“I see no force in modern society which can cope with the power of capital handled by talent, and I cannot doubt that the greatest force will control the other forces.”

– William Graham Sumner. “Economics and Politics” [1905]. In Earth-Hunger and Other Essays. 1913. Edited by Albert Galloway Keller. Reprint. New Brunswick, NJ: Transaction, 1980, p. 329.

“It is precisely the fact that the market does not respect vested interests that makes the people concerned ask for government interference.”

      – Ludwig von Mises, Human Action (4th Edition), p. 337.

Jim Rogers (Duke Energy), Aubrey McClendon (Chesapeake Energy), John Rowe (Exelon), T. Boone Pickens, Matt Simmons…  The list goes on of the political capitalists (aka “rent seekers”) who, in the tradition of Ken Lay and Enron, are politicizing the energy market for momentary advantage–but all in the name of saving the planet.…

[After publication of my New York Times Op-ed on peak oil, Joseph Romm posted a response—and a challenge—on his website, and later expanded it on The Huffington Post. Below is Michael Lynch’s response.]

Thank you very much for your invitation to a wager on the price of oil, Joe, which I take to be serious, even though you made no effort to convey the wager to me personally. (If you were simply making a “‘pr” effort, feel free to withdraw it.) I would warn you that for most of my career I have been referred to as a ‘heretic’ or ‘contrarian’ and have repeatedly outperformed other forecasters by explaining (in a number of academic publications) why the forecasting of oil price and supply has been so deficient. That you appear to have been more prescient than me no doubt gives you confidence.…

Should the U.S. join OPEC? After all,  the U.S., home of the never-ending calls for “energy independence,” is an oil exporter. A big one.

Through the first six months of 2009, America’s daily exports were averaging 1.9 million barrels per day.[i] At that level, U.S. oil exports are on a par with countries like Angola and Venezuela.[ii] Of course, the vast majority of those exports are refined products, not crude. And those exports are also largely a function of America’s position as the world’s largest oil importer, which means that OPEC membership is rather unlikely.

Nevertheless, the fact remains that the U.S. is an integral player in the oil market. And there has never been a bigger, more global, more integrated, more transparent market than the modern crude oil and oil products market.…

[Yesterday’s post discussed how FERC failed to implement the siting authority granted in the Energy Policy Act of 2005 and examined a case study about why it failed. Part II looks at Obama’s “green power” superhighway, the recent work by regional transmission planning organizations to bring renewable energy to market, and the extremely high costs to do so.]

Public policy has long supported the ability to construct new transmission lines that relieve congestion and reduce the cost of energy to consumers. However, it is another question entirely to construct a new “green” coast-to-coast transmission corridor given the mess our transmission system is in today and its prohibitive cost. Critics have complaint that it is throwing good (transmission) money at bad (renewable) generation money.

Slowly, regional system operators are resolving transmission bottlenecks and improving the smooth flow of energy in their service territories.…