Sunday, June 14, 2009

Naturalism Has Been Hijacked

Man is not a cancer on the planet

Mankind has really been put in its place over the past 500 years. Why only the other day, back in 1400, the sun orbited the earth; man was God's consummate work of art; humans were masters of themselves and the domain God provided for them.

Our secular fall from grace began with Copernicus, who dislodged the world from its celestial catbird seat. Later, Darwin established that man, far from being the animal kingdom's pièce de résistance, was a bit like a baboon in clothes. Then Mendel documented the laws of inheritance -- so much for free will -- and Freud subordinated what was then left of our minds to unseemly drives over which we have little control.

In the 20th century, technology assumed a size and complexity too big to fit into what was left of our brains. In the 1890s, an intelligent layman could achieve a rudimentary grasp of the scope of current scientific thought. Perhaps no one -- scientist or not -- fathoms the full scope of technology today.

According to scientist and futurist Raymond Kurzweil, the coming technological-evolutionary quantum leap, known as the Singularity, will erase the line between human beings and technology. He maintains that technology's exponential progress will result in part-human, part-machine beings with infinitely greater brain power and life-spans approaching immortality.

Mr. Kurzweil envisions the time, if a body part fails, one need only grab its replacement from the pantry and snap it in place. Already, lawyers are busy devising the constitutional framework for a post-human future, in view of the shifting nature of what comprises a human being. The classic paradox comes to mind: Once the knife's blade and handle are each replaced several times, is it still the same knife? Once all your parts have been replaced a few times, are you still you?

Now a segment of the Green movement presents a fresh challenge to mankind's place within nature. Humans, the thinking goes, are one species among the many, a life form coexisting with others, our rights commensurate with those of snail darters, mosquitoes and coral reefs.

The new environmentalist thinking occupies that treacherous terrain between rationality and romanticism. It's highly logical, too, an all-encompassing equation where everything is equivalent to everything else -- communism at a cellular level.

The premise glows with the innocence we forsook when Adam larcenously appropriated an apple from its rightful owner, the tree.

This dangerous new unnatural naturalism sees the planet as a realm of halcyon purity. Conversely, mankind is portrayed as a cancer on the planet. Welcome to secular subhumanism.

The Earth-Firsters are not fools. There are choice elements in their deranged philosophy that merit consideration; such is the essence of temptation. However, their failure is that they undermine their cause with acts of brutality. Theodore Kaczynski, the Unabomber, a Ph.D. with kindred neo-Luddite views, was one such activist run amok, responsible for dozens of injuries and four deaths. He is a case study of how, contaminated with extreme emotion, logic becomes toxic.

Self-described "evo-lutionaries" and animal-rights activists feel justified in spiking trees, burning down housing developments, vandalizing laboratories and threatening the lives of researchers and their families. By all means save the Red-Cockaded Woodpecker, but not at the cost of human lives, no matter how few. That way lies madness.

One activist author posits that the planet can support only one billion people -- a number surely including the writer, his friends and extended family. Another activist advocates saving the world through euthanasia, abortion, suicide and sodomy. However, the truly repugnant part of this story is that these are both tenured professors in wealthy universities.

In Switzerland, proposed legislation protects the rights of plants. As you roam the Swiss mountains, do not violate the rights of the wildflowers by picking them: An undercover gnome might arrest you. Internationally, the greener-than-thou brigade scorns bioengineered seeds -- the 20th century achievement that vastly increased the world's food supply and rescued billions from starvation -- forgetting that nature has been creating hybrids since the beginning of time.

A Yale professor maintains that owning pets is a kind of species colonialism, an exploitative master-subject relationship. The word "pet" is now viewed as pejorative; if you must hold a creature hostage, call it your "animal companion."

The political views of the Eco-elitists defy easy categorization, if not also comprehension. Their anti-business stance might mark them as liberals, while their hard-edged fundamentalist views about nature and brittle nostalgia for a lost Peaceable Kingdom are surely conservative.

Perhaps they are little more than one of nature's newest 21st century hybrids: Progressive-Reactionaries.


