Ane K/Creative Commons
Good afternoon-I'd like to thank the sponsors of the Superconference for giving me the opportunity to speak to you today.
Before I begin, I should offer my apologies to the Geisel estate. According to Wikipedia, the Geisels frowned on people using Theodor Geisel's work in political discourse. Apparently Horton Hears a Who was a particularly touchy topic with the Geisels, who threatened to sue anti-abortion groups that referenced it on their stationary.
So, a disclaimer: I blame the conference organizers for the Seussian paradigm selection, and invoke the doctrine of Fair Use for the rest of this presentation. While I'm at it, I should observe that my comments reflect only my own views, and not that of AEI or any other organization.
In some ways, Theodor Geisel's Horton Hears a Who is an excellent analogy for an essay by French Philosopher Frédéric Bastiat, entitled What Is seen, and What Is Not Seen.
To refresh people's memory, in Horton Hears a Who, Horton the elephant realizes that there are creatures inhabiting something even as small as a grain of dust, and that those beings have lives to live that should be respected.
Horton's refrain is that "A person's a person, no matter how small." For pointing this out, Horton is scorned and ridiculed.
In, What Is Seen and What Is Not Seen, Bastiat the storyteller also notices things that other people refuse to see, and insists that these things are real, and worthy of our consideration.
"So, to energy choices. What is seen, and what is not seen?"
Just as with Horton, the people in our policy debates who spend their time pointing to the not seen, are often ridiculed, slandered, and disrespected.
In general terms, Bastiat observed that when government goes beyond referring free-enterprise to actively interfering with it, the consequences fall into two categories: what is seen, and what is not seen.
Thus, when government favors technology A over technology B, what is seen are the profits from sales of technology A. What is not seen are lost profits from lower sales of technology B. What is also not seen is the net drain of administrative cost, inefficient diversion of capital, reduced consumer choice, and generally reduced individual freedom.
Similarly, when the government favors sector A over sector B, what is seen are the jobs created in sector A. What is not seen are the jobs lost in sector B. And again, these direct losses are accompanied by the indirect: administrative and efficiency losses, and reduced personal opportunity and freedom for those interested in sector B.
So, to energy choices. What is seen, and what is not seen?
When it comes to wind power, what will be seen (should we continue to subsidize it), is some increase in the percentage of power the US derives from the wind, compared to other sources of energy.
What is not seen, or not acknowledged, is that wind power is costly, environmentally damaging in its own right, and relies on technologies most affordably built by our economic competitors.
Consumers spending more money on electricity will be spending less on dining out, buying new clothing, upgrading their housing, buying more education, healthcare, and so forth. Thus, what is not seen are the shopkeepers selling less goods, the restaurant servers making less tips, the carpenters finding less work, the clothiers selling less clothes, and so on.
"Biofuels are an economic and ecologic disaster."
Also not seen is the curtailed opportunities for those who have already sunk costs and time in studying things related to fossil fuel energy production. That degree in petroleum chemistry? Reduced in value retrospectively by government fiat.
And then, there are the environmental harms wind power will impose. Wind power will require a vast network of service roads and power lines if it is to seriously displace coal or natural gas in electricity generation. And as storage is little more than a pipe dream, wind power requires completely redundant backup power.
Besides killing birds and bats, wind farms are suspected of harming both terrestrial and aquatic mammals because of the sonic vibrations they produce.
Other studies have shown that windmills actually cause warming of the local environment, affecting local ecosystems, and because backup power has to "cycle" to compensate for fickle winds, you wind up generating more greenhouse gases (and conventional pollutants) than you would going with regular natural gas.
Wind power also doesn't blow when you need it. A recent study from Scotland found that windmills there, even in their windiest places, only produced about 17% of their supposed capacity, and rarely if ever generated power when power demand was high. So chalk up some of those heat and cold-induced hospitalizations and death due to power outages and brownouts on the "not seen (but no less real)" side of the wind equation.
As for job creation, look to China, which has cornered the market in rare earth elements, and has sharply lower labor costs and environmental standards.
Solar power has many of the same issues. First, people generally don't live out in the hottest places, so the power has to be transmitted long distances, often through populated areas, or wilderness areas.
In addition, desert ecosystems are quite fragile, and are populated by many endangered species. This is one reason why so much of California's deserts have been set off limits for development or even recreational use.
Gathering in lots of sunlight means gobbling up lots of space. Solar thermal power stations also require a lot of water, to generate steam for turbines, so add in piping water, and releasing humidity into the desert into the equation.
Solar power is also the most expensive form of power we can generate, and of course, it only generates power half the time, whereas your nuclear and fossil fuel power plants can run at high outputs 24 hours a day.
Solar photovoltaic cells, it has been found, are also dangerous for the water-seeking insects that are at the base of desert food chains. Apparently, the little bugs interpret the reflections from the solar arrays as water, and they hover over it until they die.
Oh, and about those rooftop solar arrays? As Ed Begley points out in his book "Living like Ed," You have to get up there and clean them three or four times a year, or they lose efficiency. Add in the cost of that busted leg on the "not seen" side of the solar ledger.
What about biofuels? As it turns out, biofuels are an economic and ecologic disaster. Corn-ethanol is not only uneconomic, producing it causes air pollution, water pollution, wildlife contamination, huge coastal oceanic dead zones, soil erosion, excessive water withdrawals, and more.
Corn ethanol also raises the cost of food, and was partially responsible for the surge in food prices a few years back that had Mexicans near rioting over the cost of corn tortillas.
It may count as the biggest energy boondoggle of all time, and the government keeps making it worse by increasing the amount of ethanol blended into the nation's gasoline supply. 40% of our corn crop is being used for fuel, rather than food.
Cellulosic ethanol? It's a technology that's been 10 years away for 40 years now, and it's still that far away. And it would consume massive land areas even if it were real.
Algae fuels? There's promise there, but again, it's far from ready for prime time, and when it does eventually happen, it'll almost certainly require genetically modified algae. Environmentalists are just going to love that.
Nuclear power? It's not clear that it's economic, given how entangled it is with government for the fuel cycle, and it's not clear where we'll put the waste. It's also unclear how much fuel is out there, or how long it would last. And after the Japanese disaster, nobody is looking for rapid deployment of new nuclear plants.
Compact fluorescent bulbs? They have mercury in them, put out poor quality light, are more expensive, and aren't living up to their reputation for long lives, nor are they being recycled properly.
Well, what about increasing energy efficiency? The problem with efficiency is that most economists don't believe in the idea that people are terribly wasteful with their money.
When you dig into proposed "efficiency" measures, you find that usually, there's a good reason why someone has chosen not to perfectly insulate their house, or use fluorescent lights, or drive a compact car, or use a clothes dryer rather than hang their clothes out to dry.
And if you try to subsidize energy efficiency, you invite unintended consequences.
For example, we subsidized energy-efficient refrigerators, and people kept the old one out in the garage. Consequence? More energy use.
We subsidized electric cars with stimulus money, but didn't rule out golf carts, so a bunch of people got free golf-carts at your expense.
We forced cars to be made more fuel efficient, and people drove more miles.
I could go on at some length. Suffice it to say that choices have consequences, some seen, and many not seen.
Thus, I will close my presentation with a Hortonian exhortation: when considering energy choices, don't only focus on what is seen.
Pay at least as much attention to what is not seen: the negative impacts on individuals in the disfavored industries, or other parts of the economy or the environment.
Because it matters not, when you're making the call, if the unseen are tiny, or if they are tall-their size matters little, or hardly at all! For "a person's a person, no matter how small."
Kenneth P. Green is a resident scholar at AEI.