Energy & Creative Destruction: Fossil Fuels Triumphant

By Robert Bradley Jr. -- January 4, 2012 9 Comments

Creative destruction , a term popularized by Joseph Schumpeter, is the market process whereby bad is eliminated, the better replaces the good, and past performance gives way to new strategies and victors. No firm is forever, and financial loss is a characteristic of capitalism, as is the more used term profit.

Energy is the story of creative destruction. Coal gas and later coal oil replaced a variety of animal and vegetable oils, including whale oil, camphene oil, and stearin oil. Crude (mineral) oil then displaced manufactured (coal) oil, just as later natural gas would displace manufactured (coal) gas.

Coal itself displaced primitive biomass (burned plants and wood) and other forms of renewable energy, such as falling water and wind. Fossil fuel was a concentrated, continuous-burn industrial-grade energy.

The intensity of fossil energy can be understood as a stock of the sun’s work over the ages, not a dilute flow from the sun (solar, wind)–or a low-density mass from limited years of sunshine (biomass).

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Capitalist Reality and Creative Destruction (Part II: Enron's Political Capitalism Play)

By Robert Bradley Jr. -- January 3, 2012 2 Comments

Enron’s revolution-always approach to energy in its latter years was Schumpeter on steroids. Adding to the company tumult was another complicating factor: Enron’s business model was dependent on political, not free-market, capitalism.

In early 2001, Enron founder and chairman Ken Lay proclaimed a new corporate vision: to become the world’s leading company. But this goal was not about beating oil majors like ExxonMobil or Chevron at their game. It was about mandatory open-access with gas and electricity transmission to trade the commodities; reducing tax bills with solar and wind investments (what GE does today with what was once Enron Wind); developing infrastructure in risky countries with government-guaranteed financing; and more.

Enron’s Business Guru

Lay’s super-Schumpeterian view of business strategy drew upon Peter Drucker’s The Age of Discontinuity, which Professor Lay taught to his graduate economics students at George Washington University in the early 1970s.

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MasterResource Turns Three (4Q-2011 Activity Report)

By Robert Bradley Jr. -- December 26, 2011 7 Comments

The free-market energy blog MasterResource turns three years old today. On December 26, 2008, the blog started on the strength of several noted free market scholars buying into a ‘movement’ blog instead of an institution-specific one. A thank you at this reflective time goes to Ken Green (AEI), Marlo Lewis (CEI), and Jerry Taylor (Cato), in particular.

MasterResource views stand at 1.1 million. While not a megablog, ours is a high-quality contribution to the current energy debate–and a resource for the historical record (our extensive index categories number 380).

We have published approximately 914 posts from approximately 115 authors. Some are widely published; others are talented amateurs who have chosen to do what the ‘experts’ choose not to do: uncover the problems of politically correct energies. Comments from our loyal, sophisticated readership add substance to many of the in-depth posts.…

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European Energy Policy: Tramping in the Dark (Andrew MacKillop on the reality of failing public policy)

By Kent Hawkins -- December 23, 2011 7 Comments

The European Energy Review has published a comprehensive article on the EU energy policy, entitled “Europe’s green energy chaos” by Andrew MacKillop (sometimes appearing as McKillop), an independent energy analyst and project advisor who has written on energy topics for over 35 years, and who worked for the European Commission’s Directorate-General of Energy as a policy expert in the 1980s.

EU policy can be summarized as 20-20-20 by 2020. Catchy isn’t it? It means 20% improvement in energy efficiency, 20% reduction in emissions, and 20% use of new renewable energy sources – all by 2020.

When publicized, the EU plan was (properly) criticized by the Economist and Dieter Helm, the chairman of the ad-hoc committee established by the EU to provide expert advice. MacKillop’s critical analysis of the current problems of government-heavy energy policy is spot on.…

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Al Gore Reinvention? (From 'climate change' to 'sustainable capitalism')

By Robert Bradley Jr. -- December 20, 2011 8 Comments Continue Reading

Anatomy of a Debate: Rejecting Renewable Energy at THE ECONOMIST (Part II)

By Jon Boone -- December 14, 2011 5 Comments Continue Reading

Anatomy of a Debate: Rejecting Renewable Energy at ECONOMIST Magazine (Part I)

By Jon Boone -- December 13, 2011 4 Comments Continue Reading

"THIS AGREEMENT WILL BE GOOD FOR ENRON STOCK!!" (Enron's infamous Kyoto memo 14 years ago)

By Robert Bradley Jr. -- December 12, 2011 6 Comments Continue Reading

The Perils of the Mixed Economy: Rejecting 'Starter Regulation'

By Robert Bradley Jr. -- December 9, 2011 1 Comment Continue Reading

North America's Incredibly Expanding Resources (New study puts 'peak' oil, gas, and coal in some future century)

By Robert Bradley Jr. -- December 7, 2011 6 Comments Continue Reading