Part I yesterday provided an introduction and summary of results; this post describes in more detail the analysis approach and implementation costs. Parts III and IV will cover the full costs and other results.

As will be seen, dealing with wind is not as easy as some would suggest.

Analysis Approach

This analysis looks at a 13 year period (years 0-12) in which the demand growth and plant retirement due to obsolescence/age will be each 2% per year compounded. Assuming year 0 is 2012, year 12 is 2025. Table II-1 shows the situation at year 12.

Table II-1 – Year 12 Situation for a Year 0 Demand Level of 1.0 TWh

Using demand of 1 TWh in year 0 allows easy scaling for a particular jurisdiction. For example in 2010 the total US electricity production was about 4,000 TWh.…

“I can’t downplay this. It’s obviously very exciting for us…. This is opening up a new chapter in Alaska’s oil and gas history that is literally starting today.”

– Pete Slaiby, Shell Alaska. Quoted in Jennifer A. Dlouhy, “Shell Begins Drilling Well off Alaska,”  San Francisco Chronicle, September 9, 2012.

Profit-seeking, consumer-directed business is proper, necessary, and heroic. Free-market-based energy enterprises (oil, gas, and coal) are quite unlike government-dependent (crony) businesses (ethanol, windpower, and on-grid solar). Ken Lay’s Enron is (was) a leading example of the latter; Koch Industries’ Charles Koch, writing in the Wall Street Journal yesterday, epitomizes the former.

Shell has scaled back its (scarcely profitable) renewable energy investments and is back to its oil and gas roots. Its advertising is no longer about pie-in-the-sky energies and more about here, now energy.…

Seven score and nine years ago, President Lincoln spoke about government of the people, by the people, and for the people.  Yet, today, our lives are determined not so much by We the People, as by a distant central government, particularly increasingly powerful, unelected and unaccountable executive-branch agencies.

Consider the U.S. Environmental Protection Agency (EPA), arguably the most intrusive administrative agency of all. Under Administrator Lisa Jackson, we have, at best, government of, by, and for some people. Or in the words of one public-choice economist, a government “of the Busy (political activists), by the Bossy (government managers), for the Bully (lobbying activists).” [1]

Secretary Jackson seeks not merely to regulate, but to legislate; not merely to protect our health and environment against every conceivable risk, but to control every facet of our economy, livelihoods and lives.…

Editor note: This post follows those of Walter Donway, who authored Crony Capitalism: Principles (Part 1) and Crony Capitalism: Practice (Part 2).

America’s energy industries (oil, gas, electricity) have been a bastion of crony capitalism for much of their history. Leading gas and electricity firms sponsored state and then federal public-utility regulation during the Progressive Era and New Deal. Like other so-called public utilities, they welcomed the prospect of making commission-approved “reasonable” profits in an entry-restricted environment rather than taking their chances in open-entry markets.

The U.S. coal industry also longed for federal aid. “The bituminous coal industry has been one of the most chaotic industries in the United States in recent years,” an Ohio University professor wrote in 1940. “Because of this lack of order it has recommended itself to the Nation as an industry urgently in need of social control and, as a result, it has come to serve as a significant laboratory for experiments in certain types of government regulation.”…