Part I examined the true costs of ethanol and windpower to find that both were highly uneconomic compared to their alternatives. Both government-dependent fuels are also inferior products, making a straight comparative cost comparison misleading.
The environmental characteristics of both ethanol and windpower are also problematic compared to their more energy-dense, consumer-preferred alternatives.
Is Ethanol Green?
Given the high cost of the ethanol mandate, the putative benefits – energy independence, green jobs creation, environmental improvement – come at a steep price. But costs aside, there are other reasons to doubt whether these benefits are real. The gulf between hype and reality is perhaps greatest when it comes to environmental performance.
The negative environmental externalities associated with petroleum-derived fuels – particularly oil spills, air pollution, and greenhouse gas emissions – have long been a major focus of the environmental movement and federal regulators.…
Continue ReadingRepeating past mistakes is an unfortunate but common part of federal policy, and perhaps no more so than with energy. Indeed, much of the Obama administration’s “clean energy economy” and “energy independence” agenda is a virtual repeat of the follies from the 1970s – failed attempts by Washington to pick winners and losers amongst alternative energy sources and energy-using technologies, as well as taxes and regulations that exacerbated the very concerns they were supposed to address.
One of the Reagan Administration’s lesser-remembered successes was the repeal of much of this government meddling beginning soon after taking office in 1981. Reagan’s turn away from energy central planning and towards free markets brought down energy costs and helped launch a long period of economic growth.
Of course, this decades-old lesson may be lost on younger politicians, bureaucrats, and activists who seem unaware that their energy policy ideas are proven failures from the age of disco.…
Continue ReadingWe’ve all heard the pitch about how wind is free and that once a windpower facility is constructed, the cost of generation is appropriately set low thanks to no fuel expense. We’re also often reminded that no fuel cost means wind will help insulate consumers from wildly fluctuating energy prices.
The concept is easy to grasp, and rural communities considering whether to host a wind facility are likely to conclude that the project will produce local and regional benefits in the form of lower electricity bills.
Think again
The fact is, the price of electricity within a grid region is set at a single price known as the market-clearing price (MCP). In most organized electricity markets, electricity generators are encouraged to participate in a daily or day-ahead auction process whereby a uniform market price–the MCP–is established.…
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