Black Liquor and Switchgrass: Washington’s Throwing an Energy Bash and You’re Stuck with the Tab

In today’s Wall Street Journal,  KimStrassel details just one of the unintended consequences of government policiesin energy that are disrupting markets, increasing prices and adding to thefederal deficit.  Her piece details how a government program designed toencourage the use of alternative energy is being used by elements in theprivate sector for whom it was not intended precisely because it makes economicsense.  And now the government is upset: forced to subsidize somethingthat doesn’t need subsidies because it makes economic sense. Doesn’t that tell us something about the basic premise of thegovernment’s current energy programs? To wit, they only subsidize –or compel the use of – those things that don’t make economic sense? And since so many things don’t make economic sense when it comesto energy, look for much more of the same.  

Right now politicians in Washington, state capitals and evenlocal governments are working overtime to justify their existence, increasetheir power to take more of Americans’ money and freedom by trying everycockamamie idea that someone who can’t make it in the market conjuresup.  “Green” and “alternative” energy is themodern alchemy, except government is providing large amounts of gold to see ifsomeone can create a smaller amount of gold with it.  The only time our leadersget upset about it is when it is profitable, as is the case with the blackliquor energy already being produced by paper manufacturers, as discussed byMs. Strassel.

For example, huge subsidies await those who can provideenergy from cellulosic biomass made from switchgrass and other plants, in thebelief that the most successful economy in the world can run on lawn clippingsand bushes.  The new energy tax proposal in the House of Representatives,introduced by Representatives Henry Waxman and Ed Markey, makes surethat’s about all that can be used by precluding the use of any branchesthat serve as kindling for the catastrophic fires that have been devastating ournational forests, burning down homes and killing people for years.  The Housebill specifies that no renewable energy come from the national forests.

The feds and many state governments are also working hard toturn our energy system over to the wind, gradually blowing our economy out tosea.  And since the wind doesn’t blow all the time, they areshoveling tens of billions – perhaps hundreds of billions – ofdollars of your tax money into a totally new high-tech grid, which presumablywill adjust to the whims of the wind better than mom’s laundry hanging onthe clothesline.  Of course, when mom has had enough, she tosses the clothesin the dryer, where the always available and always reliable electricity –currently brought to you by coal and natural gas – gets the job done inno time flat. 

There was a time when American politicians supported economicgrowth – or perhaps more accurately when there were no special interestsgroups pressuring them to oppose economic growth. The country was feeling its oats, having defeated statism in World WarII and ready to tackle the statism represented by the growing power of theUnion of Soviet Socialist Republics.  We were proud of our industrialoutput and our GDP, and the sky and the moon were no longer our natural limits. We used most of the world’s energy to produce most of the world’soutput, and were proud of it.  Along the way, the world learned from usthat growth, free markets and capitalism were the keys to prosperity. Following our example, other nations harnessed their energy and grew theireconomy.  The result: agriculture flourished, natural impediments wereovercome and the world became a better place for everybody.

Now, the elite bemoan our use of one-quarter of theworld’s energy, despite the fact that our five percent of theworld’s population produces about thirty percent of the world’seconomic output.  They talk about reducing our footprint and forcing anincrease in energy costs as being the only way to make “clean energy”the “profitable” kind of energy.  They cut off access to ourown energy supplies and subsidize unreliable ones in the process.  Theyspeak as if none of this will have an impact on jobs, family budgets, economicgrowth, or our standing in the world.

But the intrusions of our politicians in the very energythat is defined as “the capacity to do work” is deeplytroubling.  It bespeaks a profound ignorance of history, America’sunique place in the world and how we got here, and an almost fetish-likeattraction to things that don’t make sense.  As Kim Strassel pointedout in her article, if it produces energy and makes economic sense theydon’t like it; if it does neither, they will support it, subsidize it,and mandate its use.  But that great American philosopher, Ronald Reagan,saw the folly of government intervention in the economy years ago, when hesaid, "Government’s view of the economy could be summed up in a few shortphrases: If it moves, tax it. If it keeps moving, regulate it. And if it stopsmoving, subsidize it."