This excellent piece by Courtney over at the Stocksorbonds blog is a good read. I have personally over the years been a staunch advocate of letting supply and demand do their thing while were it is possible to grease the tracks a bit. It truly takes long term government mandated money to shape a nascent industry. I do not like that, because I understand human greed and stupidity far too well.
Yet when we point out flaws, the fact is, is that they are obvious and simply cannot last. As has been so well put, we will insist on trying every wrong way possible before we relent and do the right thing. Part of this is the limitation of human intelligence. A well thought out plan must be presented and sold to folks with the capacity to act as actuator. Being human they grasp the outline and charge off on the program with serious shrinkage. Most plans fail to survive the experience.
I have just told you about the potential for cattails. It truly requires a major planning program and the solicitation of private joint venture partners, to say nothing of a new land classification scheme. That is the minimum needed. Instead we will first get a serious of ill equipped adventures that may add to the knowledge but not speed the development of the industry very much. In the end, it will be a very important industry.
A classic example of industry and governments getting together was the development of the Canadian tar sands. The original investment was made in the late seventies and is only realizing its potential now. A mere human being cannot live to that time frame.
This article helps scope out the future size of the nuclear industry, which is now ramping up to dominate grid power all over the globe. It is about to become a dynamic industry again, with or without the
market. Recall that most countries are small and simply lack energy options. A reactor gives them national energy independence and US has shown them the value of that. France
Grid power is about to become very valuable because the electric car, with all its limitations is the current best option for private urban transportation. We have much better batteries, and obviously the manufacturers are producing high voltage systems with the necessary torque for performance. Those two little tricks can produce a perky little golf cart weight vehicle that screams about town.
Mass production is about to kick in to produce an inexpensive electric car that will surely beat out a bicycle so beloved by the purists. As Courtney points out,
is cranking out millions of electric scooters. We are a little more spoiled. China
It would not be astonishing if over the next decade, we see an almost complete shift over to personal electric transportation. This is very bullish, but it is naturally cheaper to build out and obviously will be much cheaper to run. Right now it is only slightly inconvenient.
Re: THE PUZZLE IS ALMOST COMPLETE
There is nothing evil in the least about petitioning the government to do what is right. Doing so is one of the very basic freedoms offered to us by our constitution. Day after day pollution continues to kill. Something should be done. The problem is that politicians fall in love with power. They seek to tailor regulations in a way that will "earn" campaign contributions from the "winners". Politicians convert the goal of protecting the environment into the goal of producing campaign contributions. Politicians on the other side also win by not solving problems but by preventing solutions from being implemented.
We have made an awful lot of bad choices. Much of the damage from past bad choices can never be fixed. We can do better.
By mandating the use of ethanol and then subsidizing some of the richest people in the world to produce the stuff, we waste our time effort and energy and we create frustration, distrust, high prices for food and even starvation of poor people. Seventy percent of the farmers in
Government has gotten too big and the profit from lobbying has gotten out of hand. We can set up appropriate regulations without constantly robbing from Peter, enriching Paul and paying off politicians in the process.
Nuclear power gave us all a scare. It took about 25 years, but the fear has largely subsided. As a result, there are nuclear power deals being made daily. The big one was the agreement between
The total number of plants that will be built in the rest of the world will be greater than the number built in
Over the past 25 years, trillions of tones of coal have been burned because we have not been willing to drill for cleaner burning oil and because we have not been willing to build nuclear power. Billions of barrels of oil have been consumed because we have not drilled for cleaner burning natural gas. We could put every acre of land into production of ethanol and still hardly make a dent in our energy needs. The amount of resources needed to build enough wind mills would be incredible.
Drilling does much less environmental damage as other methods. With trillions of cubic meters of gas just a short distance off our coast lines, it makes no sense to damage the environment by tilling vast tracks of fertile land or dotting the countryside with noisy windmills made of steel and concrete.
The country has gotten into a group think mode that has resulted in the suspension of belief in the basic laws of supply and demand. Supposedly knowledgeable people are constantly saying things like the corn used in cars does not drive up the price of food because it is a different kind of corn than we eat. They say putting corn in cars does not effect the price of rice because most rice is grown in other countries. They say subsidies do not distort markets but makes them better. They even say that using double the amount of steel and concrete in a wind farm is not a consideration in comparing wind energy to nuclear energy.
Your point about the scaring of land and the damage to water resources is a good one. Yes, the total costs of mining and burning coal have not been factored into the cost of the energy produced. Determining the exact cost is impossible. A commission needs to be established to estimate externalities to the best of their ability with the support of the scientific community and the congress should only vote up or down. The externalities should be taxed and the revenues should go to eliminate taxes on earnings. We need incentives to produce less pollution and incentives to produce more work and investment.
Again, we do not want to take away our right to petition the government, but we want to reduce the necessity for it. Decade after decade the congress was unable to close extra military bases because representatives fought for local pork. Most everyone agreed there were too many bases but no one was willing to volunteer to have their base closed. A commission established which bases should be closed they were.
Right now, we use energy as a political football. Everyone has their own ideas about how to "fix the problem". The incentives to come up with good solutions are huge. If the externalities created by mining and burning coal were included in the price, we would burn less coal. However, I believe it will not be long before someone comes up with the best method for microbes to digest the coal and burp out clean burning methane gas. Thirty years ago, we grew 16 bushels of corn per acre. Today, we grow as much as 250 bushels of corn per acre; Monsanto projects that we will double yields in 5-7 years; 30 times the yield in 40 years! "Bugs" are already eating coal and oil and producing methane. A number of scientists have given us good reason to believe the natural process can be sped up many times, perhaps 10,000 times.
Once people realize that the natural process of producing energy is a renewable process, they will stop wasting so much time and effort on weak substitutes. Of course, improvements in batteries could change the dynamics of wind, solar, nuclear and other power solutions. The Chinese will buy upwards of 14 million electric scooters this year not to protect the environment but because the electric scooters cost less to make than the gasoline powered scooters. With about 30 nuclear power plants coming on line over the next 12 years,
Governments and capitalist are willing to gamble. There will be winners and losers but the consumer will ultimately win. History has shown that free markets generally make fewer mistakes when allocating resources than do governments. Free markets drive down prices, whereas governments frequently drive up prices. Government is needed to set up the least amount of rules as are necessary. We should trust the people to do the rest.