Getting Out of Town Ahead of the Weather

Jon Huntsman, the Republican governor of Utah, has had one foot out the door since being named Ambassador to China by President Obama. But he will still be chair of the Western Governors Association when it holds its annual meeting in Salt Lake City this weekend.

Moreover, it looks like his final days in office will be marred by a controversy over just whose tax dollars are being spent on a highly controversial "Western Climate Initiative." Paul Chesser, a global warming skeptic who is a researcher with Climate Strategies Watch, submitted Freedom of Information Act requests and discovered that the initiative -- aimed at supporting dramatic reductions in carbon emissions -- has contracted or partnered with a wide range of liberal climate change groups. A full-time WGA staff member has been detailed to manage the climate project. The subsidies to pay for all this will likely be a topic of discussion at the governors' meeting because a majority of state governors didn't sign on to it. Many of them view draconian reductions in carbon emissions as a serious threat to their states' economies.

One governor I spoke with points out that the WGA is supposed to operate on a consensus basis. He says the WGA's involvement in planning climate change proposals is serious overreach. "The dues states give WGA come from tax money and I was surprised to learn just how much the WGA seems to be getting ahead of many of the states on carbon regulation," he told me.

Governor Huntsman is likely to be long gone when real answers about the WGA's runaway climate program are unearthed. He'll be in China, working at the uphill task of convincing the Chinese to undertake carbon reductions promoted by the Obama Administration. This week, talks between the U.S. and China on such curbs ended with little progress -- Beijing's negotiators making clear they aren't willing to sacrifice economic growth for benefits that are unquantifiable and perhaps illusory.


A report of some of the talks at the International Conference on Climate Change

Rep. James Sensenbrenner (R-WI) had just recently returned from China - where he was the lone Republican in the delegation that was led there by Speaker Pelosi during the Memorial Day break. As has been widely reported, Speaker Pelosi made the visit almost entirely about “climate change” issues, and Rep. Sensenbrenner took advantage of the opportunity to ask a few questions of top Chinese officials.

He point-blank asked the Premier and other high officials if they were going to participate in whatever “process” comes out of the big Copenhagen meeting (the successor to Kyoto) in December; he was told by everyone of whom he asked that question that: No, China would not be signing on to any agreements in Copenhagen - they instead plan to set up their own standards and do things their own way. Whatever “mechanisms” come out of Copenhagen, it is clear that China, India, and many other countries simply will be opting not to participate.

Rep. Sensenbrenner’s main fear vis-a-vis the official United States participation in the Copenhagen discussions is that we will sign agreements merely for the sake of signing.

Given these political realities, Rep. Sensenbrenner has concluded that the cap-and-trade plans now being discussed in Congress will be disastrous - since they amount to unilateral economic disarmament.

Rep. Sensenbrenner is from Wisconsin, and a clear political fault line is emerging in the swirl of all of these “cap-and-trade” discussions. The industrial Midwest is home to a disproportionate share of America’s manufacturing employment, and it relies very heavily for base-energy on coal. This region of the country is in the crosshairs of all the “green” efforts that are emerging from Washington.

David Tuerck of the Beacon Hill Institute made a few macro-economic remarks regarding the cap-and-trade proposals.

He first noted that the notion of “green jobs” involves not ab initio creation of jobs - but rather represents a diversion of jobs from one field to another (at best); we’ll come back to this problem below.

The present incarnation of the Waxman-Markey cap-and-trade proposal uses 2005 carbon dioxide emissions as a base; the goal is to mandate regular decreases from this level over time. The reductions are at first rather modest - with a goal of a 3% reduction (from 2005 levels) by 2012. However, after that, the reductions become increasingly draconian - exceeding an 80% reduction by 2050. Exactly what technologies will allow this to be achieved is something that remains unspoken.

The overall economic consequences of this proposal also remain unspoken. By his analysis, the total world cost of the Waxman-Markey cap-and-trade proposal comes out to something like $20 trillion. He also concludes that these proposals (in reality) amount to an enormous-and-growing de facto carbon tax - and that this tax will amount to $714 per emitted ton of carbon dioxide by 2050.

