Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

19 February 2012

The Big Lie about Wind and Solar Power


[For a brief comment on possible international trade in wind and solar energy, click here.]

Introduction
A Little Algebra
Comparing Coal
The Coal Industry’s Opposition to Subsidies
The Subsidiary Lie: Intermittency
Conclusion

Introduction

For about two years now, the so-called “mainstream” media have endlessly propagated a popular meme about wind and solar power. The meme is simple and powerful.

Wind and solar power, it says, are uneconomic. They can’t compete now with conventional means of generating electricity, such as coal. And maybe they never will. So forget about them and get back to the serious business of burning fossil fuels.

Many people believe this meme. But in fact there is no credible evidence to support it. There is none for a simple and powerful reason: the key variable—the working lifetime of large, commercial wind farms and solar arrays—is still unknown.

But that doesn’t stop the lie. It is undoubtedly the most successful weapon in the coal-industry’s public-relations assault on reason. It’s been even more successful than the myth of “clean coal.”

This essay debunks the lie analytically. Then it analyzes why many Americans, who have never abandoned any new technology without trying it first, are ready to do so with free power from the wind and sun.

A Little Algebra

The following formula states the cost of any form of electricity:

C = F + M + E +AC

Here C is the total cost of electricity, F is the cost of the fuel to generate it, M the cost of maintaining the plant that generates it, and E the cost of pollution and other “externalities” involved in generating it. AC stands for “amortized capital cost,” which we’ll explain in a moment.

F, M and E are all what economists call “variable” or “marginal” costs. They are easy to express in dollars per kilowatt-hour. It takes so much fuel (such as coal) to generate a kilowatt-hour and so much maintenance to keep the plant running meanwhile. Each kilowatt-hour’s worth of burning fossil fuels fills the air with so much carbon dioxide (which causes climate change), sulfur dioxide (which causes acid rain) and organic mercury compounds (which poison seas and fish). E is the cost of preventing or remediating those harms, per kilowatt-hour of fuel burned and consequent pollution produced.

AC is the amortized capital cost of the plant. That sounds complicated, but it’s really not. In order to calculate the full cost of generating electric power, you have to include the cost of building the plant that makes it. Economists call this a “fixed cost” because, once the plant is built, that cost is sunk and done.

In order to calculate the amount the plant’s cost adds to the cost of power per kilowatt-hour, you have to know how many kilowatt-hours the plant will generate over its entire useful life. Then you simply divide the cost of building the plant by the total number of kilowatt-hours the plant is expected to provide.

The result is just a lifetime average. But accountants and economists use the term “amortized cost,” so that’s what we’ll call it.

With this formula in hand, we can now explore why today’s cost comparisons between coal and renewables are based on nothing more than wild guesses about amortized capital costs and/or ignoring externalities.

Comparing Coal

The foregoing formula works for any form of energy, from hydrogen fusion to rats spinning treadmills (to run generators) in a cage. The problem is not the formula or the theory. It’s practice.

High-priced lawyers in Gucci shoes spend whole careers arguing about each of the formula’s variables (F, M, E and AC) in “rate-making” proceedings, where regulators set the fees that public utilities can legally charge to produce our electricity. So it’s not as if you can look these numbers up (on the Web or anywhere else) and just plug them in. You have to know what you’re doing and watch the sleight of hand.

To make our analysis simple, let’s just compare one other source of electricity, coal, with wind and sun. That’s fair, because the coal industry is ultimately responsible for the popular meme that wind and sun are uneconomic.

We won’t get into actual numbers because (1) they vary from plant to plant, region to region and technology to technology and (2) they’re hard to find. Instead we’ll content ourselves with rough quantitive comparisons that derive from the nature of the different technologies.

    Fuel Cost: Wind and Solar Power Have None
We start with F, the cost of fuel. For coal-fired power plants, it’s the cost of coal needed to generate a kilowatt-hour of electricity.

But for both wind and solar power, there is no fuel. The wind and sun are free. (That’s their key advantage over all competitive means of generating electricity, including nuclear power.)

