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Posts from — December 2010

HAPPY NEW YEAR! (From your friends at MasterResource, the free market energy blog)

It has been a good two years at MasterResource!

So here’s to our loyal readers (712,000 views and counting) from us (70 souls and counting) for a happy, prosperous, peace, and free enterprise 2011!



  • Roger Donway


  • Jon Boone
  • Indur Goklany
  • Ben Lieberman
  • Robert Michaels
  • Glenn Schleede
  • Vaclav Smil
  • Tom Tanton


  • Gerry Angevine
  • J. Scott Armstrong
  • Daren Bakst
  • Patrick Barron
  • Charles Battig
  • David Bergeron [

December 31, 2010   3 Comments

John Holdren’s Big Science, One Science Directive (so what has this smartest-guy-in-the-room said in the past?)

“Some form of ecocatastrophe, if not thermonuclear war, seems almost certain to overtake us before the end of the century.”

-  John Holdren and Paul Ehrlich, “What We Must Do, and the Cost of Failure,” in Holdren and Ehrlich, Global Ecology (1971), p. 279.

“As University of California physicist John Holdren has said, it is possible that carbon-dioxide climate-induced famines could kill as many as a billion people before the year 2020.”

-  Paul Ehrlich, The Machinery of Nature (1986), p. 274

“We have been warned by our more cautious colleagues that those who discuss threats of sociological and ecological disaster run the risk of being ‘discredited’ if those threats fail to materialize on schedule.”

- John Holdren and Paul Ehrlich, eds., Global Ecology (1971), p. 6.

“John Holdren (like Paul Ehrlich) has done much to discredit himself by both his failed forecasts and his angry response to his critics…. [But] will Dr. Holdren embrace a challenge culture and make midcourse corrections? Will he temper his temper toward those of us who really care about better, longer living for a growing population, as well as political and economic freedom?”

- Robert Bradley, “John Holdren in Retrospect (Part VIII on Obama’s New Science Advisor)” (February 2, 2009)

John P. Holdren, Assistant to the President for Science and Technology and Director of the Office of Science and Technology Policy, has flexed his muscles with a recent directive (see below) to federal employees. Science in the service of public policy is objective, and current science is settled science, even in a wide-open area like climate change.

Neo-Mathusians rejoice–the ten commandments have come from on high!

Well, if Dr. Holdren is making sound science the law for the  Washington, D.C., bureaucracy, can he kindly revisit his past predictions and let us know which ones he would not subject to the God of peer review or present before esteemed professional societies? [Read more →]

December 30, 2010   6 Comments

Virginia Renewables: Taxpayer Santa

Bridging the gap between the insightful analyses at MasterResource and what emanates from the halls of government remains a challenge. No matter how clear the issue might be to those who follow this and similar logic-based web sites, the formulation of public policy seems to rely on overt political calculation and tailored science in the service of a political objective.

Free market logic needs to reach beyond our own “choir of believers.” And this means improving our penetration with the general media, a challenge indeed.

In Hoodwinking the Nation, Julian Simon noted that even after he had so convincingly debunked the “vanishing farm land” scam, and the U.S. Department of Agriculture reversed its original position, the press largely ignored the correction. Simon ruefully noted “false bad news” sells.

In the case of the official position of Virginia, as documented in the 2010 Virginia Energy Plan, one sees the 2007 plan scripted under a Democratic Governor carried forward under a proclaimed conservative Republican governorship. The tax carve outs for renewable energy interests continue under the guise of the “all of the above” energy sourcing mantra of Governor McDonnell.

Special interests find favor no matter the administration. The 2007 “Virginia Re-regulation” of utilities legislation illustrates the success of the regulated to shape legislation on their terms. Now the same core of Virginia utility producers have been given “enhanced rates of return” in the renewables market, and other taxpayer funded incentives. Wind farms are promoted as job building enterprises.

The VA Scientists and Engineers for Energy and Environment (VA-SEEE) has sought to have the Commonwealth identify the source of their science data, if any, used to formulate public policy. The vast majority of ranking state officials are lawyers by training.

My letter published in the Richmond Times Dispatch, on Christmas Day, is an attempt to educate the public, and call the Commonwealth to task on the use ( or misuse) of taxpayer funds to the benefit of corporate interests. It is perhaps a quixotic effort confined to the publication limit of 350 words or so. However, as the Tea Party movement has demonstrated, it is only by direct public involvement and engagement that the political class will take notice, no matter what the topic, be it energy, climate, or health care. [Read more →]

December 29, 2010   2 Comments

Regs for Rigs: Update, EPA’s Diesel Truck Fuel Economy Standards

In two recent posts (here and here), I examined EPA’s and the National Highway Traffic Safety Administration’s (NHTSA’s) rationale for establishing first-ever fuel-economy standards for trucks. Today’s post provides additional evidence that what the agencies call the trucking industry’s “under-investment” in fuel-saving technology is an unintended (although not unforseen) consequence of EPA’s ever-tightening diesel-engine emission standards. The declining fuel economy of 18-wheelers is a case of government failure, not market failure. Conveniently, EPA’s role in holding back heavy-truck fuel economy is never discussed in the agencies’ proposed rule.

