Ed. Note: Four years ago, Storm Uri caused Texas’s centrally planned wholesale electricity market (ERCOT) to buckle, vindicating warnings about the state’s wind/solar reliance. The mainstream media implicated natural gas instead, failing to explore the why behind the why. Rather than deregulation, Texas has chosen to add wind, solar, and batteries, while subsidizing natural gas plants to counter intermittency. This duplicated grid is now driving rates up in a state that could have relied on surplus natural gas instead.

It was not so much the story of freak weather triggering a market failure writ large. It was a classic application of the political economy of government intervention: the seen and the unseen, expert/regulatory failure, and unintended consequences.

Don Lavoie, a preeminent thinker in the field of market-versus-government planning, once warned:

If the guiding agency is less knowledgeable than the system it is trying to guide—and even worse, if its actions necessarily result in further undesired consequences in the working of that system—then what is going on is not planning at all but, rather, blind interference by some agents with the plans of others.”

“The Kiesling/Giberson (et al.) narrative is a call for more government. MORE wind. MORE solar. MORE Batteries. MORE central planning to correct prior. And rationing from ‘smart meters’ to forgive all that came before. Think Big Brother, the Electricity Road to Serfdom.”

Three years ago this month, a prolonged, extensive cold snap did the unthinkable to Texas’s huge electricity grid. The shared narrative from proponents/apologists of forced energy transformation (‘Energy Transition’, ‘Decarbonization’, ‘Net Zero’, ‘Green New Deal’, ‘Virtual Power Plant’) focused on the failure of natural gas infrastructure as the cause of the debacle, a sort of “market failure” from “an Act of God.” The cancer in the system, intermittent wind and solar ($66 billion worth), was forgiven, and central planning of the state’s grid by Austin politicians, regulators, and administrators was treated as a neutrality.…

Ed Note: “Electric natural gas compressors contributed to the near collapse of the Texas power grid in 2021,” Ed Ireland argues below. “All U.S. power grids face the same risk.” His first-hand knowledge of this instance of ‘deep decarbonization’ politics gets to the why-behind-the-why of the still-debated Texas blackout, the worst electricity debacle in the history of the industry.

“The anti-fossil fuel movement started pressuring North Texas cities and towns to require electric compressors on natural gas pipelines based on arguments that the air pollution from natural gas-powered compressors was causing increased asthma and other health problems…. I said that electrifying natural gas pipeline compressors was a terrible idea that could affect the availability of natural gas when it was needed most, such as during bad weather events. Unfortunately, I lost that debate….”

Is there a ‘free market’ solution to the question of capacity incentives versus volumetric charges? I contend this the PUCT/ERCOT is in a central planner situation versus a true free market where integrated gas and power companies would solve the economic calculation problem, not state and federal regulators. More here: https://www.masterresource.org/texas-blackout-2021/central-planner-ercot-worked-as-planned/

Joseph Pokalsky: Integrated gas and power companies and gas companies are monopolies, don’t compete, and essentially tax ratepayers through rate setting by Public Service Commissions, a.k.a. Central Planning Committee Kommissors.

Robert L. Borlick: ERCOT is the furthest away from a central planning paradigm as any power system I know of. To argue that a free market consists of integrated gas/power companies is laughable. You don’t appear to understand the concept of a natural monopoly. As for the document you cited, it is a political rag that misrepresents the situation in Texas and unfairly blames Professor William Hogan for the irresponsible behavior of the Texas politicians.…