Wednesday, June 24, 2009

Back In the Saddle Again...

Well, that was sure fun.

Let me just say that, it's easy to talk about public policy in the abstract, but you get a whole new appreciation for its implications when you're forced to experience personally the issue being regulated.

Fresh from what was supposed to be a two day brush with the health care delivery system (that turned into a week), I have a whole new respect for the incredible standard of care we have in this country. Heaven help us if we actually adopt a Canadian style goverment health care delivery system. But I digress... this is about energy policy not health care.

Bloomberg moved a story today about a Pew Center for Climate Change study that hung a 20% number on the cost of wind energy-- as in, it will cost 20% more than natural gas generated energy.

According the article:

"Harnessing and delivering enough wind power to make it a significant source of energy in the U.S. may raise its cost by 20 percent, according to the Pew Center for Climate Change.

Building transmission lines would cost as much as $4 billion a year, and managing its variability would add further to its price, the Pew Center said in a report today. Prices would still be competitive with other energy sources if the U.S. approves legislation to limit greenhouse gases, the group said."

But economics be damned, there is a political imperative driving our national appetite for wind energy that will level the playing field between wind and fossil fuels. It won't make wind any cheaper, it will just make other energy more expensive. (Can you say "lose-lose"?)

If you slap carbon capture and storage requirements on traditional energy sources like coal or nuclear, wind-- as expensive as it is--actually is cheaper. In government economics, this actually makes sense.

It's good to be back.