So for renewables, F drops out, and the formula becomes

C = M + E + AC

    Maintenance Cost: Harder to Know, but Coal Probably Loses
Next is maintenance cost, M. Coal plants must maintain a huge mechanical apparatus that: (1) conveys the coal to the burning spot, (2) pulverizes or atomizes it and otherwise prepares it for burning, (3) burns it in the furnace to heat gases or water, (4) uses that heated medium to turn an internal combustion engine or turbine, (5) and uses that mechanical motion to drive a mechanical generator, which spins rapidly at high torque to generate electricity. All these systems require periodic maintenance and occasional repair.

For renewables, the precise type of plant makes a difference. Solar thermal arrays concentrate the sun’s heat directly into a heat engine (or a liquid or gaseous medium that drives it), eliminating steps (1) through (3). Steps (4) and (5) are similar to those for coal power.

Windmills eliminate even more of the steps. The wind drives the mechanical electric generators directly, usually through a gearbox. About the only things that need repair are the bearings and mechanisms for the windmill (and those that keep the windmill pointed into the wind), the gearbox for the generator, and the generator itself. So, as compared to coal, windmills eliminate all the steps but (5).

Solar photovoltaic arrays require the least maintenance, because the solar cells that actually make the electricity have no moving parts. The only moving parts in a solar photovoltaic array are the systems that—very slowly!—keep the solar cells facing the sun as it moves across the sky during the day.

You don’t have to be an engineer or energy economist to understand that the maintenance costs for these four forms of generation (coal, solar thermal, windmills, and solar voltaic) will rank in the order listed. The reason: the coal plant’s systems are far more complex, involve more steps, and operate in part (the coal furnace and boiler, for example) at higher temperatures.

There is yet one more reason why coal loses to the sun and wind in terms of maintenance cost, and it’s a clincher. All those smokestack “scrubbers,” which regulators require coal plants to run in order to reduce acid rain and other pollution, have expensive active absorbing elements that must be replaced periodically. Because the cost of replacing them is a routine part of maintaining the plant in legal operation, it is properly charged to maintenance, not the cost of externalities discussed below. Yet as we shall see, those external costs are far greater for coal than for renewables.

    External Cost: Coal Loses Big
Next is the variable E, externalities. Coal produces much more than wind or sun because power from the wind and sun produce no effluent, no pollution at all.

Some effluent arises in the process of manufacturing the plants, but the same is true of coal. And anyway it’s easier to consider that effluent as part of AC, the amortized capital cost of the plant. It only occurs once, and so is properly considered part of fixed costs, while a coal plant produces new effluent every day it runs.

It doesn’t take a genius or an engineer to understand that E is much larger for coal than for any wind or solar plant. Coal’s external costs are huge. I’ve discussed their many and various sources in another post, which I won’t repeat here. They are both very high and very hard to estimate precisely, because (in the case of climate change, acid rain and mercury pollution) they affect large geographic regions or the whole Earth.

But in accordance with the Basic Law of Economics (there’s no such thing as a free lunch), someone has to pay for them, either in dollars, reduced health, or reduced quality of life, or (in the case of the Maldives) maybe even a loss of homeland. So far, the coal industry has gotten away with forcing the rest of society to pick up (and breathe!) its garbage. But that doesn’t mean that policy makers can ignore its real costs, or that investors can ignore the risk that eventually those costs will be charged where they belong.

The coal industry’s highly-paid lawyers and lobbyists have striven mightily to find some sort of compensating external cost on the ledgers of wind and solar power. Because neither form of alternative energy produces any effluent whatsoever in normal operation, the most they have been able to devise is a claim that windmills kill birds.

Yet careful analysis shows that rate of bird kills caused by windmills is at least an order of magnitude lower than caused by the widespread use of cars and trucks. And engineers can avoid most of it by siting wind farms away from birds’s migratory paths, which are stable and predictable. The attempt to compare a tiny amount of avicide with regional acid rain, massive poisoning of lakes, seas and fish and global climate change is laughable. Has anyone calculated the number of birds that climate change will kill, or the number of whole bird species that it will extinguish?

