“Falling commodity prices in general are a good thing in a free market because, as economist Ludwig von Mises emphasized, the sole end of production is consumption. Consumption first, production second. Also the US is a net importer of both oil and natural gas, which means we consume more than we produce. So provincially speaking, the US gains more than it loses from well-to-pump or well-to-burner-tip price drops.”

Business consultant Carlos Lara and I produce a monthly financial publication, the Lara-Murphy Report, which highlights the Austrian School of economics in both academia and the financial markets. The January 2016 issue interviewed Rob Bradley of Houston, Texas, who was trained in Austrian-school economics and is a longtime historian of oil markets. This interview is reproduced below.

Robert L. Bradley Jr. is the founder and chief executive officer of the Institute for Energy Research (IER), a 501(c)3 educational foundation with offices in Houston, Texas, and Washington, D.C.…

“The month-long decommissioning project was the first in the world for an offshore wind farm, but more projects will soon follow as early turbines reach the end of their two-decade lifetimes.”

– Sonal Patel, “Vattenfall Completes World’s First Decommissioning of an Offshore Wind Farm.” Power magazine, April 1, 2016.

“… many calculations of the much relied on measure of levelized hourly cost assume a 30-year lifetime…. As a result, many publications of levelized costs for wind turbines are understated by a factor of about two.”

– Kent Hawkins (below)

The April 2016 issue of Power Magazine contains a very likely revealing story on offshore wind plants. Given the political correctness of wind power, the revealing story can be interpreted in two ways:

1. It is critical of offshore wind plants, but in a way that is not clearly so, or
2. It is not critical, but the writer was not careful about what was being said.

[Editor note: An under-the-radar energy intervention is to force fossil-fuel fired water heating to go electric “regardless of adverse economic impacts,” as Mark Krebs explains in this post and Part I yesterday.]

Why should electricity monopolize energy if gas-fired alternatives are more economical as determined by self-interested consumers?

If the objective is low carbon water heaters, there are more direct means of doing so. The following graphics compare the full fuel-cycle efficiencies of traditional gas water heater to electric water heaters:

Gas Storage Water Heater Site and Source Energy Efficiency

Electric Resistance Storage Water Heater Site and Source Energy Efficiency

Note: The previous two graphs are used with permission form the Gas Technology Institute

The electric utility industry prefers a site-based energy efficiency metric because it can indicates that switching to an electric resistance water heater from a gas water heater can “save” over 30% more energy. …

“In the United Nations Paris Accord last December world leaders promised to try to reduce future emissions. These politicians shamelessly clapped each other on the back, pretending they had accomplished something important. However, they had agreed beforehand not to even discuss the only action that could rapidly reduce global emissions.”

– James Hansen, “‘I am an Energy Voter’” February 23, 2016.

James Hansen is mad at the “I am an Energy Voter” campaign that encourages consumers to vote for their favorite energies at the ballot box, not only at the pump. Hansen, in fact, is mad at the free society where buyers voluntarily buy and sellers voluntarily sell. Ludwig von Mises called that consumer sovereignty.

Hansen wants otherwise. Renewables as savior is for the Tooth Fairy, he believes, so nuclear and forced conservation (conservationism) is atop his agenda — forced by a punitive carbon tax (or fee-and-dividend as he puts it).…