The Politics and Economics of Energy

March 13th, 2021 by dayat Leave a reply »

Losoncy 13

The politics and economics of energy are something to behold! There is a saying among environmental researchers that scientists do not make the laws. How true! This is reflected even with the Environmental Protection Agency (EPA). That agency’s proposed budget for the next fiscal year is in the 10 billion dollar range, the largest annual budget in its history. The funding comes from Congress, thereby subjecting the agency to politics. This is not a bad thing. If the EPA were to get too far out of the political currents it would become ineffective and the federal government would begin to break down. Imagine the chaos, for example, if the EPA were to order Americans to destroy their vehicles and start walking, bicycling, or canoeing to work!

One might at first blush expect science, specifically environmental science, to be the driving force for the development of an energy policy suited to our 21st century. Not so. It is one of three, alongside of politics and economics. The goal of the Administration is to phase out the use of fossil fuels in favor of alternative non-polluting fuel. To accomplish such a goal it would be necessary to have those non-fossil fuels available and affordable. It would also be necessary for people to accept new fuels and the changes that would be involved. For example, if lighter vehicles were required in order for battery-driven energy to be practical, would Americans give up their bigger and heavier vehicles?

Energy literally makes the American way of life tick. Energy runs the clocks and radios that wake us up every day. Energy heats the water for that morning shower. It toasts the bread that goes with the coffee it brews and the eggs it cooks. It lights our living and working space, runs the security alarms, powers our hearing aids and computers, runs our vehicles and enables the manufacturing of everything we make. It produces fertilizer to grow our food and provides the heat necessary to refine our oil. It is not just energy that is the bedrock of the American economy but CHEAP and PLENTIFUL energy.

Therein lies the challenge: for new forms of energy to be useful and acceptable they must be affordable and plentiful. Much of the thinking in Washington these days revolves around the notion that if fossil fuels could become more expensive alternative fuels would be perceived as cheaper. The saying inside the beltway is that energy is too cheap! (And tax revenues are too low!) Thus, if gasoline were to cost six or seven dollars per gallon the country would be screaming for hybrids and mass transit. But the politics of the day pressure the government to keep energy cheap, especially given that most of the citizens cannot afford any rise in the cost of living. The feds have three motives to increase the cost of energy. Currently they are contemplating raising taxes on gasoline by over one dollar per gallon.

o Higher costs mean lower consumption. Conservation buys time.
o Higher costs create incentives for the development of alternative energy sources.
o Higher costs mean more revenues for the federal government.

That, dear friends, is what it means to say that not only science but also economics and politics drive our nation’s energy policies. As a matter of fact these forces drive our entire environmental policy.


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