One of the real highlights of this event (and which I leave as the final section of Part III) was the chance to hear the thoughts of Prof. Gabriel Calzada of King Juan Carlos University in Spain.

Prof. Calzada, you might recall, recently led a study of what went on with Spain’s big “green energy drive” (a model frequently held up to us as one to emulate) over the past decade or so; I mentioned this study a couple weeks back in my big essay “Rhapsody in Green,” and to begin I can simply reprise what I wrote there:

The results have been - to say the least - not only disappointing, but very negative. The salient economic highlights are findings that: 1) For every four “green” jobs created, nine other jobs were destroyed; 2) Among those “green” jobs, only 1 in 10 was a real, full-time job. None of this is a surprise; “alternative energy” requires overly-massive use of scarce resources - resources that can only be taken away from better and more productive activities.

However, in his Washington remarks, Prof. Calzada discussed matters that went far beyond just the economics and failed-outcomes of the Spanish green energy effort. This is a remarkable and frightening story - a story that we ignore at our own peril.

It’s now easy to forget that until the mid-1970s, Spain was a poor and authoritarian backwater corner of Europe; the steady rise of the Spanish economy - under an open political system - has been a very remarkable story.

However, in 2001, a new commitment was made in Spain - based on a desire to allow the steady economic growth to continue, while somehow at the same time something would allow carbon dioxide emissions to reverse their long-term co-traveling trend and decrease. The same reasoning that was bruited there back-then is what we are now hearing domestically - that the efforts required to effect the reduction of carbon dioxide emissions would create unspecified magic new technologies and large numbers of “green jobs” that would boost the economy. It should have been obvious from the get-go that what was really starting was a rationing system - as resources had to be redirected to less-productive activities and rationed into the required/desired slots.

As is always the case with “alternative” energies, the mother’s-milk was a firehose-torrent of government subsidies. In the Spanish case, according to Prof. Calzada, subsidies for wind power battened a cost-to-create gap that amounted to being de facto 90% above the market price - while the subsidies for solar power amounted to being 575% above the market price. To further the use of this “green electricity,” the Spanish government provided both guaranteed minimum pricing, and a requirement that all generated “green electricity” must be purchased by the utility firms for at least the floor price.

One problem with this sort of thing - and one that “policy-makers” remain all-too-oblivious to (or which they just conveniently ignore) is that when you open a sluice-gate, water will flow where it wants to flow (rather than just where you want it to flow). (In a more apt analogy for certain parts of what follows, it was not kept in mind that if you keep a dirty kitchen…. you will be swarmed with roaches.)

With the lush subsidies and the guaranteed minimum prices, providers of “green” energy quickly discovered that they could make returns on their “investments” (sic?) of 12% - 20%. This of course is the sort of year-over-year return that can only be matched by the likes of Bernie Madoff - which should have been a warning sign about the underlying basis of the whole game.

Thus, it was not a surprise that this “return” caused a stampede into the sector, leading to a “green bubble” economy (or, to be more precise, a “renewable energy bubble”).

Beyond the subsidy-driven mania of the artificially-high returns, even more dangerous and sinister things began to happen.

It doesn’t take much business acumen to note that if you have a guaranteed return of 12% - 20% while interest rates are much lower than those levels, someone has set up a perfect type of arbitrage situation for you to exploit. So, not surprisingly, there was a tremendous rush to borrow as much money as possible - since it was guaranteed that one could, as it were, buy low and sell high. Thus, many (if not most) of the newly-minted (pun intended) “green” energy companies became very, very highly leveraged (that’s finance-speak for “they got themselves into a great deal of debt”) because the rules of the game made it a no-brainer - as long as the bubble didn’t burst.

To make matters worse, by Spanish federal law one had to receive a Spanish government license to produce “green” electricity - mainly because a license was required to be allowed into the part of the game in which produced-power had to be purchased by the utilities. This was the keeping of the dirty kitchen that led to (surprise!) an influx of roaches. With the guaranteed easy returns, there was a stampede for licenses - which led to both a long “line” for licenses and a need for a considerable wait for the issuance of those licenses. This quickly led to a “corruption bubble” as various players tried to get themselves jumped-forward in the line (to be able to get into the money-generating game more quickly), and/or to be allowed into the game when the gate-opening was in doubt.

