I am working on yet another project, due at the end of this week. Therefore, I haven’t had a chance to work much on my next essay, which will be about the potential for E85 to push Iowa much closer to energy self-sufficiency. Meanwhile, I have been sent a guest editorial on solar power by Tom Rooney, and this seems like a timely occasion to put it out for readers to chew on.
Tom is the president and CEO of SPG Solar, in Novato, California, one of the larger solar integrators in the country. His commentaries have been in the New York Times, Los Angeles Times, Miami Herald and “hundreds of papers in between.” He has also appeared on C-SPAN and Fox Business News.
Tom chose a provocative title for this essay. I say provocative because I personally consider both liberals and conservatives bad on energy in specific ways, and good in others. I think conservatives tend to overweight the role that domestic drilling can play in pushing the U.S. toward energy independence, and liberals overweight the impact that renewables can play in displacing oil.
While each has its part to play, I think each side broadly tends not to recognize just how deeply dependent we are on petroleum, and in particular imported petroleum. I think both sides would like to tell the Middle East to get lost while we either drill our way to independence if the government would get out of the way (pro-Big Oil), or make a painless switch to renewable energy if Big Oil would just get out of the way (anti-Big Oil). I have criticized both points of view, which is why conservatives have criticized me for being liberal, and liberals have criticized me for being conservative.
I don’t think my energy views are conservative or liberal, but rather I think they are reality-based. If I say that I think coal will become a much more important component of the liquid fuel mix in the future, that isn’t a hope or a wish. It is what I think will realistically happen — we will build coal-to-liquids plants to deal with declining petroleum supplies. Those on the right might hope to see it happen (pro-business, especially pro-U.S. business), but the left would adamantly oppose it on environmental grounds (unless one happens to be the governor of Montana which has lots of coal reserves). Me? I just think it’s likely to happen as petroleum depletes, so I think we have to be ready to deal with it.
With that intro (to specifically clarify that I don’t think that conservatives are all bad or all good on energy), here is the guest essay on solar energy by Tom Rooney.
Why Conservatives Are Bad on Energy: It’s All About the Costs
By: Tom Rooney
For the R-Squared Energy Blog
Conservatives, let’s talk about energy. And why so many conservatives are so wrong — so liberal, even — on wind and solar energy.
Let’s start with a recent editorial from the home of ‘free markets and free people,” the Wall Street Journal. Photovoltaic solar energy, quoth the mavens, is a “speculative and immature technology that costs far more than ordinary power.”
So few words, so many misconceptions. It pains me to say that because, like many business leaders, I grew up on the Wall Street Journal and still depend on it.
But I cannot figure out why people who call themselves “conservatives” would say solar or wind power is “speculative.” Conservatives know that word is usually reserved to criticize free-market activity that is not approved by well, you know who.
Today, around the world, more than a million people work in the wind and solar business. Many more receive their power from solar.
Solar is not a cause, it is a business with real benefits for its customers.
Just ask anyone who installed their solar systems five years ago. Today, many of their systems are paid off and they are getting free energy. Better still, ask the owners of one of the oldest and most respected companies in America who recently announced plans to build one of the largest solar facilities in the country.
That would be Dow Jones, owners of the Wall Street Journal.
Now we come to “immature.” Again, the meaning is fuzzy. But in Germany, a country 1/3 our size in area and population, they have more solar than the United States. This year, Germans will build enough solar to equal the output of three nuclear power plants.
What they call immaturity our clients call profit-making leadership.
But let’s get to the real boogie man: The one that “costs far more than ordinary power.”
I’ve been working in energy infrastructure for 25 years and I have no idea what the WSJ means by the words “ordinary power.” But, after spending some time with Milton Friedman whom I met on many occasions while studying for an MBA at the University of Chicago, I did learn about costs.
And here is what every freshman at the University of Chicago knows: There is a difference between cost and price.
Solar relies on price supports from the government. Fair enough — though its price is falling even faster than fossil fuels are rising.
But if Friedman were going to compare the costs of competing forms of energy, he also would have wanted to know the cost of “ordinary energy.” Figured on the same basis. This is something the self-proclaimed conservative opponents of solar refuse to do.
But huge companies including Wall Mart, IBM, Target and Los Gatos Tomatoes figured it out. And last year so did the National Academy of Sciences. It produced a report on the Hidden Costs of Energy that documented how coal was making people sick to the tune of $63 billion a year.
And that oil and natural gas had so many tax breaks and subsidies that were so interwoven for so long, it was hard to say exactly how many tens of billions these energy producers received courtesy of the U.S. Taxpayer.
Just a few weeks ago, the International Energy Agency said worldwide, fossil fuels receive $550 billion in subsidies a year — 12 times what alternatives such as wind and solar get.
Neither report factored in Global Warming or the cost of sending our best and bravest into harm’s way to protect our energy supply lines.
Whatever that costs, you know it starts with a T.
All this without hockey stick graphs, purloined emails or junk science.
When you compare the real costs of solar with the fully loaded real costs of coal and oil and natural gas and nuclear power, apples to apples, solar is cheaper.
That’s not conservative. Or liberal. That comes from an ideology older and more reliable than both of those put together: Arithmetic.