Friday, April 20, 2007

Sustainability and renewable energy

It is now obvious that the "sustainability movement" is basically a ruse.

On the one hand, we have politicians and gullible media folks who don't understand economics being taken advantage of by businessmen and investment bankers who understand economics all too well.

The governor wants a law passed that requires half Oregon's energy to come from so-called "renewable" sources. Of course this does not include hydropower, which is the cleanest and most renewable of sources imaginable.

To meet the goal would require long term investment in all the alternative (read: more expensive) energy sources. This will without question raise Oregon's energy costs relative to other states.

Why would PGE and Goldman Sachs be pushing this? Follow the money. An op-ed piece in the Oregonian today pulls back the curtain on this a little bit.

Goldman Sachs is trying to get the alternative energy technologies that they have invested in to be mandated by states, so they make boatloads of money. It has nothing to do with the environment.

PGE likes the bill because it gets to add the costs of the new technology directly into their rates without going through the usual rate-setting processes at the PUC. Again, it has nothing to do with the environment.

The gullible economically illiterate legislature and media think this is wonderful. They don't understand that if something costs more, that means it consumed more of society's resources to produce it. So mandating more costly energy sources actually is LESS sustainable, not more.

Oh, but Rob, the difference is the pollution caused by the traditional sources. If you add the true cost of pollution, the renewable sources are actually LESS costly.

First, that simply is not true, or at the very least it has never been proven. Our air is not polluted. Hydro might kill some fish, but I can get Salmon for $3 a pound at Fred Meyer. Doesn't look like a shortage there.

All of these energy companies that are on the renewable energy bandwagon are simply angling for a competitive advantage by getting states to mandate energy production technology that they have already invested in.

Every time you see one of the British Petroleum commercials that ends with "BP - Beyond Petroleum," it would be well to realize that BP has allowed their oil pipeline and production infrastructure to erode and decay so badly while they invested in wind power and other fads, that they are in serious trouble as a company unless they can get laws passed mandating renewable energy sources.

In effect, they are looking for a government bailout. Again, it has zip to do with the environment.

Whenever you see utilities or other large businesses pushing for the stuff, know this: it is in thier financial interests. They are not being altruistic. What they are advocating will increase their profits at the expense of you and me.


Anonymous said...

No large corporation can be trusted to be altruistic and they must be constantly watched for ever present ulterior motives.

But just because a profit is to be made doesn't mean a venture is suspect either.

i have a problem with the following bit from the article:

"They don't understand that if something costs more, that means it consumed more of society's resources to produce it. So mandating more costly energy sources actually is LESS sustainable, not more."

This is patently false. When you dissect what "societies resources" really means the fallacy is clear. Resources take the form of natural and human.

Take oil vs solar. Solar costs more because it takes more human resources from the manufacturing of cells to installation of cells etc to produce a given amount of energy. Oil is produced with far few employees to produce that same given amount of energy.

Oil companies have obscene profit margins as a result, while solar companies have very narrow margins in order to keep their prices even in the same ball park as fossil fuel energy suppliers.

I for one would rather see local producers of renewable energy make a small but reasonable profit and employ my neighbors than see trillion dollar oil companies make billions per year in profit for their execs and shareholders while employing none of my neighbors.

And this argument would be true even without the fact that the sun's energy is infinitely renewable and sustainable as are wind, tidal, and geothermal energy while fossil fuels are clearly finite and running out.

Bring on the renewable revolution for the good of our economies and the planet!

By the way, here is a good article about the practical economic benefits being realised right now in the US:

geoffludt said...

1. Does the previous poster suggest that "Human" resources are not "Natural"?

2. The poster states, "Oil is produced with far few employees to produce that same given amount of energy."

that's the point -- it is the least costly. The use of oil frees people to do other, more productive and sustainable things.

Finally, has a piece on the bamboozle of the sustainability initiatives being considered by the Portland City Council -- available here

Anonymous said...

Using terms such as "obscene" or "reasonable" for profits pretty much undercuts your whole argument and tags you as a nutcase. By whose definition are profits either "obscene" or "reasonable?"

Oil company profit margins are about 10 percent - that is, for every $100 in revenue, they earn $10 over their entire business. For instance, Exxon-Mobil earns "only" 81 percent of their profits from oil and gas. Were one to divide the profits earned by the number of gallons of gas sold, one would find out just what a small part of each $3 gallon of gas ends up in the pockets of oil company shareholders. To put it mildly, the state's profit - through gas taxes alone - is tremendously higher.

Anonymous said...

Who cares if Goldman Sachs/BP makes money if it really, truly helps the environment? We should be happy the free market is now supporting a move towards sustainability and environmentalism.