Thursday, May 30, 2013

Energy Speech by Lamar Alexander

Yesterday our local senator,  Lamar Alexander, gave a speech in Oak Ridge on America's energy future that I think came close to hitting the nail on the head. The full speech can be found here.

Having lived in Germany I  appreciate his assessment of the German energy mess. Germany adopted cap-and-trade,  started closing its nuclear power plants and became more dependent upon natural gas, buying both forms of energy from other countries rather than producing it on its own. The Germans are subsidizing wind and solar, but are building new coal plants in order to have enough reliable electricity. The end result is that Germany is a major carbon producer and also has the second-highest household electricity prices in the European Union.

More generally, Alexander's "four principles" are:

1. Cheaper, not more expensive, energy.
2. Clean, not just renewable, energy.
3. Research and development, not government mandates.
4. Free market, not government picking "winners and losers"

The only quibble with these I might have is over the "government mandates".
I can't see global CO2 control ever happening without there eventually being some kind of global treaty that all nations have to abide by, and that, of course, is a massive multi-government mandate.

But maybe I'm wrong? Conceivably CO2 reduction could happen naturally by voluntary application of principle 2? But by itself principle 2 contains no business incentive. More likely, if the R&D spending in principle 3  is biased towards clean energy, then this will naturally become cheaper and create business incentive.  Alexander recommends doubling the federal R&D outlay on energy research. Creating the necessary clean technology will lead to its widespread use.

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