Arnold Kling  

New Energy Legislation

Trade Deficit, Saving, and Tax... Drug Price Controls...

Lynne Kiesling, who believes that rent-seekers should be prosecuted, is in an accusatory frame of mind concerning the latest energy legislation. She writes,

choosing to expand ethanol mandates as a renewable energy initiative is a big mistake. Using more ethanol will increase our dependence on foreign oil and impose costs that far outweigh its benefits. Overall, the proposed ethanol mandates will cost Americans $18-23 billion more than they will benefit.

Jerry Taylor and Peter Van Doren describe the legislation as "Hundreds of pages of corporate welfare, symbolic gestures, empty promises, and pork-barrel projects."

For Discussion. What real solutions to real problems are contained in the legislation?

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COMMENTS (11 to date)
Lynne Kiesling writes:

HEY!!! I never said that! I just threw it up there for folks to chew on ...

[if you were baiting me it worked]

Lynne Kiesling writes:

Seriously ... the best thing that this energy bill does is repeal of PUHCA, the Public Utility Holding Company Act of 1935. One of the first posts I ever did was on the value of PUHCA repeal:

and more recently,

Taylor and VanDoren similarly conclude that PUHCA repeal is a good thing.

But 1200 pages, for that?

Eric Krieg writes:

Nukular. If the bill does anything to jumpstart the nuclear industry in America, it will have done a great service.

Patrick R. Sullivan writes:

In the "Prejudices" series, H.L. Mencken has an essay arguing that the laws against assault should be changed. He said anyone should be able to clobber anyone else (especially judges and congressmen), but would later have to defend his actions in court. If the assailant could convince the jury the assailee had it coming, then he would walk.

Maybe that would work to allow us to inflict punishment on rent-seekers and their enablers.

Bob Dobalina writes:

Eric and Lynne,

The nuclear thing really grabs my attention. If we are going to continue to consume terawatts of power, what energy source other than nuclear power can we employ in sufficient quantities? And is nuclear power more or less salable to the public now that we want to "reduce our dependence" on foreign oil?

And when fuel cells become truly practical, will the argument for nuclear become stronger?

Last, are there any domestic companies which stand to profit greatly from a wider-scale rollout of nuclear power?

Lawrance George Lux writes:

Real Solutions? --Absolutely none.

Research funds will be distributed to political supporters of Bush, who will utilize nothing but high-tech solutions; this because no one expects them to work, avoiding reaction from the Oil industry, and because the Research can be overloaded with high-priced billing at huge Profit.

The Tax credits for the Energy companies will allow them to contract actual supply, raise Prices, and maintain Profits. There is no true Cost-effective construction of a Pipeline from Alaska, unless they open up all Alaska to drilling. It is simply too long and costly otherwise. It will not be capitalized until there are Oil fields in the Wildlife refuges.

Ethanol mandates are seriously stupid, as such a program would have been funded by the Oil industry, if it were Cost-effective. It simply get rid of Agricultural excess at high profit, because of the mandates.

A Labor-intensive system of Wind power generating stations would be of use, but enjoys little funding. Eric previously posted a need to restart the nuclear power industry, which this bill does not do effectively.

The only real value of this Bill comes in the form of expressing Business management do poorly is regulating social utility necessities. Repeal of PUHCA probably was a step backwards, as it grants Energy utilities independence, when Business invariably foregoes long-term advantage for interim Profits. lgl

Boonton writes:

If energy independence is the goal then the only rational economic policy would be to tax energy imports. This is economically inefficient because free trade almost always generates better results than a closed economy. However if importing energy creates 'externalities' such as a threat to national security then the cost of 'energy protectionism' may be offset by gains in security.

Bernard Yomtov writes:

This legislation is abonimable. As a Democrat I am deeply disappointed that some Democratic Senators have already indicated their support, and am hoping that Daschle summons up the courage to take a stand against it.

I think this is a real test of the integrity of EVERY senator on both sides of the aisle. So in a way, there's my answer to Arnold's question.

Bob Dobalina writes:

"A Labor-intensive system of Wind power generating stations would be of use, but enjoys little funding."

Den Beste shows wind to be of very little use:
"If any proposed energy source can't be scaled up to generate 10 gigawatts average (1% of (US demand)), it won't be large enough to make any significant difference in the grand scheme of things even ...The Irish windmill project will, once completed, utilize every reasonable site in Ireland and will generate 500 megawatts when the wind is blowing. For us to be interested within the context of this discussion, an American windmill effort would need to be at least 20 times larger, and that's unlikely.

Arnold Kling writes:

Bob D wrote "And when fuel cells become truly practical, will the argument for nuclear become stronger?"

Absolutely. The founder of General Hydrogen made exactly that point at the Pop!tech conference in Maine. I think this shocked many of the attendees, because hydrogen is so politically correct and nuclear is so politically incorrect. They could not handle the cognitive dissonance.

Eric Krieg writes:

You need energy to generate hydrogen, because there aren't any hydrogen mines or wells, on Earth anyway.

So unless you get the energy to create the hydrogen from a source that does not produce CO2, you haven't done ANYTHING to address the shortcomings of hydrocarbon based energy sources.

Nuclear power can do this. The waste heat alone from nuclear power is sufficient to be used to strip hydrogen from oil, without generating any CO2 (petrochemical plants produce a lot of hydrogen now, which they use internally to de-sulfurize gasoline. No new technology is needed, just to combine nuclear power and oil refining.)

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