Green Welfare, Green Taxes, Green Poverty
This column by ACRU General Counsel and Senior Fellow for the Carleson Center for Public Policy (CCPP) Peter Ferrara was published June 13, 2012 on The American Spectator website.
What would you do if gangs of robbers roamed your neighborhood at night, breaking into your neighbors’ houses and stealing their family jewels and life savings? You would arm yourself, and your family members of sufficient age, to defend your property. Or you would move to a safer neighborhood.
But if the robbers formed gangs called Greenpeace, the Sierra Club, or the Natural Resources Defense Fund, and assaulted your standard of living, the Che Guevara Democrats expect you to greet them with open arms, and gleefully turn over bushels of your cash, until your life savings is gone, and your standard of living has been reduced to the level of Argentina.
That third world destination is where Obama’s “green energy” economic strategy is taking America, all while he tells us sweet fairy tales about how this path is the road to 21st century prosperity.
Fancy political propaganda has us thinking that renewable, alternative fuels are the modern energy sources of the future. But just the opposite is true. Robert Bryce explains in his book Power Hungry: The Myths of “Green” Energy and the Real Fuels of the Future:
For millennia, humans relied almost completely on renewable energy. Solar energy provided the forage needed for animals, which could then be used to provide food, transportation, and mechanical power. Traveling…was made possible by the wind, human muscle, or animal muscle. And though today’s wind turbines are viewed as the latest in technological achievement, land-based systems that captured the power of the wind have been recorded through much of human history.
Indeed, the classic vision of the settlements of the Old West in America involves a decaying, wooden, windmill. Bry
ce continues, “The use of hydropower likewise goes way back. The ancient Greeks used waterwheels; so did the Romans, who recorded the use of waterwheels in the first century B.C. The use of mechanical power from water continued to the beginning of the Industrial Revolution.”
Moreover, “For 265 years after the Pilgrims founded the Plymouth Colony, and for 109 years after the signing of the Declaration of Independence, wood was the dominant source of energy in America.” Coal surpassed wood in 1885. Oil surpassed coal in 1950. Natural gas is undergoing a resurgence today.
The world changed from wind, solar, and biomass to oil, coal, natural gas and nuclear for good reasons of physics and math. First and foremost are the concepts of energy density and power density. The hydrocarbons and nuclear pack a massively more concentrated punch. The power of solar and wind are very broadly diffused throughout the atmosphere, so more than herculean efforts are needed to collect and concentrate it in usable forms. Hence we see solar panels and several hundred foot wind turbines spread out over square miles, and it still doesn’t add up to much.
The South Texas Project nuclear plant produces 300 horsepower per acre of land used, about the same as natural gas, with oil close behind. Wind power produces 6.4 horsepower per acre, solar photovoltaic 36 hp per acre, biomass 2.1. Corn ethanol requires about 1,150 times as much land as nuclear to produce the same horsepower.
The Milford Wind Corridor is a 300-megawatt Utah wind project with 139 wind turbines covering 40 square miles. Manufacturing the concrete to build them used 14.3 million gallons of water in producing 44,344 cubic meters of concrete. That means “each megawatt of wind power capacity requires about 870 cubic meters of concrete and 460 tons of steel.” That’s 32 times as much concrete and 139 times as much steel as for a megawatt produced by natural gas.
The diffusion problem is greatly compounded by the high variability of wind and solar conditions for power production. Bryce writes,
“We want the ability to switch things on and off whenever we choose. That desire largely excludes wind and solar from being major players in our energy mix, because we can’t control the wind and the sun. Weather changes quickly. A passing thunderstorm or high pressure system can take wind and solar power systems from full output to zero output in a matter of minutes. The result: we cannot reliably get or deliver the power from those sources at the times when it is needed.”
Then there is the problem of storing wind and solar power: “Renewable energy has little value unless it becomes renewable power, meaning power that can be dispatched at specific times of our choosing….And despite decades of effort, we still have not found an economical way to store large quantities of the energy we get from the wind and the sun so that we can convert that energy into power when we want it.”
