. Meanwhile, sectors that provide DSL and other forms of internet and telecommunication services are expanded and advancing day by day - not with perfect results but at least with the desire to serve consumers.

In markets, we aren't denounced for our "consumerism" and "greed"; if anything, it is courted and encouraged. Indeed, isn't this why markets are denounced? They encourage consumers to spend, spend, spend, consume, consume, consume. Well, think about the alternative. It exists right now with electrical provision. We are denounced for not wanting to live in 90-degree houses and sleep in puddles of sweat.

How New York and California consumers would adore a setting in which power companies were begging for their business and encouraged them to turn down their thermostats to the coldest point. Competition would lead to price reductions, innovation, and ever more variety of services - the same as we find in the computer industry.

What we are learning in our times is that no essential sector of life can be entrusted to the state. Energy is far too important to the very core of life to be administered by a bureaucracy that lacks the economic means to provide for the public. How it should be organized should be left to the markets. We can't say in advance. Whatever the result, you can bet the grid would not look like it does today, nor would its management be dependent on the whims of political jurisdiction.

What we need today is full, radical, complete, uncompromised deregulation and privatization. We need competition. That doesn't mean that we need two or more companies serving every market (though that was common up through the 1960s). What we need is the absence of legal barriers to enter the market. If that market is served by a single company, fine. Competition exists so long as the state is not prohibiting other companies from trying their hand.

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Hurricane expert queries global warming

Chris Landsea comes out fighting again

Historical data on hurricanes is not accurate enough to conclude that they are becoming more ferocious or that global warming is to blame, as some studies have suggested, a noted storm researcher says. In an article published in the journal Science, Chris Landsea, a leading researcher at the US National Hurricane Centre, challenged studies that found a dramatic jump in hurricane intensity in recent years. The paper is the latest salvo in the debate among climate scientists on whether human-induced global warming is producing stronger hurricanes.

The argument reached boiling point during last year's record-shattering Atlantic hurricane season, which produced 28 tropical storms and hurricanes including, for the first time in a single season, four of the most destructive Category 5s. Because of improvements in technology, including more and better satellites, forecasters now produce more accurate estimates of a storm's power, which could mean more hurricanes are now recognised as powerful Category 4 and 5 storms, Mr Landsea said. "It's a consequence of us better monitoring things the last 15 years than we did back in the '70s and '80s," he said.

Some climate scientists argue that global warming is causing more intense hurricanes, which draw their energy from warm sea water. Sea surface temperatures have increased about 0.55C in the past three decades, they say. Last year, respected researcher Kerry Emanuel of the Massachusetts Institute of Technology wrote in Nature magazine that the energy dissipated by hurricanes in the North Atlantic had doubled in the past 30 years. Another study, by Georgia Institute of Technology researchers and published in Science, found the proportion of hurricanes reaching Category 4 and 5 had nearly doubled in the past 35 years.

Mr Landsea is among a group of scientists who say the impact of global warming on hurricanes is not clear, and the studies do not account for inaccurate information in storm databases. "It's not to say that global warming isn't causing changes. I don't dispute the fact that global warming is going on or that it can have an impact on hurricanes," Mr Landsea said. He said researchers had data from only two geostationary satellites to monitor storms in 1975. Now, much better pictures were available from eight satellites. Today's scientists could get readings on hurricanes around the clock, where only daylight images were available decades ago. Together, the technology changes meant forecasters were more likely than in the past to determine that a hurricane had higher winds. "The hurricane doesn't change. But you're getting a better analysis of how strong that hurricane is," Mr Landsea said.

The Science article said reanalysis of historic data had found about 70 previously unrecognised Category 4 and 5 hurricanes in the eastern hemisphere from 1978 to 1990. Such a finding would weaken the argument that the number of intense hurricanes is rising. "For some of the storms in the north Indian Ocean, if they were to occur today, we would say they are Category 4 or 5 and yet they are listed in the data as Category 3 or weaker," Mr Landsea said. A cyclone that hit Bangladesh in 1970 and killed up to 500,000 people was not even listed as a hurricane, he said.

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Stupid British Leftists ignore reality

Leftists are good at that

Whatever we say or do, they will burn the coal. Neither preaching nor politics will stop the mining and burning. Furnaces will be stoked, hydrogen molecules will ignite and millions of tonnes of carbon dioxide will be released as China and India burn the fuel that lies under their feet. This simple truth, which stands out like a sore thumb from any book of energy statistics, is ignored by our Government, which has turned the pursuit of carbon-free energy into a moral crusade. Yesterday, after years of prevarication, the Prime Minister's energy review backed the construction of nuclear reactors to replace ageing plant soon to be decommissioned. No more pandering to the green lobby (the Cabinet's own Greens were sacked or sidelined), because Tony Blair has belatedly discovered a gaping hole in the nation's future power supply which cannot otherwise be filled except by fossil fuels.

