Friday, April 12, 2013

Energy Idiocy

What is it about energy that send all sides of the political spectrum into spasms of babbling idiocy? Here are two items heard on my jog yesterday, courtesy of NPR, one from the right, one from the left, with the NPR interviewers mindlessly accepting idiocy in the middle.

Start with NPR's coverage of Gina McCarthy's Senate confirmation hearings. The issue is the EPAs efforts to close down coal-fired power plants to reduce carbon emissions

ELIZABETH SHOGREN, BYLINE: For four years, Gina McCarthy has been heading up the EPA's office in charge of air quality. She's crafted rules that are cleaning up exhausts from old coal-fired power plants. Some of those plants are opting to shut down instead of installing expensive pollution controls. Republican Senator John Barrasso from Wyoming says those rules have cost jobs.

SENATOR JOHN BARRASSO: Since you've taken office, 10 percent of coal-fired generated power in the United States has been taken offline. Do you see the EPA having any responsibility for the thousands of folks who are out of work for these plant closures?

GINA MCCARTHY: Senator, I take my job seriously when I'm developing standards for protecting public health to take a look at the economic consequences of those and do my best to provide flexibility in the rules.

SHOGREN: Senator Barrasso continues his barrage, naming coal miners he's met who are out of work for the first time in their lives.

BARRASSO: How many more times, if confirmed, will this EPA director pull the regulatory lever and allow another mining family to fall through the EPA's trapdoor to joblessness, to poverty and to poor health?
So, quick question: What is the ideal number of jobs in the electricity production industry? Answer: zero.

Really. If you want "jobs," the right answer is to shut down all the coal-fired plants, and let all those workers move to installing very inefficient windmills. No, better, hook them all up to stationary bicycles, producing 50 watts each; and then hire a bunch more people to grow food for them on locally-sourced sustainable organic farms. And, as Milton Friedman famously quipped, have them plow the fields with spoons so more people still can have jobs. (Coal mining itself has lost almost all of its "jobs" due to mechanization. Perhaps the senator would like to reverse that.)

Ms. McCarthy could easily have answered: "No, Senator. Industries will still need electricity, and that demand will move to renewables. Look at all the green jobs we will create."  Having started down the coal miner job route, the senator would surely not have had the wit to point out that the real "jobs" cost is in downstream industries that have to pay more for electricity.

Now from the left. The cost-benefit calculation prize of the year goes to NPRs next story, covering a scientific paper that predicts that climate change will cause more clear-air turbulence for flights near the jet stream over the North Atlantic.
BLOCK: Your study finds that by 2050, we might see the frequency of turbulence on flights across the Atlantic doubling and also getting stronger. This has to do with the jet stream. Can you explain why?

WILLIAMS: Well, climate change is accelerating the jet stream, making the wind speeds faster. And this is making the atmosphere more susceptible to the particular instability that causes clear air turbulence to break out. ... The conditions seem to be smooth and all of a sudden, you can hit turbulence unexpectedly ...

BLOCK: Well, do you figure that airlines will have to reconfigure their flight patterns, will have to change how they fly, where they fly?

WILLIAMS: Well, a pilot taking off from perhaps New York in the middle of this century to come across the Atlantic to somewhere in Europe will be looking at twice as much airspace containing turbulence. Now, they're going to face a choice that they could just grit their teeth and decide to fly right through those extra patches of turbulence or if the turbulence is particularly strong, they might instead decide to try to fly around it or above it or below it.

All of this, of course, means that journey times could lengthen if flight paths have to become more wiggly and less of a straight line. This is an increase in journey times, maybe more delays at airports and also, perhaps more importantly, an increase in fuel consumption. And I should mention that fuel is the number one cost to airlines. So any increase in fuel consumption will, of course, imply increased costs to the airlines.

And ultimately, of course, it could be passengers who see the ticket prices going up to pay for that.

BLOCK: Well, the irony there, too, I suppose would be that if you're increasing fuel consumption, you're also increasing the contribution to global warming which will be causing the turbulence in the first place, right?

WILLIAMS: Right. There's a sort of feedback there and it's a bit like poetic justice that maybe the atmosphere is somehow seeking its revenge on planes for causing this problem in the first place.
So much low-hanging fruit here. There have been a lot of attempts to add up the economic costs of global warming. Just how big is this effect? Should Gina McCarthy have answered Senator Barrasso with, "Yes, some miners will lose their jobs. But think how much cheaper airline tickets to Paris will be in 2050 because pilots won't have to fly longer routes to avoid clear-air turbulence?"

Savor the irony. One of the highest items on the global warming agenda is to deliberately raise ticket prices by carbon taxes.

"Feedback." About 2% of carbon emissions are from all aircraft. So how much do carbon emissions rise from slightly longer jet routes? Are we out of the fifth decimal point?

This is all so sad. I don't mind liberals who don't profess to believe in free markets getting it all wrong. But "free market" conservatives shouldn't quickly revert to Keynesian pump priming and public works arguments.  I don't mind conservative bible-thumpers who get science wrong. But bien-pensant "scientific" global warming nannies shouldn't be off by, oh, let's say 10^6 or more on cost-benefit analyses and feedback effects. Each makes their causes ludicrous. And just how incredulous should journalists be not to catch any of this?


  1. My understanding is that the coal power plants are still needed and that the power grid is in danger of failure. I imagine that BARRASSO is aware of that fact also, but knows that Gina McCarthy doesn't care. When the rolling blackouts come, she will blame the evil power companies who pay their CEO too much money. If BARRASSO is thinking along those lines, perhaps he is using the language of the left against them.