    Amortized Capital Cost: The Key Unknown
So far, coal loses hands down. Unlike coal, wind and solar have no fuel cost. Their maintenance expense promises to be lower than coal’s, and their external costs are much lower than coal’s. So the cost comparison boils down to the last term: amortized cost of capital.

But here’s the rub. AC itself consists of two variables, the actual cost of the plant (which you can get from the accountants, if it’s already built), and the plant’s expected lifetime, in kilowatt-hours generated. Here’s the formula:

AC = P/L,


where P is the total cost of building the plant, and L its useful lifetime, expressed in kilowatt-hours.

Renewables’ detractors would have you believe that these variables are well known. But they’re not.

Even the total cost of the plant is unknown. Why? Because wind and solar technology are still in their rapid development phase.

Already there have been three generations of windmills. Large-scale solar arrays, both thermal and photovoltaic, have just started to be built. Although some are at commercial scale (especially in Germany and China), no one knows how much they’ll cost in real mass production. The whole industry is just beginning to hit the exponential part of its growth phase.

If the plant’s cost is still unknown, think about its lifetime. For wind and solar plants, no one has any real idea what it will be.

We do know that many nuclear power plants—which have infinitely more numerous, complicated and critical systems—are still in use forty years after their construction. Wind and solar power plants have far fewer moving parts, need far less complex instrumentation, and operate at much lower temperatures and without radiation, which can damage materials as well as living organisms. So it is not inconceivable that solar power plants, if not windmills, could operate for a century or more with proper maintenance.

No one knows. Why? Because large-scale wind arrays have existed for less than a decade, and large-scale solar-power plants have existed for only a few years.

How important is this plant-life variable in estimating electricity costs? Consider this example. Suppose my guesstimate above is right, and that a photovoltaic solar plant could produce power for 100 years with proper maintenance. Then suppose you’re a coal-company PR hack trying to estimate the lifetime of a competitive plant that will take away part of your business. You might say, “Well, nuclear plants last forty years, but they’ve got a long history of operation, and solar plants are new. So we’ll take half that for our guesstimate, which seems reasonable to me.“

Your twenty-year plant-life estimate would be off by a factor of five. Because the plant-life appears in the denominator of the cost equation, your estimate of the amortized capital cost of solar power would be five times too high. And because the amortized capital cost (AC) is by far the dominant term for renewables, so would your estimate of solar electricity cost.

Of course these numbers are hypothetical. But that’s precisely the point. In the absence of real, reliable data, the coal barons, their PR hacks, or anyone else can “derive” cost-comparison numbers to reach any desired result. The numbers are meaningless because real data to compute them don’t yet exist. Garbage in, garbage out.

For determining things like plant lifetimes and mean times between failures, theory and projections are practically useless. Experience is the only true guide. That’s why the FAA keeps exhaustive track of every critical part of every airplane. And that’s why you buy cars with a warranty.

We simply don’t yet have the experience with wind and solar power to accurately fix their plant lifetimes and therefore their cost of power. And this truth holds regardless of how much coal advocates ignore the very real—and also hard to estimate—external costs of burning coal.

So when coal advocates tell you wind and sun are uneconomic, they are doing one or more of the following: (1) making their numbers up, (2) making wild guesses as to competitive plants’ lifetimes, for which there are no real data yet, or (3) ignoring the gargantuan external cost of burning coal.

Good data for cost comparison will come in time. But for three reasons their precise determination may take decades. First, wind and solar power plants should last at least as long as first-generation nuclear plants, i.e., forty years, because they are far less complicated and involve less exotic materials and technology. So we will have to wait at least forty years to gain real experience with fully-depreciated renewable-energy arrays.

Second, wind and solar plants are still under rapid development. Their technology and its durability and longevity are moving targets. So estimates of plant lifetimes with today’s technology are useless for future plants.