There will be lots more windmills and more nukes, because the Government believes reducing carbon is a moral issue, like binge drinking. This absolutist view is shared by few nations and acted on by none, bar one. Britain was alone in imposing onerous carbon limits on industry in the EU's carbon trading scheme. Most of Europe was lenient, setting easy targets for emission reduction, and as a result the price of a carbon permit fell sharply - the cost of pollution fell.

What happened? The price mechanism came into operation. Britain's power generators looked at the price of coal - cheap. They looked at the price of carbon permits - cheap. The price of gas - expensive. Power companies stuffed their coal-burning generators to the brim, earning a mint from the widening "dark spread", the margin between the cost of coal and the price of a kilowatt of power. Power companies everywhere are looking at the fattening "dark spread" and comparing it to the thinner "spark spread" and "quark spread", respectively the margins from gas or nuclear power generation.

Global coal consumption rose by 5 per cent in 2005, a year in which the overall rate of growth in energy consumption declined from 4.4 per cent to 2.7 per cent, according to BP's Statistical Review of World Energy. More coal means more carbon and global emissions rose 3 per cent, higher than the rate of energy use. Oil and gas are dear, so the world is looking for a cheap burn and the price mechanism, always reliable, is pointing to coal. There is an awful lot of it about - 155 years of proven coal reserves compared with 41 years of oil and 65 years of gas at current consumption rates.

How can we persuade power generators not to burn the naughty, carbon-rich but inexpensive fuel? In the absence of an outright ban on coal, there must be a price disincentive that makes virginal windmills, and whizzy atoms look a bit less the Rolls-Royce option. We fall back on emissions trading, but is the rest of Europe in the mood for expensive power? Where is our Government's strategy to persuade the entire world that coal is bad? Moreover, the coal is exactly where we need it most. It is not owned by troublesome sheikhs but by Australians and South Africans. Most of the world's coal is owned by by the biggest consumer; America has 27 per cent of the known coal deposits, some 240 years' worth.

And here is the final rub. China has 13 per cent of the world's coal and India 10 per cent. They scour the world for oil and gas, having little of their own. Both nations have a burgeoning requirement for fuel; India suffers a massive power deficit which will be satisfied, in large part, by burning coal in new power stations. What is to be done? There is emerging technology, still expensive, to extract clean fuels from coal. But, we cannot ask these nations not to burn coal, not to light their homes, not to become affluent, urban consumers like us. Morally, politically, rationally, it is not a sustainable argument.

There was a time when Britain had a useful, instead of a preachy role in the world. It was at the dawn of nuclear power when Calder Hall, the first commercial reactor, was commissioned in 1956. Nuclear engineering has suffered since, banished by ideologues and buried in economic decline. It is affluent, wealthy countries that clean up the environment and develop new energy technologies. There is an easy way to emit less carbon - become poor.

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When the wind stops blowing

A new form of renewable energy has come on stream in the UK: the incandescent environmentalist. Once started, it lasts forever, but tends to generate far more heat than light. In a startling outbreak of long-term thinking, the Government has made clear its belief that nuclear power must be part of Britain's energy mix. Yet to judge by the furious response of environmentalists, you would think Blair had declared Britain must go 100 per cent nuclear. Not at all: the energy review makes clear renewables should also have a role in ensuring diversity of supply.

Environmentalists have always had problems distinguishing fact from fantasy in their attitude to nuclear power. For them, all nuclear reactors are like the one that exploded at Chernobyl, and all of them are underwritten by huge government subsidies.

For those whose world view has failed to move on since the Summer of Love, such beliefs are at least partly excusable. Back then, the Soviet Union did build a number of dodgy Chernobyl-style reactors, and the industry received massive hand-outs. But that was then. Chernobyl-type reactors - built in the face of bitter protests from western experts - have gone the same way as the Soviet Union. Today's nuclear power reactors have an impeccable track record, and are so efficient that the French company EDF says it will build Britain's next generation without the need for subsidy.

Compare that to renewables, which receive an estimated one billion pounds a year in handouts. And when Germany's wind-farms were hit by a six-hour lull in November 2003, the nation suddenly lost the equivalent of three conventional power stations. The eco-warrior view of all things nuclear has not shifted since the publication of When the Wind Blows. But even then it was clear nuclear power keeps going when the wind stops.

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Many people would like to be kind to others so Leftists exploit that with their nonsense about equality. Most people want a clean, green environment so Greenies exploit that by inventing all sorts of far-fetched threats to the environment. But for both, the real motive is to promote themselves as wiser and better than everyone else, truth regardless.

Global warming has taken the place of Communism as an absurdity that "liberals" will defend to the death regardless of the evidence showing its folly. Evidence never has mattered to real Leftists

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