The trucking industry is highly competitive, profit-margins are thin, and fuel is the single biggest operating expense. Consequently, truckers, especially those who haul freight long distances in “combination tractors” (semis), have a strong incentive to purchase vehicles incorporating cost-effective improvements in fuel economy. Hence manufacturers also have a strong incentive to produce such vehicles. Yet the average fuel economy of semis declined by 1.2% annually over the past decade, according to the Department of Energy’s Transportation Energy Data Book (p. 5-2).

How can this be? [

December 28, 2010   6 Comments

MasterResource Turns Two

Two years ago yesterday, MasterResource was launched by a group of free-market energy scholars.

Our concept was different from most blogs. With one in-depth blog per day, the idea was to create an open book of small mini-chapters, creating a scholarly resource and a historical record for the energy and energy/environmental debates. We now have 275 categories–the index of our ever expanding book.

Our total views have surpassed 700,000. Our rank at Technorati is #25 out of 6,369 “green blogs” (as of 12/26/10). We have a loyal, sophisticated readership. The comments add meat to the posts.

Most of all, our content will most assuredly meet the test of time as future scholars review MasterResource to understand the intellectual arguments and political discourse.

Here is the opening blog from December 26, 2008: [Read more →]

December 27, 2010   1 Comment

Three Cheers for Holiday Lighting! (“let it glow, let it glow, let it glow”)

Left environmentalists critical of electrified America must have mixed emotions this time of the year. It may be the season of good cheer and goodwill toward all, but it is also the time of the most conspicuous of energy consumption. America the Beautiful is at her best come December when billions of stringed light bulbs on buildings and trees turn the mundane or darkness itself into magnificent beauty and celebration.

Holiday lighting is a great social offering—a positive externality in the jargon of economics—given by many to all. it makes one wish for more lighting all months of the year in urban centers–for ease of movement, for safety, for better moods. “Here Comes the Sun,” a favorite of so many, could be joined by “Here Comes the Light.”

While energy doomsayers such as Paul Ehrlich have riled against “garish commercial Christmas displays,” today’s headline grabbers (Grist, Climate Progress, where are you?) have not engaged a public debate over the issue. Yet holiday lighting is a glaring exception to their goal of reducing discretionary energy usage to help save the world. If holiday energy guzzling is forgiven, why not excuse outdoor heating and cooling, one-switch centralized lighting, and instant-on appliances that “leak” electricity, not to mention SUVs?

Prancing around to turn on individual lights or waiting for the paper copier to warm up waste the scarcest and one truly depleting resource: a person’s time. Surely extra energy use for comfort and convenience has priority over purely celebratory uses of energy.

What about the holiday humbug that celebratory electricity depletes future fossil-fuel supplies, fouls the air, and destabilizes the climate? Good tidings abound! [Read more →]

December 24, 2010   14 Comments

Energy at the Speed of Thought (Part 4: Free-Market Alternatives in Illumination and Transportation Energy)

[Editors note: This is the final installment of Alex Epstein's four-part exploration of innovation and creative destruction of the early oil market. Read Part 3 here. References are at the bottom. This post was originally published in The Objective Standard.]

John D. Rockefeller’s improvements, which can be enumerated almost indefinitely, helped lower the prevailing per-gallon price of kerosene from 58 cents in 1865, to 26 cents in 1870—a price at which most of his competitors could not afford to stay in business—to 8 cents in 1880. These incredible prices represented the continuous breakthroughs that the Rockefeller-led industry was making. Every five years marked another period of dramatic progress—whether through long-distance pipelines that eased distribution or through advances in refining that made use of vast deposits of previously unrefinable oil. Oil’s potential was so staggering that no alternative was necessary. But then someone conceived of one: the electric lightbulb.

Actually, many men had conceived of electric lightbulbs in one form or another; but Thomas Edison, beginning in the late 1870s, was the first to successfully develop one that was practical and potentially profitable. Edison’s lightbulb lasted hundreds of hours, and was conceived as part of a practical distribution network—the Edison system, the first electrical utility and distribution grid. As wonderful as kerosene was, it generated heat and soot and odor and smoke and had the potential to explode; lightbulbs did not. Thus, as soon as Edison’s lightbulb was announced, the stock prices of publicly traded oil refiners plummeted. [Read more →]

December 23, 2010   7 Comments

Energy at the Speed of Thought (Part 3: How Oil Rose to Prominence)

[Editors note: This is part 3 of 4 in Alex Epstein's exploration of innovation and creative destruction of the early oil market. Read Part 2 here. References are at the bottom. This post was originally published in The Objective Standard.]