Finally, wind and solar power plants are far less dangerous than nuclear technology and even coal. Therefore their siting and construction incur less political opposition and take less time. So we can expect far more rapid progress in wind and solar plants in general, and in particular in plant longevity, than in any other field of power generation. (In comparison, fear of nuclear power after the meltdown at Three Mile Island has precluded any new US nuclear plants for over thirty years, although at least two are now on the drawing boards.)

Some day we will have the data to compare the full cost of coal, wind and solar power. We don’t now. The numbers that you see today (if you see numbers at all, not just unfounded qualitative claims) have no solid basis. They can’t have, because the sole factor that might favor coal—amortized capital cost—is based on nothing more than unfounded guesses.

The Coal Industry’s Opposition to Subsidies

When you think about it, the coal industry’s public-relations assault on renewable energy seems extraordinary. When else in American history has one industry tried to strangle another in its crib not through competition in the marketplace, but through advertising and public relations?

I can’t think of another example. The closest analogy is the battle between railroad and trucking for the freight market during the last century. That contest produced a lot of jockeying in state regulatory bodies, which in turn produced some interesting antitrust decisions in our federal courts (holding that lobbying is protected by the First Amendment). But never, to my knowledge, has one industry tried to influence the public (including investors) about future prices of its competitors by lobbying and public relations, rather than by real sales or advertising to real customers.

That fact alone ought to tell us something. If the coal industry were really confident of its numbers, why would it try so hard to influence the public and legislators? Why not just let wind and solar entrepreneurs try and fail? After a few expensive failures, customers and capital for wind and solar power would dry up, and the threat of competition against the coal industry would disappear.

Could it be that the coal barons don’t want the experiments to run because their own secret analyses suggest that the sun and wind will win?

Of course there is the issue of subsidies. No one likes to see one’s competitors get a hand up from government.

But every energy industry has enjoyed government subsidies. Energy is part of our national industrial infrastructure and a legitimate object of government help.

The fossil fuel industries themselves have enjoyed enormous subsidies, in the form of land grants (or sweetheart leases) and tax breaks. These indirect subsidies were highest in the last century. But there are still sweet leasing deals (especially offshore) and tax relief in the form of depletion allowances.

The nuclear industry enjoys vast, largely hidden subsidies today. The most important is a legislative limitation on liability for accidents. That indirect subsidy not only lowers insurance costs but also makes private insurance possible. Another indirect subsidy is the loan guarantees for massive capital costs that even now are making new nuclear plants possible in the South.

Why should wind and solar be any different? Because they are less dangerous and involve less exotic technologies? But shouldn’t that argument work the other way? Shouldn’t government bet heavily on something less exotic and less dangerous, which involves no cost for fuel at all, no noxious effluent, and no risk of fuel ever running out?

With present information, we just can’t know whether the coal barons might be right. But, to the extent useful, present data actually suggest the opposite: when fully and rationally costed, coal appears the loser, not the wind and sun. So when coal barons object to the government picking losers as winners, they ought to be objecting to the very subsidies and preferences that they themselves still enjoy.

The Subsidiary Lie: Intermittency

The absence of reliable data on cost comparison raises an important question. Why is anyone paying any attention to the coal industry’s propaganda even before competitive plants are built?

The answer involves a second lie about renewables: intermittency. The lie isn’t the fact of intermittency. That’s true. The wind doesn’t blow all the time, and the sun doesn’t shine at night or when clouds intervene. The lie is that these obvious facts preclude practical or economical use of wind and solar power.

Before discussing solutions, I should note one peculiar aspect of the intermittency issue. How you think about the sun’s and wind’s intermittency depends on where you live.

I laughed out loud when one of my commenters [scroll to comments] linked to a screed entitled “Atomic Insights: Wind & solar are not ‘intermittent’; they are unreliable, unpredictable, uncontrollable and worthless.” That commenter lives in England, and I suppose the screed’s author does, too.

