A calm has descended over the federal government’s initiatives in energy amid the furor over health insurance legislation. The respite is welcome, but the sturm und drang of clashing interests will resume in earnest after Congress’s summer recess. There is too much money on the table–our money–for the favor-seekers to ignore.

A Banana Republic?

Increasingly, it is clear that the initial cap-and-trade legislation was insufficiently opaque. Numerous analyses of Waxman-Markey (HR 2454) on this site and others have shown that the proposed cap-and-trade legislation will cost consumers dearly by raising the prices of electricity and gasoline, while ignoring viable sources of clean energy that have not yet found the key to the federal treasury.

With so much money at stake, each of the contestants (call them rent-seekers, some of them reluctant players in the political capitalism game) will attempt to gather up as much of the pot as possible.…

“[The Waxman-Markey] 1,400-page bill is a farce. They bought every industry off—steel mills, agriculture, utilities…. I would not only not vote for it. I am opposed to it entirely, because it does damage to those of us who believe that we need to act in a rational fashion about climate change.”

– Senator John McCain to Stephen Moore, Wall Street Journal, August 1-2, 2009, p. A9.

“The truth is, the climate course set by Waxman-Markey is a disaster course. It is an exceedingly inefficient way to get a small reduction of emissions. It is less than worthless….”

-James Hansen, “Strategies to Address Global Warming,” July 13, 2009.

The death of federal climate legislation in 2009 will not only be because traditional Republicans and conservative Democrats said “no”. It will also be because true believers like Senator John McCain realize that politicized cap-and-trade is all pain and no gain.…

[Editor note: Michael Giberson , an instructor and research associate at the Center for Energy Commerce at Texas Tech University’s Rawls College of Business, blogs on energy economics (including wind power) and other topics at Knowledge Problem.]

Market-oriented policy analysts have not been shy about cataloguing the problems surrounding windpower development. But in the enthusiasm to oppose the government interventions accompanying wind generation, market-based analysts sometimes have strayed beyond principled defense of markets and unwittingly offered support to anti-market NIMBYism and other meddlesome sentiments. Policy analysts examining wind power issues should consider more carefully which issues ought to be pursued through the policy process.

Two Images

Wind power has two images. In one view, wind power is glamorous, hi-tech, future oriented and almost sexy. Advertisements for products from automobiles to watches to banking services casually feature tall, slowly spinning wind turbines in the background, hoping to suggest that the advertised product, too, is glamorous, hi-tech, and future oriented, and maybe a bit sexy.…

Secretary of the Interior Ken Salazar, speaking in Atlantic City in April, added more hot air to the discussion about offshore wind when he stated that windmills off the East Coast could generate enough electricity to replace most, if not all, of the coal-fired power plants in the U.S.

Yet such would require offshore wind turbines stacked almost a hundred miles deep from Maine to Florida. I’m disappointed Salazar didn’t take a few minutes for fact-checking and back-of-the-envelope ciphering before his speech or he would have discovered that his estimates are pure bluster.

I am reminded of all this as I read of Germany’s plan to get offshore wind in the mix, forcing power-grid operators to build sea cables at their expense and requiring buyers to pay $0.21/kWh for the power.…