George Bissell was the last person anyone would have bet on to change the course of industrial history. Yet this young lawyer and modest entrepreneur began to do just that in 1854 when he traveled to his alma mater, Dartmouth College, in search of investors for a venture in pavement and railway materials. 26 While visiting a friend, he noticed a bottle of Seneca Oil—petroleum—which at that time was sold as medicine. People had known of petroleum for thousands of years, but thought it existed only in small quantities. This particular bottle came from an oil spring on the land of physician Dr. Francis Beattie Brewer in Titusville, Pennsylvania, which was lumber country.

At some point during or soon after the encounter, Bissell became obsessed with petroleum, and thought that he could make a great business selling it as an illuminant if, first, it could be refined to produce a high quality illuminant, and, second, it existed in substantial quantities. Few had considered the first possibility, and most would have thought the second out of the question. The small oil springs or seeps men had observed throughout history were thought to be the mere “drippings” of coal, necessarily tiny in quantity relative to their source.

But Bissell needed no one’s approval or agreement—except that of the handful of initial investors he would need to persuade to finance his idea. The most important of these was Brewer, who sold him one hundred acres of property in exchange for $5,000 in stock in Bissell’s newly formed Pennsylvania Rock Oil Company of New York. [Read more →]

December 22, 2010   3 Comments

Energy at the Speed of Thought (Part 2: Individual Planning in the Pre-Petroleum Illumination Market)

[Editors note: This is part 2 of 4 in Alex Epstein's exploration of innovation and creative destruction of the early oil market. Read Part 1 here. References are at the bottom. This post was originally published in The Objective Standard.]

Today, we know oil primarily as a source of energy for transportation. But oil first rose to prominence as a form of energy for a different purpose: illumination.

For millennia, men had limited success overcoming the darkness of the night with man-made light. As a result, the day span for most was limited to the number of hours during which the sun shone—often fewer than ten in the winter. Even as late as the early 1800s, the quality and availability of artificial light was little better than it had been in Greek and Roman times—which is to say that men could choose between various grades of expensive lamp oils or candles made from animal fats. 16 But all of this began to change in the 1820s. Americans found that lighting their homes was becoming increasingly affordable—so much so that by the mid-1860s, even poor, rural Americans could afford to brighten their homes, and therefore their lives, at night, adding hours of life to their every day. 17

What made the difference? Individual freedom, which liberated individual ingenuity.

The Enlightenment and its apex, the founding of the United States of America, marked the establishment of an unprecedented form of government, one established explicitly on the principle of individual rights. According to this principle, each individual has a right to live his own life solely according to the guidance of his own mind—including the crucial right to earn, acquire, use, and dispose of the physical property, the wealth, on which his survival depends. [Read more →]

December 21, 2010   1 Comment

Energy at the Speed of Thought (Part I: The Original Alternative Energy Market)

[Editors note: This four-part post examines the innovation and creative destruction of the early oil market. It was originally published by The Objective Standard.]

The most important and most overlooked energy issue today is the growing statist threat to global energy supply.

There is no substitute for available, affordable, and reliable supply. Cheap, industrial-scale energy is essential to building, transporting, and operating everything we use, from refrigerators to Internet server farms to hospitals. It is desperately needed in the undeveloped world, where 1.6 billion people lack electricity, which contributes to untold suffering and death. And it is needed in ever-greater, more-affordable quantities in the industrialized world: Energy usage and standard of living are directly correlated.1

Every dollar added to the cost of energy is a dollar added to the cost of life. And if something does not change soon in the energy markets, the cost of life will become a lot higher. As demand increases in the newly industrializing world, led by China and India, 2 supply stagnates 3—meaning rising prices as far as the eye can see.

What is the solution?

We just need the right government “energy plan,” leading politicians, intellectuals, and businessmen tell us. Of course “planners” such as Barack Obama, John McCain, Al Gore, Thomas L. Friedman, T. Boone Pickens, and countless others favor different plans with different permutations and combinations of their favorite energy sources (solar, wind, biomass, ethanol, geothermal, occasionally nuclear and natural gas) and distribution networks (from decentralized home solar generators to a national centralized so-called smart grid). But each agrees that there must be a plan—that the government must lead the energy industry using its power to subsidize, mandate, inhibit, and prohibit. And each claims that his plan will lead to technological breakthroughs, more plentiful energy, and therefore a higher standard of living. [Read more →]

December 20, 2010   14 Comments