I spent most of a year in England (Cambridge) on fellowship in 1971-72. If I had lived there most of my life, I might feel the same way. I still remember coming outside in my T-shirt on a frigid March day (along with other students) to enjoy the sun’s rare cameo appearance through scattered clouds.

But now I live most of the year in the American Southwest. The wind blows so hard and so much in my mountain valley that it’s a nuisance. And the sun shines almost every day, so much so that, although a sun lover, I look forward to the rare overcast or rainy day, just for variety.

There are many different climate zones on Earth, and their normal weather varies enormously. Some are sunny and windy. Some, like the rain belt from Seattle through Akron, Ohio, and most of England and Germany, are not. Yet Germany is investing in windmills and solar panels for use in places that have wind and sun.

People who live in climates like England’s (or in cloistered Manhattan) are just going to have to trust the geographers and engineers and understand that the whole Earth is not like their homes. There are huge regions of Earth, including the American Southwest and most of the interior of Australia, where the absence of both sun (during the day) and wind are extremely rare occurrences.

By and large, those places are also places where land is empty and cheap—where the sole inhabitants are brush and cattle, which don’t vote and don’t know what “NIMBY” means. They are where large wind and solar arrays will be built.

Anyone who doubts that these places exist should spend a couple of weeks in West Texas and New Mexico, or fly over the Australian interior. They are among the places where competent engineers will build massive wind and solar arrays, and are doing so right now. Other good sites include the tropics, where the sun shines most of the time, and so-called “trade” winds blow continuously, year round.

As for practical solutions to intermittency, there are three good ones right now. The first is tying wind and solar generators together in a large regional or national grid.

Wind and sun can die temporarily in many local places, but there are seldom times when both disappear for long periods over a large region, let alone the whole US. Designing power grids to average intermittent wind and sun over a large region can smooth out microclimates and make the grid system as a whole quite reliable.

The second solution to intermittency is longer term. High-power lithium battery packs, like those being marketed right now in the Chevy Volt and Nissan Leaf, can supply the average household’s needs, apart from space heating, for several days. Spreading them around and connecting them in a smart grid would take some time, some capital investment, and perhaps some cultural changes in households. But, in the end, electric power would be more widely distributed, and therefore more robust and less prone to disruption. Consumers might never again lose a refrigerator full of spoiled food to power outages.

But the third solution, which is already in operation, is the clincher: the coal industry itself. Over half of all electricity in our nation comes from coal. So until wind and solar power reach that level—half of all our electric power—the easiest way to accommodate their intermittency is to dial coal plants up and down to take up the slack. Doing so would not only reduce the enormous external costs of burning coal; if my suspicions about comparative costs are right, it would also reduce the cost of power.

The coal industry says it can’t dial plants up and down that fast. But that’s nonsense, at least with a smart regional or national grid. Weather.com predicts both sunshine and wind speed and direction ten days out for every hamlet and weather station in the United States. Surely a well-designed computer system, using the same underlying weather data, could predict total wind and solar power over a local, regional or national grid far enough in advanced to dial coal plants up and down.

The real reason the coal barons and utilities object is that they just don’t want to do it. They don’t want their ancient (and nearly obsolete) industry playing second fiddle to the wind and sun, supplementing the power that comes from free but intermittent sources to make it more reliable.

When that happens, every kilowatt-hour of electricity from the wind and sun will directly replace a kilowatt-hour derived from burning coal, thereby reducing the coal barons’ sales. And they (or the government) will have to invest in more predictive and grid technology, with no direct return, in order to help the process run smoothly. They are being asked to finance their own obsolescence; so naturally they object.

The coal barons have every rational and selfish reason to resist these trends, whether or not progress ultimately reduces the cost of power to consumers, as well as acid rain, mercury poisoning and climate change. (Might some financial incentives reduce their understandable source of opposition?) And the barons are indeed resisting mightily, with all the considerable means at their disposal. The question is whether policy makers wish to put their well-being above that of public, the nation and the Earth, and whether investors wish to ignore a better mousetrap just to protect them.

