RALEIGH – If you want to understand some of the most challenging issues in debates about energy policy, I highly recommend reading The Bottomless Well by Peter Huber and Mark Mills. But if you’re looking for doom and gloom, you’ll be disappointed.
Huber, a regulatory analyst, and Mills, a physicist, take the reader on an excursion through the science and economics of energy production and consumption. Along the way, they take time to explore such matters as peak oil, alternative fuels, nuclear power, and energy efficiency. Much the book is devoted to articulating and advocating their “seven heresies”:
1. The cost of energy as we use it has less and less to do with the cost of fuel. The equipment and techniques used to refine, process, and employ the fuel in performing work are now far more important than the cost of harvesting and shipping the fuel.
2. “Waste” is virtuous – by which they mean not that technology fails to improve over time, but instead that dumping waste energy is necessary to produce the highly ordered power we truly want.
3. The more efficient our technology, the more energy we consume. This is one of the key insights of energy economics – if governments mandate efficiency gains, through the substitution of appliances or the increase of automotive fuel economy, the primary result won’t be to conserve energy supplies but instead to heighten customer demand for power to consume.
4. The competitive advantage in manufacturing is now swinging decisively back toward the United States. One of the most counterintuitive notions in the book, this is actually not all that controversial once you grasp the coming revolutions in power transmission and nuclear energy, just to name two.
5. Human demand for energy is insatiable. Lurking underneath many Green policy recommendations is a desire for human deprivation – to travel less, consume less, strive less, settle for less. It runs contrary to human nature, and to the noble idea that we ought to lift living standards in the rest of the world up to those in America, not drag Americans down.
6. The raw fuels are not running out. I’ve often been frustrated by seemingly sensible people who forecast that one day oil will just “run out,” for example. That’s thinking at, oh, the third-grade level. In the real world, companies that drill and sell oil have a huge incentive to pay attention to available reserves. As supplies get tight, consumers bid up the price and increase the incentive to explore new sources and produce more from existing sources. This process has recurred multiple times in the past 100 years, which is why “experts” have regularly embarrassed themselves since the 1880s predicting the imminent exhaustion of oil reserves. Sure, scarcity will eventually drive the production cost of oil above that of other fuels, inducing a change in consumer behavior. Any way you look at it, though, there will never come a day when oil wells simply give out and shock the world market.
7. America’s relentless pursuit of high-grade energy does not add chaos to the global environment, it restores order. On this point as on so many others, readers of The Bottomless Well would do well to refresh their memory about the laws of thermodynamics, as much of Huber and Mills’ discussion centers on them, particularly the second law and entropy. The authors talk extensively, for instance, about the reforestation of North America, made possible by the substitution of fossil fuels and other sources of power for land, labor, and animal power to produce food and other commodities.
Huber and Mills are hardly wedded to the status quo. They talk enthusiastically about a variety of emerging technologies to move automobiles with the electrical grid, generate power from nuclear fusion, install high-end solar cells on roofs and buildings, and convert emissions from coal-fired power plants into calcium bicarbonate, eliminating any risk of accentuating the greenhouse effect.
But neither are they alarmists or charitable to those whose energy policies are, for all intents and purposes, little more than exhortations for Americans to shiver in the dark. That’s not where we’re headed, as long as Washington and the states make rational choices and disregard special-interest pleading.
Hood is president of the John Locke Foundation.