As a result, the Electric Reliability Council of Texas concluded that just “8.7% of the installed wind capability can be counted on as dependable capacity during the peak demand period” and “conventional generation must be available to provide the remaining capacity needed to meet forecast load and reserve requirements.” With conventional energy sources needed to back them up completely on short notice, wind and solar are really just vanity supply to make the wasteful rich feel good.
These are the reasons why the world changed, and its not going back. As Bryce explains, before the Industrial Revolution, “while solar, wind, and water power all provided critical quantities of useful energy, they were no match for coal, oil and natural gas. Hydrocarbons provided huge increases in power availability, allowing humans to go from diffused and geographically dispersed power sources to ones that were concentrated and free of specific geographic requirements. Hydrocarbons were cheap, could be transported, and most important, had greater energy density and power density. That increasing availability of power has allowed us to do ever-greater amounts of work in less time.” Hence the industrial revolution and modern prosperity, now spreading worldwide.
Energy, Economic Growth and Modern Prosperity
Across the globe, modern prosperity is perfectly correlated with the use of energy and electricity. Bryce writes, “[T]he simple, unavoidable truth is that using oil makes us rich. In fact, if oil didn’t exist, we’d have to invent it…. [A]s oil consumption increases, so does prosperity. And the correlation is so clear as to be undeniable.”
The OECD countries, basically the prosperous, developed countries of the West, generally produce about $25,000 to $30,000 GDP per capita, and use 14 to 16 barrels of oil per person a year. In 2008, U.S. per capita GDP was $48,100, while oil use was 23 barrels per capita. By contrast, the non-OECD countries produce $7,000 to $10,000 GDP per capita, and consume 3 to 5 barrels per person. The countries of Africa and Asia produce $2,000 to $4,000 in per capita GDP, and use 1 to 2 barrels per person.
That is no accident. As Bryce writes, “[T]hanks to its high energy density, oil is a nearly perfect fuel for use in all types of vehicles, from boats and planes to cars and motorcycles. Whether measured by weight or by volume, refined oil products provide more energy than practically any other commonly available substance, and they provide it in a form that’s easy to handle, relatively cheap, and relatively clean.” Moreover, oil is the only fuel that can power the modern engines of economic prosperity, the diesel engine and the jet turbine.
Besides oil, prosperity is fueled in the world today by electricity. And right now, that means coal, though the future may belong to natural gas and nuclear power. While only Canada among major countries has higher per capita electricity consumption than America, the 5 countries with the lowest electricity consumption are Gaza, Chad, Burundi, Central African Republic, and Rwanda.
You can see this in your own home. The American kitchen of three decades ago featured a refrigerator, stove, and toaster. But today, Bryce writes, that same kitchen will include as well, “a microwave oven, bread maker, coffeemaker, juicer, convection oven, dishwasher and food processor. And a few steps away, where there once was only a small black-and-white television, there is now a giant-screen TV, a DVD player, and digital video recorder, as well as a laptop computer and ink-jet printer. In 1980, the average U.S. household had just three consumer electronic products. Today, it has about twenty-five.”
Coal today produces 41 percent of the world’s electricity supply, followed by natural gas at 20 percent, hydropower (geologically limited) at 16 percent, and nuclear at 15 percent. Oil at 6 percent (old-fashioned for electricity production) is still 3 times “other” at 2 percent.
Every grown up outside of Greenpeace, the Natural Resources Defense Council, the Sierra Club, and the modern Che Guevara Democrat Party understands what this means. Bryce writes, “The world’s developing countries are using their coal for electricity generation, and that electricity is propelling economic growth around the world, particularly in rapidly developing countries such as China, Indonesia, and Malaysia. Between 1990 and 2008, electricity generation in those three countries jumped by more than 300 percent.” As a result, just the increase in world coal use from 2007 to 2008 produced 25 times as much energy as all the wind turbines and solar panels in America in 2008.