Conclusion

In our heyday, we Americans weren’t a nation of naysayers. We laughed at people who said things couldn’t be done. And we certainly didn’t argue or decide, in the abstract, that something couldn’t be done before even trying it.

That’s, in essence, what the coal barons want us to do. For the last two years, they have mounted an extraordinary (and extraordinarily expensive) public-relations and lobbying campaign, which has enjoyed considerable success. They have convinced a significant part of the public, investors and politicians that wind and solar power are intrinsic losers—even before we give them a fair trial—so they shouldn’t receive the very same start-up support that every other form of energy in our nation’s history has had.

The coal barons don’t have the data, but they have lots of money. So they persist in trying to persuade business, investors and the American public not even to try wind or solar power on any large commercial scale.

T. Boone Pickens, for one, isn’t listening. The old oil buccaneer is hardly an environmentalist, visionary or tree-hugger. Yet as early as four years ago, he wanted to invest a trillion dollars in wind farms in Texas. “I have the same feelings about wind,” he said, “as I had about the best oil field I ever found.”

Why? Because the wind is free. Like the sun, it needn’t be dug up or drilled for, let alone refined and transported to its place of use. Once you build the power lines, electrons transport themselves, for free. And, unlike the sun, the wind often runs at night.

The octogenarian Pickens can see past the long shadows of coal-industry propaganda to the lights that can shine forever, without burning geologically limited fossil fuels, and without polluting our Home. He can even foresee the day when we have real data and will know the cost advantages of fuel-free power. When will the rest of us wise up?

Possible International “Trade” in Wind and Solar Power

Wind and sun are unevenly distributed over the Earth. Some places, like England and Germany, have little sun and not too much wind. Some places, like West Texas and New Mexico, or the tropics with their “trade winds,” have lots of both. Some places, like the central “Outback” of Australia, have such reliable sun and such rare freezing as to make them ideal for solar thermal and photovoltaic arrays, if not windmills.

So is there a way to deliver wind and solar power from places that have lots of wind and/or sun to places that don’t?

If the places of generation and receipt are close together, one answer is obvious. Normal power lines can “transport” electricity from the wind and sun from one place to another. Once the power lines have been built, the transportation itself is costless, except for maintenance, because electrons “transport” themselves with Coulomb forces.

If the places that rely on transported energy also rely heavily on coal for electric power—as nearly every nation on Earth but France does now—the renewable power can reduce the use of coal, with its enormous external costs, and perhaps even lower the price of electricity. Once the level of renewable power exceeds the level of coal-power generation, however, there must be some means to transmit and store the renewable power reliably.

The question is perhaps most acute for Australia. It’s huge interior has enough empty space and sun to power the whole of human civilization many times over. But how to get power from isolated Australia to the rest of the world? Laying undersea power power cables would be difficult and expensive, even to nearby places like New Zealand and New Caledonia.

There is, however, another method for both transport and storage of renewable energy. The very same method works for both.

Electric power can electrolyze water into its atomic components, hydrogen and oxygen. We can then store those components for later use in internal combustion engines or turbines to generate electricity, with virtually no harmful effluent. (The only product of burning hydrogen in oxygen is water.)

Since oxygen exists everywhere in the Earth’s atmosphere, you don’t need to transport it. You can save the pure oxygen resulting from wind- or sun-driven electrolysis for local medical and industrial use. All you need to transport is the hydrogen, which stores the energy.

Hydrogen is lighter and more dangerous than natural gas and is harder to condense into a liquid. But we already have intercontinental transport of liquified natural gas (LNG) in special container ships. Plans are now on the drawing boards to do much more of that. We could do the very same thing with liquified or compressed hydrogen.

Ships for that purpose are hardly and off-the-shelf technology, but transports for LNG are. There is no reason in theory why we we could not build similar ships to transport liquified hydrogen, or hydrogen in the form of compressed gas.

The crux of the matter is that, where they exist, wind and solar energy are practically limitless. If you need more power from them, you just build bigger arrays.