As a final complication, it was obvious that the “green electricity” that was produced by wind and solar projects was (as noted above) much, much more expensive than electricity produced by various plain-old, plain-old methods - and the utilities were obligated to buy all of the “green” electricity produced at a very high mandated floor price. With all of this “green electricity generation” coming from a blizzard of independent “green” power generators, this put the conventional utilities de facto into the role of middlemen - between the generators and the end-customers.

The normal thing to do in this situation would be the standard (and necessary) practice of passing those inflated costs on to the end-customers. However, the Spanish politicians who had been pushing this whole scheme didn’t want end-user electric rates to rise - since this would make the cost of the “green drive” clear to both individual and industrial users, and would likely touch off a revolt against the whole scheme. So the Spanish government issued IOUs to the utilities, promising to pay them the difference between the price that they needed to charge and the price that they were mandated to charge…. 15 years down the road.

So the utilities found themselves eating enormous losses because they were being forced to buy high and sell low…. and all that they had to show for it was an accumulating pile of IOUs from the Spanish government. It was the mid-2000s, so what did you do? Well, you took all those IOUs to some investment bankers and asked them to “securitize the debt” - in other words, convert that debt into debt instruments that could be marketed, so that (rather than sit there on dead-weight debt) you can generate some cash flow off of that debt. Like many (most?) such debt instruments created during that period (e.g., sub-prime mortgages), there was really no viable cash flow into that debt instrument - and these debt instruments became another pile of “toxic assets” that had had assumed-worth but which eventually found their true worth of basically zero.

This was ultimately a train-wreck waiting to happen, but there was one last problem that kept the whole circus going for just a little longer. As noted above, a key structural problem was that nine of every ten jobs in the “green energy sector” were non-permanent jobs; basically, most of the jobs created were directly related to “installation” (of windmills, solar panels, etc.) - and these jobs could only exist as long as there was continuing growth in the primary installation of such items (the jobs would simply disappear when market-saturation and a steady-state were reached).

So rather than try to carefully diffuse the bubble and bring things carefully back down to earth, the Spanish government was more fearful of the concurrent consequences of massive job losses as “installation employment” wound down. This caused a further growth in subsidies in order to keep installation - and the associated jobs - going.

Taken together, this whole story is one of a pyramid scheme that produced a giant bubble - one that took on a life of its own, to the point that no one had the fortitude to try to wind down (what they had themselves created) in a minimally-damaging fashion.

Instead, pushed by its own weight and by the global economic downturn, the Spanish “green energy bubble” has burst - and rather badly. There have been massive job losses in the green energy sector, as all of those “installation” jobs have now vanished. The underlying collateral damage - hidden by the bubble during its good years - has also been quite high; according to Prof. Calzada’s analysis (as noted above), because of the long-term misallocation of resources, for every four “green” jobs (most of them temporary) created, nine other jobs (most of them real and permanent) were either directly destroyed or simply never came into being. The collateral damage caused by the implosion of the “toxic assets” has also been high. And as a final addition of insult to injury, the lack of investment in good, low-cost energy availability has led to an outflow of employment (particularly in manufacturing) from Spain.

As a consequence of this fiasco, today Spain’s unemployment rate sits just a bit below 18%.

Why the “Spanish model” is still held up (in some quarters) as a model escapes me - on both practical and moral grounds.


Obama's Greenie rules obstruct GM revival

The future of GM and Chrysler depend on increasing their production of small cars and hybrids, says the Obama administration — even as sales of small cars and hybrids are in the tank.

Obama has been hawkish on hybrids, pouring money into GM in part to force it to transition to hybrid vehicles. “The plants shut down for a period during the height of the Depression, and major shifts in production have been required to meet the changing times,” he has said. “Tractors became automobiles. Automobiles became artillery shells. SUVs are becoming hybrids as we speak.”

Well, no. GM announced today that it has suspended production of the Chevrolet Malibu hybrid due to poor sales. A glut of 2009 models is sitting on dealer lots. In fact, the Malibu hybrid has been losing sales to its sister four-cylinder gasoline model, which gets similar mpg numbers (22 city/33 highway compared with 26/34 for the hybrid) but is $4,000 cheaper.