Indeed, Bryce shows that just one modern coal mine in Kentucky, the 35th largest in America, produces nearly as much energy as all wind and solar in the U.S. And the natural gas production from just one state, Oklahoma, produces well over 9 times as much energy as all U.S. wind and solar.
Bryce adds, “[I]f we want to help developing countries bring more people out of poverty, we need to help them increase the amount of electricity they generate and distribute.” And that means still more coal, as well as natural gas and nuclear power.
The Left’s flower power “renewables” such as wind, solar and biofuels are the energy sources of the Roman Empire, and they will produce the same living standards as the Roman Empire. Bryce shows the meager existence of those still stuck in the old ways: “The world’s most impoverished people have no choice but to cook their food and heat their homes with fuels that have low energy density, such as straw, dung, twigs, wood and leaves. They are denuding the landscape of biomass in their struggle to survive. But in doing so, they are also contributing to deforestation and to the production of airborne soot.” Using these outdated energy sources “often results in the living areas being filled with a variety of noxious pollutants, including soot particles, carbon monoxide, benzene, formaldehyde, and even dioxin.”
Byrce concludes, “More oil consumption among the world’s energy poor would help save the lives of hundreds of thousands of impoverished people every year who die premature deaths because of indoor air pollution caused by burning biomass.” Indeed, these are the reasons why “oil is greener than any of the alternative energy forms that might replace it. No matter whether the replacement is ethanol from corn, biomass–such as wood, straw, or dung–or biofuels…the conclusion is apparent. Oil (and if you can get it, natural gas) simply has no peers. Oil provides consumers with both high energy density and high power density… and the number of uses for it are essentially limitless.”
The Road to Hell: Paved with Green Intentions
The Bakken geologic formation in North Dakota has turned out to hold far, far more oil than the U.S. Geological Survey used to think, 25 times as much in fact, or 2400 percent more. That is trillions of barrels of oil, rivaling Saudi Arabia by itself. The result is that the official unemployment rate in North Dakota is 3.5 percent, with nearly 20,000 jobs paying $60,000 to $80,000 a year remaining unfilled for lack of sufficiently skilled applicants. Revenue from the booming growth is gushing into the North Dakota state government so fast that after 7 consecutive tax cuts, the state enjoys a rainy day fund of several billion dollars, even though the entire state budget is only $2 billion. Although North Dakota voters yesterday voted not to abolish property taxes, a permanent boost to its economy would occur if the state instead phased out state income taxes entirely, as enjoyed by Texas, Florida and 7 other states.
As Newt Gingrich said in a highly illuminating campaign speech, “But if North Dakota by itself has that much energy, how much do we think we have everywhere else? Turns out, we may have more oil in the United States today, given new science and technology, than we have actually pumped worldwide since 1870. We may, in fact, by one estimate have three times as much oil in the United States as there is in Saudi Arabia.” Or as there ever was in Saudi Arabia.
Added to Bakken is the Green River Formation, which is where Colorado, Utah and Wyoming come together. That is now estimated to also hold more recoverable oil than the rest of the world’s proven reserves combined, according to GAO 3 trillion barrels, at least half of which is recoverable according to the Rand Corporation. That is two times all the oil in the Middle East, enough by itself to cover all U.S. oil consumption for 200 years.
Then there is a parallel revolution in natural gas. We have long known there was a lot of natural gas in shale, but we did not know how to get it out. As recently as 2000, people thought we had seven years of natural gas supply left in the U.S. Investors began committing big funds to building facilities for importation of liquefied natural gas from the Middle East.
But then entrepreneurs began applying to shale rock formations the horizontal drilling techniques that had been developed for deep water ocean drilling, where the most had to be gotten out of one hole by drilling in every direction. Combine that with the long time technique of fracking, breaking up the shale rock with steam, water and sand (supposedly so scary to “environmentalists”) and the net result, Gingrich elaborates, is that
[W]e now have in shale tremendous amounts of natural gas that is recoverable. In one short decade, we went from 7 years of supply to over a hundred years of supply because science and technology had improved so much. Furthermore, instead of us importing liquefied natural gas from the Middle East, there is now serious talk that we’re going to build facilities in Houston…to ship liquefied natural gas to China.