  2. Ever realize that many of them were early adopters and if the mandates and things don't continue or finish going through, their boondoggle to good tech conversion game, fails?

    Can we get a bit bigger than global warming here?

    Can we try to see a process that has repeated itself in various forms enough times that this time it got messed up since it was missing the critical component of previous processes?

    And what does economics as a science say about all the dirty stuff that we all know goes on? If ya going to do an economy as a whole, your going to have to fathom the unfathomable (how much dirty goes on, how much warmer the planet is), rather than conjure the unconjurable (perfect police, perfect models).

    But back to the main point… back in the 80s, the light bulb companies realized that they were going to run out on their patents and such on tungsten bulbs and they poured quite a bit into the first CFL lamps (as leds were not really looked at in a way that would clue them to today, and how obvious it is today).

    I won’t go so far as to believe the more extreme story of the collusions and such between the various players world wide. if that did happen, there was no evidence it was continuing in the years that various agencies looked and took entities to court for collusion.

    However, politicians can legally collude where CEOs can’t. These bulbs offered a nice round robin of things. But they were way too expensive; people didn’t like them, and so on… for the politicians, who are allowed to invest in things they make laws around, invested. They could turn a dog into a pony, and even have it blow unicorn farts on Tuesdays, as the laws they can make after investment, would have this magic effect on the economy. They ALSO got to leverage one of Chinas resources in the early days before manufacturing, mercury. Just as America has the largest deposits of nuclear material, which would make it king of the hill if we allowed it, china has mercury.

    This is the round robin where it appears everyone wins (at least from their perspective). Even, I bet, the Chinese leaders like it, as it spreads mercury in too small to clean amounts over too large an area to clean, and lots of it over cumulative time – not good for nerve development, but alls fair in economic war (at least that’s what is implied by the paper they published on modern warfare).

    If you look into the ownership of shares in certain companies, you may find that large blocks of it have remained in the hands of people who were part of the founding elite of that companies time, or their organizations and trusts after their passing

  3. So the idea you can get in on a market when its nascent, and then be early long term holders of large blocks of that asset, and collect dividends to your family for the whole time once it expands and is not a small market with its natural niche, but a huge market that a mandate defines – is very attractive from a organizers point of view, and more so in that its not illegal (that I know of).

    In a way, the CO2 game was to pick something that was unsolvable, and turn it into a perpetual cash cow. To get in early with their friends and start companies that would be the players of a new industry. Get in when they are dogs, and there are no mandates, then make mandates, and shape the market, and voila, history repeats. (Except according to the IPCC, nature decided not to cooperate with the scheme).

    From the perspective of people who you can read in the papers that are all dancing around in all of this stuff, this really is a way to be the rulers of the future. And no amount of economics in hypothesis that I ever see, ever includes this kind of knowledge and so modeling in the models.

    This was no longer the we debate to get the best thing, this was more a hybrid of the message for consumption to cover the real purpose of the political machine (as in soviet times), but really for the purpose of artificially creating what would appear to be a repeat of the robber baron era (and its worst aspects), but in green tech.

    How many other places can we now work out in recent years where the people who run things can invest in nascent tech, then direct billions to research, which was supposed to make magic things that would rocket the companies to the top, and they would become the economic equivalent of fords and DuPont’s with large blocks of shares, but the anonymity created by the people focusing on the leaders of the companies, not the many blocks of early shares…

    Another problem they have is that engineers are not wasteful. Efficiency, elegance, etc. are all qualities of great design engineering, and can completely make or break an economic model deciding whether or not to even try (and sometimes they try later).

    In a way, it was a cargo cult copy that was missing the key points that the prior windfall that dropped in their laps, and lit their CFLs in their heads. They either didn’t realize that CFLs are valid tech, but with a much smaller natural market. Green wasn’t valid, CO2 and hydrogen and all this stuff we are spending billions on, were avoided because no one was fool enough to spend billions on (and have no idea if anything is out there given our technology level). Ya cant use company funds of shareholders, but as a politician you can use the public till, and the hoopla will get you points for it too…

    Maybe that all wasn’t put down well. Sorry…

  4. It's obvious that nuclear is the way to go.

    I remember a talk that Coase gave [published somewhere]: Regulatory and policy changes get implemented when the deadweight losses become sufficiently large!

  5. airspace containing turbulence---what a wonderful description of the current debate on climate change.

    BTW, I am a liberal and I believe in free markets. Nothing having to do with climate change is about free markets.

    What really bothers me is that this is the one subject about which I know I could sit at a table with Prof. Cochrane and reach agreement, if he answered honestly.

    1. Democrats made a horrible mistake in not recognizing the incentive caused bias of all the profs who were feathering their own nests claiming the sky is falling. The first thing that Munger and Buffet teach is pay no attention to anyone who stands to make a buck by selling your on their report.

    We should have had the wisdom to say, the climate is changing but not that much and the courage to anticipate that we would find solutions other than taxes, etc.

    For example, we could turn off a lot of lights.

    2. By the same token, moderates on the right have tolerated wackoloons like Limbaugh, etc. who are even more greedy and disingenuous than the profs who cry the sky is falling.

    Here is truly the death of common sense, for which we deserve the irrationality of what we have.

  6. What is it about energy that send all sides of the political spectrum into spasms of babbling idiocy?

    SO TRUE.

  7. Quoting an anonymous comment to your posting on Financial Stability and the Macroeconomy:

    Numbers and graphs prove nothing to people who can see visions. The numbers and graphs are for those genetically inferior monkeys who won't understand even if they see them. They can't visualize because they have no imagination.

    Journalists can't be expected to be numerate. It would impair their ability to “see visions” which are invisible to “genetically inferior monkeys.”


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