Bryce’s “A Question of Power”

By Bill Peacock -- April 21, 2020

Roughly 3.3 billion people—about 45 percent of all the people on the planet—live in places where per-capita electricity consumption is less than 1,000 kilowatt-hours per year, or less than the amount used by my refrigerator.

By 2017, more than 6,600 coal-fired power plants, with a combined capacity of about 2,000 gigawatts, were operating around the globe…. Not only that, coal’s share of global electricity production has remained nearly constant, at about 40 percent, since the mid-1980s. Why is this? For the simple reason that coal is cheap and widely available.

Americans are currently facing significant uncertainty over how the drop in oil prices, the COVID-19 virus, and governments’ response to both will harm the economy and their long-term prosperity.

However, the harm caused by governments that limit access to affordable and reliable electricity is well understood.

That’s one of my big takeaways from Robert Bryce’s excellent new book, “A Question of Power.”

Throughout history most humans have lived on the edge of subsistence, almost completely dependent on how much sun and rain came their way. And while for many life is much better today because of electricity, others living in what Bryce calls “Unplugged” countries, like El Salvador, the Philippines, Bolivia, Pakistan, and India, are still living in the past:

Roughly 3.3 billion people—about 45 percent of all the people on the planet—live in places where per-capita electricity consumption is less than 1,000 kilowatt-hours per year, or less than the amount used by my refrigerator.

That consumption is less than a quarter of the 4,000 kilowatt-hours per year per capita electricity use that Bryce suggests is “considered the minimum for living a long, high-quality life.”

Bryce adroitly marshals the facts to clearly show the connection between increased electricity use and increased health and prosperity. For instance, he examined a number of studies that

found “unidirectional causality between electricity consumption and economic growth.” That is, electricity use drives economic growth. While electricity drives economies, it is also clear that greater wealth increases electricity consumption. That makes sense. As people get wealthier, they consume more electricity because they can afford more electrical devices.

He also points out that the “close correlation between electricity use and human health and economic growth has become so obvious that international investment bankers have adopted electricity use as a measure of economic activity.”

He continues: “By using hydrocarbons (at first coal, then later oil and natural gas) humans were able to harness ever increasing quantities of power and do so in ever-denser packages. In place of animal power, sun power, and wind power, factories began using advanced waterwheels and coal-fired steam engines.”

So why is it that almost half of the world’s population are living in Unplugged countries where they “are using about the same amount of electricity as an average resident of Chicago did back in 1925?”

• 

Source: A Question of Power

It is because the progress of the last 200 years has not taken place uniformly. Bryce explains that the three critical components to an affordable and reliable supply of electricity—integrity, capital, and fuel—have often been in short supply in many parts of the world.

By integrity Bryce means that the system must not “leak,” either because of poor design, poor maintenance, or theft. “People who operate the grid, as well as the people who rely on it, need to have some sense of responsibility for it. Or, if they don’t feel responsible for the grid, they have to fear getting caught and punished for stealing electricity.”

This often doesn’t happen, however, in impoverished countries operating without the rule of law because the elites have “organized society for their own benefit at the expense of the vast mass of people.” In countries where the elites are best at oppressing their citizens, corruption is rife, black markets abound, and grids leak.

That is, to the extent they have grids in the first place. To build those, societies also need capital, the second component. “Keeping theft and corruption at a minimum is imperative because theft robs the grid of the capital it needs,” say Bryce. In fact, it robs entire countries of the capital they need to prosper. Particularly when the theft comes from oppressive governments through high taxes, heavy regulation, confiscation of property, and inflation of the money supply. People in countries like this often can’t afford to build a reliable grid, or much of anything else.

The last of the three “key determinants of the quality, cost, and cleanliness of the electricity” that we consume is fuel: “Without fuel, you can’t make electrons move.” Bryce makes it clear that the fuel of choice around most of the world is coal.

By 2017, more than 6,600 coal-fired power plants, with a combined capacity of about 2,000 gigawatts, were operating around the globe. That coal-fired capacity accounted for nearly one-third of all global generation capacity. Not only that, coal’s share of global electricity production has remained nearly constant, at about 40 percent, since the mid-1980s.

