Between the current financial mess and the debate over carbon dioxide emissions controls, there is a lot of talk about regulation these days. We are told, for example, that the recession would have been prevented if proper regulations had been in place. While it is true that (by definition) the “right” regulations would have prevented bad and ensured good, it is also true that had an omniscient, omnipotent, omnibenevolent dictator been in charge, the recession would have been avoided as well. The problem, of course, is that God, being otherwise occupied, didn’t run for President during the last election.
Enacting the right regulations is somewhat simpler than electing an omni-everything being to run the world, but not much. As evidence, consider the fact that it was a lot of the wrong regulations that got us into this mess in the first place. …
Continue ReadingSharp increases in windpower output on the Pacific Northwest electricity grid has lead to a number of problems. This has fallen into the lap of the Bonneville Power Administration (BPA), the Pacific Northwest federal power marketing authority that must integrate the large influx of wind energy into the electricity grid.
In 1998, the BPA’s wind generation was roughly 25 megawatts (MW). Today, it totals 2,780 MW and, with the Oregon Renewable Portfolio Standards passed in 2007, over 6,000 MW of wind power is expected to be on-line by 2013. Often overlooked are the impacts of increasing wind generation on the reliability and affordability of electricity that might very well outweigh any of the environmental benefits that are proclaimed to exist.
The negative aspects of wind are quite apparent. Obviously, wind is unpredictable and inconsistent, creating a significant problem for BPA and electric utilities.…
Continue ReadingIn the last few weeks, rhetoric about America’s oil addiction has resurfaced, years after being pushed by former President George W. Bush. It is meant to explain the inability of Americans to become energy independent or at least to significantly reduce consumption. The implication is that consumers are either foolish or brainwashed, and that the government is a slave to the oil industry’s lobby.
I submit that this claim reveals an ideological bias, as well as a degree of energy illiteracy.
Such illiteracy is not new and is often battled by economists. For example, when I was at MIT, one class was taught by an engineer who believed that oil was underpriced because it cost less than mineral water. I didn’t have the heart to tell him that this is a common misconception: the prices of the two are completely unrelated. …
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