Meanwhile, in order to meet government mandates, Fiat-run Chrysler says it plans a profound makeover to adopt the European automaker’s platforms in order to expand its small-car lineup. Plans include production of the Fiat 500 minicar as well as the Alfa Romeo MiTo which have been popular in Italy.

Trouble is, Chrysler will be selling in the U.S. market where small car sales in May dove 39 percent compared to a 27 percent decline in SUV sales. With its vast experience running auto companies, however, Washington apparently sees something that the industry has been missing all these years.


Regulated to Death

Obama’s CAFE standards will prove bad for business and lethal for consumers

May 19 was a perfect day for a White House photo op. The sun was out, the Rose Garden was full, and everyone was smiling, even the CEOs of several automakers — which was ironic, because they were there to sign a suicide pact.

President Obama was unveiling, in his words, a “historic agreement” — a “harbinger of a change in the way business is done in Washington.” The federal government’s fuel-economy standards were being ratcheted up yet again, to 39 mpg for cars and 30 mpg for SUVs and other light trucks by 2016. That is one huge increase over the current standards, 27.5 and 23.1 mpg. And it is just latest turn in a decades-long saga known as Corporate Average Fuel Economy.

CAFE regulations were imposed in the wake of the 1973 oil embargo. They mandated gradual increases in the fuel-economy standards that new cars were required, on balance, to meet (i.e., not every new car had to meet the standards, but an automaker’s fleet had to average out to the stipulated target).

Fuel economy has certainly improved since CAFE’s enactment. The most rapid increase came in the decade after CAFE first took effect in 1978, when fuel economy for new domestic cars rose from 18 mpg to over 27 mpg. But rising gasoline prices also contributed, by stoking consumers’ demand for vehicles that used less gas. A 2002 National Research Council study was unable to determine whether CAFE was the most important force, while Brookings Institution scholar Robert W. Crandall believes that gas-price increases accounted for nearly all of the improvement.

Higher CAFE standards are also touted as a way to reduce our dependence on foreign oil. The relationship may sound logical — use less gas, import less oil — but it’s not borne out by history. CAFE standards rose in the 1980s, but so did our net dependence on foreign oil — from 37 percent in 1980 to 42 percent in 1990. In fact, our overall use of gas increased as well. There is a basic reason CAFE standards may have only a weak impact on oil consumption. Higher fuel efficiency reduces the marginal cost of driving — that is, the more miles per gallon your car gets, the less it costs you to drive each additional mile. So higher fuel economy may actually encourage more driving, and CAFE’s impact on gas consumption may therefore be far weaker than its proponents claim.

But CAFE does have some strong effects — such as increasing new-car prices and restricting the range of models available to the public. CAFE probably contributed to the demise of the full-size station wagon, which had low fuel economy. That, ironically, may have contributed to the rise of the SUV, an even less fuel-efficient model that fell into the less regulated “light truck” category.

And then there is CAFE’s impact on safety. It restricts the production of larger, heavier vehicles, which generally get fewer miles per gallon than smaller, lighter cars. But they’re also more crashworthy: They have more mass with which to absorb collision force, and more space in which occupants can safely decelerate (with the help of seat belts and air bags) before striking the car’s interior. According to the National Research Council study, the 27.5 mpg standard — which was Congress’s target when it initially enacted CAFE — contributed to about 2,000 traffic fatalities per year.

Since the regulations have been on the books for more than three decades, that adds up to a whopping death toll, one that CAFE’s proponents have refused to admit. The agency that runs CAFE, the National Highway Traffic Safety Administration (NHTSA), has run into trouble over this issue. More than two decades ago, my organization, the Competitive Enterprise Institute, began challenging the NHTSA for refusing to factor safety into its deliberations when setting CAFE standards. In 1992, a federal appeals court agreed with us, and found that the agency, whose middle name is literally “Safety,” had used “fudged analysis,” “statistical legerdemain,” and “bureaucratic mumbo-jumbo” to obscure the fact that one of its programs was killing people.

