In its quixotic quest for renewable energy, the government is picking more losers than winners.
Benjamin B. Phillips
The Senate continues to consider a range of energy policy proposals, and may take one or more up during the “lame duck” session after the November elections. It is not yet clear which ones will emerge. However, some of the options include renewable electricity standards, requiring power companies to include renewable energy (wind, solar, geothermal) as part of their electricity generation mix, and do so in escalating percentages by specific dates – regardless of whether affordable, reliable technologies actually exist by those dates.
Alternatively, some other scaled-down energy bill could potentially be reconciled with the comprehensive cap-tax-and-trade scheme that the House passed last year.
A central element in each of these proposals will be ways in which the Federal government will try to “incentivize” business to reach federally mandated goals for energy savings and reduction of carbon dioxide emissions. Of course, taxation will be part of the mix, as will direct regulation. But another facet of any bill which passes the Senate is likely to be tax breaks and federal (taxpayer and consumer) subsidies for favored approaches to creating and saving energy.
In a period of economic recession and potentially catastrophic budget deficits, the cost-effectiveness of these proposals will be not only an economic and fiscal issue, but also a moral question. Proverbs teaches us that “in the house of the wise are stores of choice food and oil, but a foolish man devours all he has” (21:20). Our government has not been very wise about spending our tax money for quite a while, as our $13 trillion national debt shows.
Proverbs, and our recent history, prompts us to ask whether Senators can play the role of “the wise” when it comes to picking which technologies to subsidize, and which to ignore. Can Congress really legislate the most efficient and effective use of our money, when it comes to our choices about energy production and consumption? Does it have the expertise and wisdom – or the ability and willingness to do so outside the realm of politics and political favors?
Take as a test case the governmental push for wind turbines as a source of energy, in comparison to the “recycling” approach begun in Indiana a few years ago.
Wind power is at the cutting edge of environmental-chic. Images of wind farms, with their tall towers and rotating blades, simply scream “eco-friendly” (though no one wants them in their neighborhoods, and birds and bats don’t like them either). Politicians have rushed to spend taxpayer money on these projects – to the tune of $93 million in last year’s “Recovery Act” alone.
Yet wind-based electricity is notoriously unreliable (working only 7-hours a day on average) and expensive to construct (requiring 10 times more steel and concrete than other sources to produce the same amount of electricity less dependably). Wind is also expensive (and carbon-intensive) to back up, because it requires natural gas or coal-fired generators that kick in when the wind dies down or blows too hard; that’s about as energy-efficient as flooring your gas pedal every time the light turns green, only to slam on the breaks at each stoplight.
Even the claim that wind-projects create jobs is suspect. Spain’s wind program cost $754k for every job created, and one of President Obama’s recent “green jobs” proposals would spend over $1,000,000 per job created! All this for a technology that cannot compete with existing power sources without such subsidies.
“Recycled” power, on the other hand, does not receive such lavish support. Recycled power technologies are systems that use energy wasted from one process to fuel a second process. One prominent, recent example is the Arcelor Mittal steel mill in East Chicago, IN. This company installed boilers mounted over their blast furnaces to heat water into steam, which in turn powers turbines, which produce electricity for the plant. Arcelor Mittal is now saving over $100 million a year in electricity costs, all without direct government funding.
The point is not that recycled energy projects should be federally subsidized (though that would certainly be a better use of taxpayer dollars than wind farms). Instead, the point is that the government has picked wind as a “winner” over recycling energy projects like the one in East Chicago. It has bet our money on the wrong horse.
There is a better system for allocating the financial resources of the nation with regard to energy production and consumption. It is the free decisions of responsible persons in a free marketplace of goods, services and ideas, under reasonable and necessary regulations.
People, and thus companies, clearly want more environmental responsibility. They also want cost-effective solutions, instead of decisions made on the basis of how effective lobbyists are or how many campaign dollars come into political campaigns. Americans know how to find the greatest “bang for the buck.”
Federal energy policy should focus on liberating American ingenuity. It should not be in the business of picking winners and losers, tilting like Don Quixote at windmills that our legislators imagine are evil fossil-fuel-breathing dragons – or mandating and subsidizing gargantuan windmills that generate expensive electricity only 30% of the time.
When people are allowed to make free choices, “We the People” will show ourselves to be like the wise woman of Proverbs 31:18, who “sees that her trading is profitable, and her lamp does not go out at night.”
Benjamin B. Phillips is an assistant professor of systematic theology at Southwestern Baptist Theological Seminary’s Houston Campus and a research fellow of the Cornwall Alliance for the Stewardship of Creation, a national network of clergy, scientists, economists, and other experts committed to helping the poor and caring for the environment.
See Europe’s Ill Wind here.