Wednesday, January 22, 2014


Well Titled Piece

Politico magazine has a piece by two men, Bill McKibben and Mike Tidwell, called A Big Fracking Lie. It's a good title because nearly all the criticism in it is a lie. It's not the first time McKibben has lied to us. They, as usual, pretend that the beneficial trace atmospheric gas CO2 is bad, but even hard core believers are losing their faith in that lie. So, let's focus on one economic thing that McKibben, et al. can't seem to understand.

The authors don't like a proposed gas liquefaction plant planned for a private property in Maryland on the Chesapeake Bay. Americans plan to liquefy (cool) some of the overabundance of natural gas we have in America and send it to places far away where the citizens are now paying 3 to 5 times the price we pay for natural gas in America. We help out the other countries with less expensive gas and help out America with jobs finding, producing and selling the gas for a better price than the local price. Sounds win/win to me but I'm apparently too dim to see that it would be better all around if, as the author's propose, such a plan never happens. "...this gas needs to stay in the ground." Fat lot of good it does anyone when it's deep in the ground.

I can't be the only one who notices this bit of self delusion. First, the authors give the economic argument against exporting the gas.
On the economic side, a study commissioned by the DOE last spring found that exporting U.S. gas would raise the fuel’s price here at home. It’s basic supply and demand. More buyers overseas will drive up our domestic price by as much as 27 percent, according to the DOE. And that increase will reduce incomes for virtually every sector of the U.S. economy, from agriculture to manufacturing to services to transportation.
OK, the authors seem to grasp that more expensive gas would cost everyone more money and hurt the economy as more money goes to heating, manufacturing and transportation costs and that leave less to spend on other things. Good for them. But what do they propose for the replacement of the gas left deep in the ground?
They assure us that "real alternatives exist. Marylanders have organized a statewide “Crossroads” campaign to say no to Cove Point and say yes to a doubling of the state’s wind and solar power consumption over the next 10 years." (Emphasis added).
Here is the pitiful little that wind and solar are providing to the Maryland electricity grid:
Solar--Too small to measure a percentage (less than .05%)

That's not a lot of generation and even if you quadrupled it, it would still be piddling. Most of Maryland's electrical power generation is from coal powered plants although a substantial percentage is from a single nuclear plant. Only a little is from power plants using natural gas, about as much as is generated from hydroelectric dams. Marylanders pay nearly $.14/kWh, which is higher than I pay in Colorado where about 67% of the electricity is from coal fired plants and about 20% from gas fired plants. I pay 4.6 cents per kWh before adjustments and just over a dime per kWh after. Part of my 5.4 cents in adjustments comes from subsidizing the piddling but expensive energy from bird chopping, bat killing, eyesore wind generators.

The hugely expensive electricity from wind and solar will have a much worse effect on the economy than the theoretical rise in natural gas prices from overseas sales, that is, if wind and solar could in fact provide us with any useful power at all.

If McKibben and his ilk told us to leave the natural gas, coal and oil in the ground because they have fairy dust that will keep us warm and run all our electrical gadgets, I might be more inclined to believe that than the snake oil the alarmists are actually offering. The fairy dust energy would be no worse a lie than the ones they are already telling us.


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