Filed under: Capitalism, Democrat Corruption, Domestic Policy, Economy, Energy, Media Bias, Regulation, Statism | Tags: Everything Costs More, Excessive Regulation, Higher Electricity Costs
America is is the midst of an energy boom. Fracking technology has released abundant oil and gas stored in shale deposits. The amazing paradox of the domestic fossil-fuels boom has been overwhelming destructive federal government policy. The U.S.Oil boom driven by private investment and ingenuity has transformed North American oil markets. The International Energy Agency estimates that America will surpass Saudi Arabia and Russia as the world’s largest oil producers by 2015.
Oddly, in the midst of an energy boom, U.S. electricity prices have skyrocketed to new highs. This paradox is not a result of the free market, but of runaway “green” regulation by the government. In November, the BLS Electricity Price Index hit 202.284, an all-time record high nearly 20% higher than just six years ago. According to the U.S. Energy Information Administration, in 2008 the U.S. produced 2.1 billion cubic feet of natural gas per day. Today, it’s 12.3 billion cubic feet and growing fast. But as energy booms, electricity prices are going up as well.
What is at work here is the green movement’s moral beliefs about what kinds of energy are “good.” Wind and solar power, which are “morally pure” cannot exist without generous governmental (taxpayer) subsidy. Wind and sunshine are of course free, but as producers of electricity, very expensive. The wind is intermittent and must be backed up 24/7 by conventional power, and the wind may not blow for days at a time. The sun goes down at night, and only shines in the day when the clouds don’t cover it. Trust me, I live in the Seattle area. We call the occasional appearances of the sun “sun-breaks.”
Electricity is now one of the most regulated goods in the U.S. The Environmental Protection Agency has sweeping powers to regulate CO2 — a power not found anywhere in the Constitution, electricity has become even more expensive, and will get more so. The EPA’s new rules, put in place to pander to the environmental movement will remove 34,705 megawatts of coal-based energy capacity off the market. This will increase electricity prices and the cost of everything where electricity is used.
This is a de facto ban on all new coal-fired power plants in spite of the fact that coal produces a third of all electricity in the country due to its cheap coast and plentiful supply. Despite the fact that CO2 levels are falling in the U.S., not rising, and despite the fact that the earth is cooling, not warming, as it has been for the last 17 years.
The demonization of coal and other fossil fuels means that utilities must shut coal-fired plants, and replace them with more costly energy sources like wind and solar. This is an enormous hidden energy tax, levied on every individual and every business — killing jobs and adding to the unemployment rolls.
Chicago political rules mean you must reward your financial supporters. The environmental movement is flush with money, wind and solar are awash with crony capitalism, and besides, the cost of higher electric bills will be borne by taxpayers.
Of course higher electricity bills on top of higher grocery bills, higher cost health insurance and higher cost of medical care may seem unreasonable. When confronted with a problem, Democrats first reaction is to make a law, to regulate. But that’s where the whole problem came from in the first place — excessive regulation.
Ironically, the very success of economic and political freedom reduced its appeal to later thinkers. The narrowly limited government of the late nineteenth century possessed little concentrated power that endangered the ordinary man. The other side of the coin was that it possessed little power that would enable good people to do good. And in an imperfect world there were still many evils. Indeed, the very progress of society made the residual evils seem all the more objectionable. As always people took the favorable developments for granted. They forgot the danger to freedom from a strong government. Instead, they were attracted by the good that a stronger government could achieve — if only government power were in the “right” hands.
…………………Milton and Rose Friedman: Free to Choose
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