Since wind and sun themselves are free and produce no effluent, the cost of doing so depends on the cost of building and maintaining the necessary equipment. As discussed above, maintenance is a variable or marginal cost. The cost of building the plant is a fixed cost, which must be amortized over its useful lifetime (expressed in energy generated) to determine the resulting cost of energy.

So it should be possible for countries and regions with lots of sun and wind to transport the energy from those sources to other countries with less, in the form of liquified or compressed hydrogen. Because hydrogen burns cleanly and electrolysis powered by the sun or wind produces no effluent or pollution, the entire process of power generation, transport and use would be free of pollution and would not contribute to the Earth’s carbon load that we believe is even now causing climate change. We could use part of the hydrogen that a ship transports to power the ship itself, including its electrical generators.

At the moment, all this is theory. But LNG is already an object of international trade, with a lot more planned. Those facts suggest that this vision could become real, without great leaps in technology or increases in cost.

If so, international “trade” in energy, in the form of liquified or compressed hydrogen gas, could allow energy from the wind and sun to power the whole world, without intermittency. For the tropics, that trade might even supersede trade in tropical fruit, sugar, rum and tobacco, putting the sun-drenched South more on an industrial par with the North.

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4 Comments:

  • At Mon Feb 20, 03:59:00 PM EST, Anonymous Jason said…

    Great post Jay, very educational. I agree with all of it.

    What does the world of academic economists have to say about all this? I would guess they might be more sympathetic to coal than you are, and I wonder how much that facilitates the industry's deception. I don't know much about economics, but I did see a recent talk by an economist (Doug Reynolds) at my university who is writing a book (Energy Civilization) which apparently makes an economic case for drilling ANWR. Despite the fact that I'm open to his position (as an ecologist and environmentalist, no less -- it's complicated) I was taken aback by the shoddy arguments he used. He made a series of poor arguments including a false equivalency between desert and arctic biodiversity loss potential, erosion and flash flooding from runoff from solar arrays, and the most outrageous argument, "Think what we could for the rainforests with the trillion dollars sitting in the ground right now in oil," as though that's exactly where the profits were all headed. I could have made a better case for his position than he did, and I'm undecided on it.

    I know this sort of sloppy work is very common, maybe even standard, in some academic fields, like psychology. Do you know if it's like that in economics, too? I suppose that would explain many of our problems. And I wonder if reforming academia, despite its stubbornness, might be easier than (and a good stepping stone to) reforming the rest of our corporate/government structure and the public opinion it can buy so easily.

     
  • At Tue Feb 21, 09:06:00 PM EST, Anonymous Anonymous said…

    Jay, this is so very well written and more concise than usual, that my son a third grader can understand your reasoning. I have printed it out and begun reading it Ben. I'm also trying to discuss your skills at persuasive argument using facts, math and policy and trying to answer/discuss all the questions that he brings up while we explore this blog together.

    I especially like the "A little Algebra" section even if in my mind this is hardly much algebra, it still brings up many great ideas and real tangible thoughts on how to quantitatively put a cost or value on something.

    Best Regards, RH.

     
  • At Fri Feb 24, 02:09:00 PM EST, Blogger jay said…

    Dear Jason,

    Welcome back! I’m glad my last (somewhat critical) reply didn’t drive you away.

    You ask some really good questions. I looked up Doug Reynolds on Google, and I think I got the right one. He does indeed appear to be an economist; at least he’s got an economics Ph.D. from the University of New Mexico. He teaches “oil and energy economics” at the University of Alaska Fairbanks.

    But there’s the rub. His title states his major predisposition (oil). Maybe the University hired him because of earlier expressions of support for that industry. And imagine the social pressure he’s under in your small and closely-knit state. If my state had a negative “income tax,” under which virtually every citizen gets a subsidy payment from oil and gas royalties, I’d probably favor more drilling, too!

    As for your more general question, I just don’t know. Because I’m only an amateur economist, I’m not up with the academic literature.

