The U.S. Southeast: Renewable Energy Mandates Not (ratepayer blessing; industrial advantage)
Seven Southeastern states have rejected renewable energy mandates and/or voluntary alternative energy quotas on electric companies: Louisiana, Alabama, Arkansas, Georgia, Kentucky, Mississippi, South Carolina and Tennessee. (North Carolina is another story, requiring a 10% share for renewables and mandated efficiency savings by 2018.)
The good news for the seven states is not only that unnecessary costs have been avoided during the political boom of ‘green’ energy. The benefit is also that artificial bubble jobs are not on a death watch as they are in other states that now face ‘green’-energy retrenchment.
William Yeatman, an energy policy analyst for the Competitive Enterprise Institute, contends that Southeastern states do not have as much renewable energy potential as the rest of the country. “The Southeast has the lowest wind energy potential of all regions, and wind is the energy source that is used to achieve virtually all renewable electricity mandates in the U.S.”
However, Yeatman says that even though the Southeast has limited renewable energy potential, that does not mean renewable energy mandates are a good idea in the Northwest, Northeast or the Southwest. Rather, “It is to say that renewable energy is even more uneconomical in the southeast than in the rest of the country.”
Louisiana’s Politically Clean Energy
This competitive advantage is evident in the prices residents in Louisiana and other Southeastern states pay for energy. The Southeast has some of the lowest electricity bills in the country, thus making politicians skeptical of imposing government mandates, which would raise costs for power companies and raise prices for consumers.
Walter Block, economics professor at Loyola University, claims that customers should have a choice between traditional and renewable energy sources. “Nuclear, coal, oil and gas are far cheaper than wind, water, solar and geothermal,” he said.. “The only reason the latter are used at all is because of heavy subsidies, and taxes on the former.”
In 2009, Louisiana ranked 30th in the country for renewable energy by generating only 4 percent of their energy from renewable sources, mainly from wood waste and hydro conventional plants.
However, the U.S. Department of Energy recently awarded Louisiana State University $997,000 for a project to evaluate the feasibility of an advanced geothermal energy project in the Pelican state. A million dollars here, a million there; such money biases the market away from the energies that consumers naturally choose and companies naturally research.
One can only hope that such grants will cease as energy’s contribution to a balanced federal budget.
Robert Ross is a journalist and researcher with the Pelican Institute in New Orleans, Louisiana. A native of Cleveland, Ohio, Mr. Ross graduated from Loyola University in New Orleans with Bachelors of Business Administration degrees in economics from the Joseph A. Butt College of Business.