I naively thought this would spell the end of CAFE. After all, if a private manufacturer had produced something that caused a mere fraction of CAFE’s carnage, it would long ago have been forced out of business. But I failed to appreciate just how different the rules of survival are for government projects. Not only did CAFE continue, but its requirements are now more stringent, and more lethal, than ever.

When industry and government shake hands over a product mandate, consumers had better run for the hills. President Obama promised that the costly technologies required under the new standards would rapidly pay for themselves in reduced gasoline costs, but he sounded like a used-car salesman. If these technologies were so great for consumers, then they’d be great for carmakers’ bottom lines. In that case, they wouldn’t need to be mandated by government.

But the auto industry did have one reason to celebrate. It was getting something that regulated industries will kill for: harmonization of regulations. For several years carmakers had faced the possibility that California and other states would impose more stringent fuel-economy standards than those at the federal level, under the guise of reducing carbon-dioxide emissions. California, however, had agreed to hold off temporarily on enacting its own standard, given the increased stringency of the new federal rule. The nightmarish scenario of having to meet different standards for different parts of the country was thus removed, at least for the time being. Instead of multiple nooses around its neck, the industry will have only one.

If you want to see how the industry is learning to live with that noose, consider General Motors’s shifting stance on CAFE. Last June, in comments filed with the NHTSA, it warned that a 35 mpg standard might require the use of “expensive technologies . . . that consumers may not find acceptable — due to price concerns, drivability issues, loss of utility, and noise/vibration acceptance levels.” And that was under the assumption that the 35 mpg standard would be in place by 2020, which would have allowed more breathing room than President Obama’s target of 2016 does.

But in December, when GM filed its restructuring plan with Congress in a bid for bailout funds, those concerns were gone. Instead, GM offered a mea culpa: “GM has made mistakes in the past . . . [including] insufficient investment in smaller, more fuel-efficient vehicles for the U.S.” And at the Rose Garden ceremony, GM declared that it was “fully committed” to the president’s approach. So it is that an industry’s commitment to consumers is being replaced by a commitment to government.

But for the government to achieve what it desires, consumers have to behave in a certain way, and there’s no guarantee they will. Suppose they don’t flock to the new cars — what then? They may well hold on to their old cars longer, which means that our on-the-road fleet could end up having lower fuel economy than if CAFE hadn’t been changed at all. And that scenario will be even more likely if gas prices stay low, because then the public will have even less reason to sacrifice such things as comfort and safety in the name of fuel economy.

So we have a Bizarro World in which the auto industry may root for high gas prices because they make complying with CAFE easier, even though they also make driving more expensive. And government may well try to boost gas prices, given that its auto-bailout funds and regulatory scheme hang in the balance. Simply raising gas taxes would probably be too politically honest; voters would never accept it, and rightfully so. But a complicated cap-and-trade approach, such as that contained in the new Waxman-Markey climate bill, might be politically viable. It would boost gas prices, avoid getting labeled a tax, and be good for the Earth all at once. What could be better?

There was a disturbing but largely unreported prelude to the White House event. A week before the ceremony, Charles A. Hurley, who had been nominated by the president to head the NHTSA, withdrew his name. What reportedly killed his nomination was his work for the Insurance Institute for Highway Safety, which is perhaps the last industry group to recognize the tradeoff between CAFE and vehicle safety publicly.

Making use of decades of auto-crash data, the Institute has long advised consumers on the importance of size and weight in car safety. It drove the point home again last April, by releasing a report on a series of mini-car test crashes in which the vehicles performed significantly worse than mid-size cars.

But well-founded as it was, Charles Hurley’s view on CAFE and safety was too much for environmentalists. They have never admitted the tradeoff in the past, and now they apparently will go gunning for anyone who does. Dan Becker, former head of the Sierra Club’s global-warming program and reportedly a key player in killing Hurley’s nomination, said: “I’d rather talk about the future than . . . kick a dead horse. This gives the Obama administration the opportunity to choose someone who is committed to both sides of NHTSA’s jurisdiction — safety and fuel economy.” So much for the laws of physics.