    My general impression, however, is that the kinds of questions Reynolds and I deal with are too practical and mundane for economists at leading universities. No one is ever going to win a Nobel Prize for proving that the coal industry’s PR hacks don’t have the faintest idea what they’re talking about.

    So that leaves adult supervision of energy policy to captive industry economists and those at smaller universities like yours. The Sierra Club and EDF also may have some economists on staff. I hope so.

    But it’s not as if the nation’s leading economic minds are looking at energy policy on a daily basis. They aren’t.

    Frankly, I’ve been quite surprised at the progress I’ve been able to make with data I can find on the Web and my own limited knowledge of economics. My Ph.D. is in physics, not economics. I learned most of what I know about economics absorbing and teaching antitrust and competition law (which uses a lot of economics), writing my treatises on those and related subjects and reading the business press. The fact that I can reach what I think are accurate and useful conclusions (which I haven’t seen anywhere else!) using only those sources of information and knowledge tells you a lot about the state of energy economics in our country.

    As a blogger, I do think my three careers (science/engineering, law and law teaching) give me a certain advantage. I went into law primarily to make more money, but I still think like an engineer—the more so as I age. I like to figure out how things work and how to make them work better, whether they be vehicles, markets, social systems, or nations.

    But having had a long career in law, I understand how the “advocacy” professions—law, politics, public relations and advertising—can drift pretty far from those goals. Taking a predetermined position and supporting it against all opposition—which is what the advocacy professions do—is not the best way to make things work.

    That’s one reason I retired from law teaching earlier than most of my colleagues. I think we have far too many advocates in far too commanding positions, and not nearly enough scientists and engineers, including practical economists.

    So, as I reach the age when I'm beginning to contemplate nursing homes, I try to do what I can to restore the balance in favor of people who make things work.

    Best,

    Jay

    P.S. As one of my more faithful readers, you may have noticed that my position has shifted a bit recently, away from zealous advocacy for electric cars and more toward natural gas as an interim fuel offering lower prices, less climate change, less pollution and greater energy independence than gasoline.

    Why the change? Because natural gas and cars that use it are here now, while electric cars will take time to build critical mass and infrastructure.

    That’s what engineers do that advocates don’t. They refine their views and even change their minds with new data. So does our President, thank God!

     
  • At Fri Feb 24, 02:44:00 PM EST, Blogger jay said…

    Dear R.H.,

    Thanks much for the compliments, and even more for your gentle, diplomatic hint about this post being “more concise than usual.”

    My wife is less diplomatic but also effective in pushing me to be less long-winded. I’m trying.

    That said, I must confess considerable frustration with our present Twitter culture. If something doesn’t fit on a bumper sticker today, it doesn’t get much press.

    My whole life experience (in three careers) has been to the contrary. Nothing useful has ever come to me (or seemed worthwhile if done by others) without hard work and careful reasoning. And I've often found even correct conclusions worthless without the underlying reasons. If the facts change—as things tend to do in our rapidly moving world—you can’t figure our whether or how to change the conclusions without the underlying reasoning.

    So, over time, I’ve lapsed into two-mode blogging. Sometimes I spend a lot of time on analysis and reasoning, producing posts that are more like academic analyses than the “diatribes” this blog’s title promises. My next post after this one, which deals with short-term energy issues, is like that. For other examples, see the following: 1, 2, 3, 4, and 5.

    But then I try to write shorter, punchier essays to summarize my conclusions and reasoning, as best I can, for people who’s attention spans don’t fit those essays. I’m happy that you see this post as a reasonable compromise, but I’m also conscious that you know more math than 99.9 % of Americans.

    Anyway, your young son’s ability to understand and assimilate the basic logic of this post gives me hope. If he can absorb basic arithmetic and common sense, then maybe eventually our politicians and industrialists can, too.

    Wind and solar power are really as good as Pickens thinks. Build and maintain the systems, and the power is free, forever!

    Some day our species will make that dream a reality and will live in a better, brighter and less polluted world. Maybe your son can help.

    Best,

    Jay

     

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