But this is all just the beginning, because as Gingrich adds, “in places like the Marcellus Shale in Western Pennsylvania, in eastern Ohio, cutting down along the Appalachians, all the way out to Dallas, Texas, there is formation after formation after formation.”
What that means is what I reported last year in my book, America’s Ticking Bankruptcy Bomb. America has the resources to be the world’s number one oil producer, number one natural gas producer, number one coal producer, number one nuclear energy producer, even the number one alternative energy producer. And that all adds up to one truly enormous economic opportunity for America.
These revitalized, exploding energy industries themselves mean a booming economy, replicating North Dakota across the land. That means ultimately millions of high paying jobs just in the booming energy and related industries themselves. It means as well billions of dollars for landowners, farmers and others, who have these energy resources on their land.
And it means exploding tax revenues for our bankrupt governments as the revitalized energy industries earn soaring profits on which they will pay skyrocketing taxes. Indeed, the exploding royalties alone from the oil and gas boom over the next generation will be enough by themselves to pay off our entire national debt. This is why in the new prosperity America needs to elect free market conservatives so this cascading windfall won’t be wasted on still more runaway spending.
Moreover, plentiful, low cost energy means an economic boom more broadly. The resulting rapidly declining energy prices would be a powerful tax cut for the entire economy. That means in particular a revival of energy intensive manufacturing. It also means millions more jobs, higher wages, and still more tax revenue to balance the budget and pay off the national debt as America goes back to work.
Barack Obama tries to tell us that increased drilling will do nothing about high oil and gasoline prices. But notice that with the soaring supply of the shale gas boom, since 2008 natural gas prices have spiraled down by 90 percent. Declining energy prices mean lower prices for everything, which are further tax cuts for everybody boosting the economy even more.
But under Obama’s green energy watermelon policies, America does not get any of this. Instead the self-supporting, taxpaying, coal, oil and gas industries are phased out by the EPA. They are replaced by wind, solar and biofuels, entire industries surviving only because of corporate welfare, at the expense of taxpayers.
Because of the problems of diffuse and unreliable energy of these outdated sources as discussed above, these energy sources are inherently far more costly. Based on official U.S. government data, onshore wind is 2-3 times more costly than traditional fossil fuel sources, offshore wind 4-5 times more costly. Solar thermal energy is 5-6 times more costly, photovoltaic solar close to 10 times more expensive. The need for traditional energy back up online for when the wind doesn’t blow and the sun doesn’t shine adds still further to costs.
Just the opposite of what the market offers us, these higher energy prices are effectively another huge tax increase on the economy, killing still more jobs, raising unemployment, and inviting America still further into recession. The vast corporate welfare necessary to keep these alternative industries alive represents still another burden on the economy. Obama’s EPA cap and trade policies represent effectively trillions more in increased taxes, dragging the economy down further. Instead of a manufacturing renaissance for America with plentiful, low cost fossil fuels, Obama’s high cost energy policies mean further manufacturing decline for America.
The rhetoric of green jobs is just a PR slogan designed to trick the American people out of their traditional, world leading prosperity, which President Obama and his far left base considers immoral and unfair to the rest of the world. The reality has already been tried and failed in Europe, where studies show that green energy subsidies result in 2 to 9 jobs lost for every green job created. The reality is already in evidence in Great Britain, where brain dead devotion to windmills to power a modern economy has the nation on track for fuel poverty for half the nation, with more than 10 percent of their incomes consumed by high energy costs alone.
So the choice is clear for the American people this year. They can vote for the continued decline and fall of America with President Obama. Or they can vote for the revival of traditional raging American prosperity and the restoration of the American Dream, by sending Obama back to the fever swamps of the far left.