“[T]here are, at bottom, basically two ways to order social affairs. Coercively, through the mechanisms of the state … and voluntarily, through the private interaction of individuals and associations…. Civil society is based on reason, eloquence, and persuasion, which is to say voluntarism. Political society, on the other hand, is based on force.”
– Edward Crane (quotation), founder, Cato Institute
The worldview for entrusting consenting adults with energy is, broadly speaking, libertarian. Consumers are more knowledgeable than government agents on what (energy) products are most valuable in terms of convenience, price, and reliability. And as experience has shown time and again, politicizing energy creates problems rather than solves them. Restated, there is government failure in the quest to address alleged market failures.
Obama’s GOVERNMENT
Arguments about energy also apply to health care, money and banking, and other pillars of the modern economy.…
Continue Reading“[Free energy] markets tend not only to clear, but to clear faster and at lower prices than anticipated.”
The resignation of Aubrey McClendon as CEO of Chesapeake Energy provides a good case to study in corporate strategic planning. Ignoring his financial side deals, for which he has received a good share of criticism, the wisdom of his primary strategy, the aggressive pursuit of shale resources, is an open question to many. Although he has been hailed as a pioneer and risk taker, clearly those risks have gone bad and should be examined.
Higher Prices: A Bad Bet
The core failing was his decision to bet the firm (essentially) on high natural gas prices. From 1997 to 2005, wellhead prices had increased from $3/Mcf to $8/Mcf (2010$), the highest level historically. This, combined with a neo-Malthusian mentality, convinced him and many others that prices would not be mean-reverting, but remain at levels from two to three times the historical average.…
Continue Reading“[T]here is no companion prerequisite that such renewable programs be cost-effective or deliver reliable power…. This program appears designed for the privileged few to enjoy a subsidized electric energy existence, provides those ‘green bragging rights’ mentioned by a solar installer in this courtroom last September, but little else.”
Last May, Dominion Virginia Power petitioned the Virginia State Corporation Commission to introduce a voluntary ratepayer program to support up to 3 MW from distributed solar installations. Dominion seeks to offer the public an alternative to an existing, net-metering, residential solar panel program. This voluntary test Solar Panel Program would be guaranteed for five years at a “buy all/sell all” $0.15/kWh. It would be limited to an initial maximum scale of 0.2 percent of 2010 peak load.
Solar is an intermittent power source that would require storage to be on a stand-alone basis.…
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