Hurley’s fate provides an Orwellian contrast to President Obama’s recent claim that “under my administration, the days of science taking a back seat to ideology are over.” Science taking a back seat to ideology? Buckle up, you ain’t seen nothin’ yet.


Nuclear power can be a Cash Cow

One of the biggest raps against nuclear power is that it can’t make money and requires huge subsidies from the federal government.

Tell that to the Tennessee Valley Authority (TVA). Exactly two years ago, the country’s largest public utility restarted Brown’s Ferry Unit 1 — a 1,100-megawatt reactor originally damaged in a 1976 fire that is generally regarded as the nation’s second worst nuclear accident. TVA spent $1.8 billion on the renovation and expected to pay off the construction debt in ten years.

Now it is finding the reactor may pay for itself in three years. Like most other reactors in the country, Brown’s Ferry is now making close to $2 million a day. “Once you get these things up and running, the operating expenses are minimal,” says David Blee, executive director of the U.S. Nuclear Infrastructure Council. “Once you pay off the construction debt, you’re sitting on a cash machine that may keep ringing up profits for another 60 years.”

Reactors have huge startup costs, of that there is no doubt. Current estimates are that plants on the drawing boards may take $8 to $10 billion to complete — more than the net worth of many utilities. But these costs are deceptive. Wind and solar installations actually cost more, since you need dozens of square miles of real estate for wind farms and sprawling solar collectors to get the same output. The advantage of wind and solar is that they don’t have to go through five years of licensing procedures at the Nuclear Regulatory Commission. Utilities and merchant companies must now spend $100 million just to get their applications before the NRC. (All costs of the procedure are born by the applicants.) But once construction is complete, reactors have absorbed 75 percent of their lifetime expenditures. Fuel and operating costs make up only 25 percent of total costs, as opposed to 70 percent for coal and 90 percent for natural gas, the other two sources of base-load power.

Here’s another interesting statistic. Natural gas plants now make up 39 percent of America’s total generating capacity but produce only 20 percent of our electricity. Nuclear, on the other hand, makes up 10 percent of our capacity but generates the same 20 percent. That’s because reactors are up-and-running 90 percent of the time while natural gas plants operate at only 20 percent capacity. The reason? Natural gas is so expensive that plants only run as a last resort.

Yet that last resort will be expanding under Waxman-Markey. One of the overlooked aspects of the Obama Energy Tax’s “renewable portfolio mandate” is that the all-out promotion of wind and solar actually means an all-out commitment to natural gas. Wind and solar generators can quit at any time so they must be paired with natural gas turbines, which are essentially jet engines bolted to the ground. Because they do not boil water, gas turbines can be started and accelerated at a moment’s notice to follow wind-and-solar’s vagaries. Unfortunately, it’s also among the most wasteful and expensive ways to generate electricity, which means prices will be increasing.

So here’s another telling statistic. Spain jumped into renewable energy with both feet in 2004 and has found electrical costs climbing 30 percent in five short years. In the Universidad Rey Juan Carlos study that Chris Horner has discussed frequently in this space, three scholars found that the creation of 47,000 “green jobs” in the wind, solar, and mini-hydroelectric industries had been more than offset by the loss of 110,000 jobs in major energy-consuming industries such as metallurgy, cement, and food processing. Several major manufacturers have relocated new plants in — guess where? — France, to take advantage of cheap nuclear electricity. Acerinox, the world’s second-largest manufacturer of stainless steel, has warned the Spanish government that it too will be disinvesting unless barriers to new nuclear construction are removed.

So get ready for higher electricity prices if the Waxman-Markey’s “renewable portfolio standard” of 17 percent by 2020 makes it through Congress. And get ready to see America’s already gutted manufacturing sector further disemboweled.



For more postings from me, see DISSECTING LEFTISM, TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, POLITICAL CORRECTNESS WATCH, FOOD & HEALTH SKEPTIC, GUN WATCH, SOCIALIZED MEDICINE, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL and EYE ON BRITAIN. My Home Pages are here or here or here. Email me (John Ray) here. For readers in China or for times when is playing up, there is a mirror of this site here.


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