Why is this? For the simple reason that coal is cheap and widely available:

The world has gargantuan coal deposits. At current rates of consumption, global coal reserves are projected to last another 134 years. The United States and Australia both have more than three hundred years’ worth of coal reserves in the ground. Russia has nearly four hundred years’ worth. The large number of countries that produce and export coal allows buyers to compare prices from a number of suppliers and therefore get the best quality and price.

Add natural gas to coal, and it is clear that (in contrast to integrity and capital), over the last 200 years there has not been a general shortage of the affordable fuel we need to generate electricity.

At least not yet. But that is changing as the political leaders of the High-Watt World are doing their very best to make fuel more expensive and less available. In three ways.

First, they are imposing draconian controls on the use of carbon-based and nuclear fuels, controls that do nothing to improve human health. Whether it is micromanaging every aspect of the design of nuclear generators or requiring levels of particulate emissions that are below the natural levels, the government has dramatically and artificially increased the cost of electric generation from these fuels.

Second, they are taking billions of dollars from taxpayers and giving it to corporations with markets caps totaling into the hundreds of billions to subsidize wind and solar generation. In the U.S. alone, my calculations show, taxpayers have ponied up more than $80 billion since 2006.

Top 11 Recipients of Federal Tax Credits for Wind
Source: Angela Erickson and the Texas Public Policy Foundation

All this money is going to unreliable and inefficient sources of energy that can never supply us with the energy we need at any cost. Wind and solar generate electricity only when the wind is blowing or the sun is shining. Because of this, they require battery storage so that we’ll have electricity when we need it. Yet Bryce calculates “storing the 9.6 terawatt-hours of electricity needed for California to get 80 percent of its electricity from renewables would require the state to install more than seven hundred million Power walls” (Tesla’s latest battery). The truth is that every penny spent on renewable energy is being wasted.

Third. they are seeking to completely eliminate the use of coal as a fuel because of concern about climate change. Bryce notes that even as coal use around the world is thriving, in the U.S. “more than half of all coal plants have announced planned closures since 2010.”

If I had one nit to pick with A Question of Power, it would be that it takes more or less as a given that the world needs to do something to address CO2 emissions to reduce man’s effect on the climate. On this topic, there is little of the insightful analysis used elsewhere in the book to challenge the conventional wisdom.

Yet there is plenty to challenge, as Patrick Michaels and Caleb Stewart Rossiter explain:

Computer models of the climate are at the heart of calls to ban the cheap, reliable energy that powers our thriving economy and promotes healthier, longer lives. For decades, these models have projected dramatic warming from small, fossil-fueled increases in atmospheric concentrations of carbon dioxide, with catastrophic consequences. Yet, the real-world data aren’t cooperating. They show only slight warming, mostly at night and in winter.

They go on to cite atmospheric scientist John Christy, an author for a previous edition of the U.N. report on climate change, who “recently concluded that, on average, the projected heating by the models is three times what has been observed.”

The story told in a Question of Power (through my lens) is one of scientists, politicians, and activists holding themselves out as experts and telling us how to power the world while taking our money to make us pay for their ideas.

This is not unrelated to the current COVID-19 situation where the models developed by the experts have failed even faster than the climate change models, yet politicians all across the world are taking advice from these experts about how deal with this pandemic.

Bryce doesn’t focus as much on the elite and government in his book as I do here, but he does give us plenty to think about when it comes to the future of powering this world. In particular, he shows us through discussions of the high tech and financial industries that the electrification of the world that began less than 200 years ago has shown no sign of slowing. He makes a compelling case that the demand for electricity is going to continue to grow and displays his optimism that we’ll succeed in our efforts to meet this demand:

Electricity has conferred on us a bit of the creative power that God showed in Genesis. With the flip of a switch, we can kill the anti-God and banish darkness. With a touch of our mobile phones we can ensure safe passage through a strange hotel or garage at night. With quadrillions of electrons at our beck and call, we can create as much light as we want.

I join him in that optimism, with one caveat: the path to increased electrification and protection from disease–and everything else–will continue to be hindered until voluntary exchange through free markets usurp overregulation by the governing elite.