Green Jobs: The Last Redoubt (invoking military images of us-versus-them)
Over the past few weeks, with more dents accumulating in the armor of warmism, a new battle line is taking shape: ” The U.S. economy is ill, energy is important, green jobs will save us, promote green jobs, give us your money.” Or something like that.
In fact, the shock troops of the green job army are now promoting the phrase “global weirding” to replacing global warming. There is also terminological retreat on the green jobs side. You see green tech is not actually going to do much positive for the economy, you should think of it rather as a form of “insurance,” against global weirding, I suppose.
As we limp into our second year of crony capitalism under Barack Obama, with small businesses loath to risk their funds in what is increasingly a rigged crapshoot, and the importance of having friends in Washington all the more vital, government-backed green jobs appear to many as the only way out.
Indeed, as the skirmish lines have formed up the green jobs proponents have tried to imbue the subject with the same kind of political insulation that AGW theory previously enjoyed. Criticizing money spent on green jobs is tantamount to rooting for America to fail. Don’t believe me, here’s Tom Friedman of the New York Times, chief cheerleader for government-backed (coerced?) green technology promotion quoting Joe Romm approvingly: “China is going to eat our lunch and take our jobs on clean energy — an industry that we largely invented — and they are going to do it with a managed economy we don’t have and don’t want,” And then there’s Tom Friedman’s approach to international economic competition: “Mr. Wen, I just have one thing to say to you: We are going all in on clean tech. I’m going home and I’m going to get through the U.S. Senate a cap-and-trade bill, a carbon price, a carbon tax, whatever it is that will trigger massive scale investment in clean tech in America. And please take this message back to China: We will bury you. We are going to bury you in clean tech.”
This will be the first trade war in history over insurance.
All this bluster about trade wars, burying the opposition in wind turbine blades and biogas feedstocks, only works if you don’t really mean it. What would be really great is to convince your rivals to overpay for energy – by a lot. The EU has already volunteered to do this and is watching its future slowly sink into a sea of red ink created by renewable energy subsidies and excessive taxes on electricity and fuels to pay the subsidies (okay, welfare state benefits hurt, too, a lot). Spain’s annual subsidy bill for renewable energy is now about $38 billion—more than twice what the U.S. federal government spends—to subsidize energy for an economy just one-ninth the size of the US. Apparently, the Chinese are laughing at us – at our failure to bet the ranch on green tech, at our desire to continue to be slaves to OPEC, at our lousy coffee and bland croissants (oh right, those are the French, not the Chinese), at our failure to convert to the metric system, there must be other failures as well – but above all at our unwillingness to embrace the future that will be wrought by wind and solar. I will leave fast trains out of this discussion, though they always seem to be a big part of things when talk turns to “stupid American tricks.”
To be willing to do so much damage to the nation’s economy those pushing green tech and green jobs must be in love with the machine, not what it does.
A Little Thought Math Experiment
The idea of all those Chinese, Russians, Venezuelans and Arabs laughing at the USA has disturbed us here at Master Resource so much that we have taken refuge in numbers. Yes, we do believe in green tech, we believe in what it can do for the US economy. But we need numbers. We have chosen a number at random: $287.4 billion dollars.
What can you do with $287.4 billion? Well, in green tech you can construct about 136.9 GW of wind generation. At an average plant factor of 25% this will yield about 299.7 billion kWh per year.
Is There Any Other Way to Generate 300 billion kWh/year in the USA?
Actually, there is. If you took 2 trillion ft3/year of gas from shale deposits, put that gas into 45.6 GW of CCGT units operating at 75% plant factors, then voilà, your 299.7 billion kWh would appear. To produce 2 trillion ft3 of gas from shale annually you need about $85 billion (present value) in fixed investment and production costs over 20 years. You also need to build the CCGT plants, for say, $38.8 billion.
So the “bad” future, the one that produces reliable and clean electricity from natural gas (domestic US gas, no laughing Russians I bet), will cost about $123.4 billion, or 43% what the windy future costs. And the terrible thing about it, from the green point of view, is that not one cent (well, about $0.00025 per kWh) comes from taxpayers. Willing investors and customers will be all that is needed to support the investments and production. What are we going to do with the $164 billion that’s left over?
Actually, there are a lot of things we can do with $164 billion, but it’s not really the government’s business if we stop fooling around with subsidies for wind and solar (subsidized at a rate of about $0.024/kWh in the US). People can invest in new plants, skills training, technology research. In short, we can invest in figuring out new and better ways to use that energy we have so efficiently generated from gas. While energy is the master resource, it is not the purpose of the economy. We love energy for what it does, not what it is. The greenies love the machines more than they love the economy. That’s why they are willing to destroy the economy in order to build the machines.
Back to the Military Analogies
So the next time the Obama Administration throws up some chaff to shoot down shale gas production or other private investments in new energy sources you will know why. You have to try to take out the general staff of the bad guys (shale gas, clean combustion technology, oil refining, advanced fuel cycles) if your foot soldiers (wind, solar, high speed trains) are not up to the job. Cap and Trade was supposed to accomplish this mission, but failed. Now it is left to the rear echelons (fondly known as REMFs), the scribblers, as well as the reserve forces at EPA to step up.
 One of the great competitive battles in recent (ancient?) business history was the bidding war over National Airlines between Texas Air and Pan Am. Texas Air had no desire to buy National, but they wanted Pan Am to overpay, hence the bidding war. Pan Am never recovered from its “victory” in this bidding war.