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AOTA (‘All of the Above’) Energy Policy: A Political Argument for the Uneconomic, Cronyism

“The future belongs to the efficient. The future belongs to the best, not the bottom feeders of  ‘all of the above’. Let consumers decide, and keep taxpayers out of it.”

“Parents, would you favor your son or daughter dating ‘all of the above’?” This is the question I pose in my talks to the argument for wind power proffered by the renewable-energy advocates and the Obama Administration.

More recently, I have come up with a simple word slide to delve a little more deeply into the AOTA argument for a major presentation I have coming up. First, some background.

University of Houston Debate

I am preparing for a debate next Tuesday night at the University of Houston considering the topic:

Renewable Energy: Need for Government Support?” 2013/2014 Energy Symposium Series, Critical Issues in Energy, University of Houston (Houston, Texas). Sponsored by UH Energy and the UH College of Natural Sciences and Mathematics. [1]

I will have two opponents.  Congressman Gene Green (D-TX) supports extending the Production Tax Credit (PTC) and has a long history of voting for special government favors for (qualifying) renewable energy. Rep. Green also supported the failed American Clean Energy and Security Act of 2009 (Waxman-Markey cap-and-trade bill).

My other adversary is industrialist Jimmy Glotfelty, cofounder and EVP of Clean Line Energy, a company specializing in renewable power transmission and related wind-farm development.  Mr. Glotfelty is also a board member of AWEA.

Several hundred students in the burgeoning University of Houston energy program will attend. This is a good opportunity for energy realism, and a nice add-on for me given my ‘upset victory’ at the Economist magazine debate of several years ago that went very well.

This debate is very timely given the tax reform proposal released this week by Dave Camp, House Ways and Means Chairman, reviewed yesterday at MasterResource by Lisa Linowes.

Event Description: ‘The Times are A-Changin’

Here is the event description by the University of Houston energy brass, very fair, I might add (the times, they are a-changin!).

Renewable energy’s role in the nation’s future remains unclear, partly because whether to provide government subsidies is still an unsettled question.

Subsidies have helped drive the growth of renewable energy, but they have become more controversial as concern over the federal budget continues to rise.

”As the demand for energy grows worldwide, many people have called for an ‘all of the above’ energy policy, including the use of renewable energy,” said Ramanan Krishnamoorti, chief energy officer at UH. “But people remain split about whether government subsidies are appropriate or necessary for renewable energy to reach a sustainable level.  This debate should clarify the arguments on each side and offer some perspective on what is at stake as the nation’s energy policy continues to evolve.”

Government subsidies are not the only issue people consider when gauging the viability of renewable energy, said Dan Wells, interim dean of the UH College of Natural Sciences and Mathematics.

“But it is a key issue raised both by those who see renewables as a potential mainstream source of future energy and those who believe that wind, solar and other forms of renewable energy are unlikely ever to play a major role in filling the world’s energy needs,” he said. [2]

AOTA Reconsidered

The favorite pitch of the wind and solar industry for continuing the subsidies (PTC, etc.) is the “all of the above” (AOTA) argument. Here is my new slide and a bit of commentary.

* Tension with economic principle of ‘scarce means to unlimited ends’

First bullet: to be economical is to be wise, using no more resources than necessary for a given end. Wind power is radically uneconomic and energy inefficient because it is dilute and, being intermittent, at odds with the basic requirements of electricity. Economics means choosing among alternative means to meet unlimited ends. Wind loses!

* Central planners dream: ‘open sesame’ for government waste

Wind power as a market-rejected, government-dependent energy source is a government planner’s dream. No invisible hand here! My conscious plan, my visible hand, both of them, will transform the energy market.

* Cronyism!

Speaks for itself. The more the government mandates and subsidies, the more cronyism and demand for more subsidies there will be. “All of the above” becomes more and more of the worst getting on top, a bottom-up free-for-all.

* Waste in all directions since no market-price —or ‘correct’ price— driven from priced-carbon perspective)

Aren’t environmentalists supposed to be big on efficiency and down on the opposite? Fossil fuel plants are highly concentrated and high-capacity producers. They do not sleep. No excuses from stillness or cloudiness. They rock electricity, in hipster terms.

Conclusion

The future belongs to the efficient. The future belongs to the best, not the bottom feeders of “all of the above.” Let consumers decide, and keep taxpayers out of it.

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[1] Tuesday night  March 4, 2014. The debate will begin at 6:30 p.m. at the Hilton University of Houston Waldorf-Astoria Ballroom. The talk, also sponsored by the Houston Business Journal and Houston Public Media, is free and open to the public. 

[2] Another event at the University of Houston was not a debate but a presentation in favor of a carbon tax by former U.S. Representative Bob Inglis. It was described as follows, somewhat disingenuously, by UH law professor Tracy Hester:

“Bob Inglis, at great personal cost, took a strong public stand in favor of revenue-neutral carbon taxation when it was politically unpopular to even say the words ‘tax’ or ‘climate change’. While the national discussion about climate change remains mired in partisanship, his proposal offers an interesting example of a conservative and free enterprise approach to reduce greenhouse gas emissions.”

1 comment

1 AOTA (‘All of the Above’) Energy Policy: A Political Argument for the Uneconomic, Cronyism » coalitionoffreedom.com { 02.28.14 at 1:01 am }

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