RALEIGH – It is said that “theory may raise your hopes but practice raises your income.” When it comes to so-called alternative energy, some of the theorists have managed to raise their incomes – but only by using political power to rip off taxpayers and ratepayers.
The theory behind the alternative-energy movement is that a combination of energy conservation, wind, solar, and other “green” technologies can quickly, reliably, and economically reduce consumption of fossil fuels.
Little of this makes any practical sense. Households and businesses already have a strong incentive to conserve – the price of energy. If they deem the costs of specific conservation projects as higher than the expected benefits, no government regulation can change the basic math involved. For large-scale conservation to occur, energy prices will have to rise and stay high for a long time. That’s not something that conservation advocates like to admit.
As for the energy alternatives themselves, expectations of their practicality range from fanciful to ludicrous. Even huge increases in solar and wind generation, for example, would still leave them as only tiny fractions of total power generation, which will derive overwhelmingly from fossil fuels (coal and natural gas) for the foreseeable future. As I wrote a couple of years ago:
In 1980, fossil fuels made up about 91 percent of total world energy consumption. Petroleum led the pack with 47 percent, following by coal at 25 percent and natural gas at 19 percent. By 2004, the fossil-fuel share had decreased a bit, to 87 percent, with petroleum falling quite a bit (to 39 percent), coal edging up slightly, and natural gas increasing to 23 percent.
Three-quarters of the increase in non-fossil fuel can be attribute to growth in nuclear-power consumption, largely outside of the U.S. Still, nuclear energy made up only 6 percent of consumption in 2004, up from 3 percent in 1980. Hydroelectric stayed pretty much level at around 6 percent. Other “renewables” – solar, wind, geothermal, etc. – grew from a negligible .2 percent in 1980 to a minuscule 1 percent in 2004.
The only technology that can be scaled up immediately to replace fossil fuels is nuclear power, an environmentally friendly option that is nevertheless opposed by most self-styled friends of the environment.
But to expect huge increases in alternative-energy use is itself overly optimistic. In North Carolina, solar will never amount to much while our wind resources are primarily in the mountains and off the coast – precisely the places where local residents, regulators, and lawmakers are unlikely to allow them to be located.
And as the Triangle Business Journal reported last week, alternatives to gasoline for fueling automobiles are viable only to the extent that they are heavily subsidized by the taxpayers. North Carolina’s biodiesel industry is barely creeping along despite years of hype, subsidy, and scandal. It seems that other states offer more generous subsidies for “renewable fuels” than we do, so major buyers are bypassing North Carolina producers.
Naturally, the industry would like to see the General Assembly enact additional biodiesel subsidies, either directly or through the tax code. Failing that, the industry will continue to pray that gas and diesel prices spike back into the $4 to $5 range. Hmm, I doubt that prayer request would get a lot of takers among the general public.
Hood is president of the John Locke Foundation