On Energy: Radio Essay for March 19, 2011

It has been more than one week since the earthquake and subsequent tsunami devastated the Fukoshima Daiichi power plant and plunged Japan and the rest of the world into a nuclear crisis. And it has been about a month since Libyan Colonel Muammar Khadafy determined to beat back civil insurgence with violence. Each incident has taken its toll on a common concern: the fragile state of worldwide energy supply.
On one hand, we have a stable, democratic government coping with a crisis involving the peaceful, though potentially catastrophic, use of nuclear energy for electrical consumption. On the other, we see the effects of oil production and supply running through the fundamentally unstable, despotically run regime of a Middle Eastern potentate. Ironically, the outcomes on a global scale are similar and the so are the lessons to be learned equally similar. Namely, providing power is not without risk and not immune to vulnerability.

No matter what your opinion of energy exploration and energy development may be the thirst for energy remains insatiable. The worldwide DEMAND for energy grows dramatically and threatens to outstrip reasonable supply within our lifetimes. The US is the largest consumer of energy. Our comfortable lifestyle and large industrial base places a heavy burden on global supplies. The full emergence of the so-called emerging economies is upon us. Their growing standards of living and increasing industrial output are sucking up any excess supply of non-renewable energy. The full recovery of the US economy is dependent in no small measure, on the continued supply of affordable oil. And this is not a given.

So what is a country to do? Drill, Baby, Drill? Maybe. Probably. But more is needed. Much more. There is a tendency to pooh-pooh alternative energies as too exotic or too expensive or too dangerous. All of this is in a state of flux around the demand equation. Some are exotic and expensive and dangerous. Taken individually, no one solution will ever close the gap between supply and demand. The truth is this: we need a bit of everything: nuclear, on-shore oil, off-shore oil, oil shale, nuclear fission, nuclear fusion, solar and wind, tidal and hydro. No one energy source offers a panacea. Given time, the natural balance of supply and demand will determine the winners and losers in the marketplace, not government. And government must resist the temptation to pick winners and losers though the arcade game of punitive taxation to drive social behavior. The market will provide. More specifically, the Free Market will provide.
Several nations have begun to express skepticism of the continued production of nuclear energy. German Chancellor Merkel is all-but-sounding the death knell for German nuclear plants 10 years hence. Wisely, Secretary of Energy, Steven Chu, has called for a review of the facts in the Fukoshima disaster but not for a moratorium on new construction. He is right to do so. Despite the impact of the strongest earthquake on record and a tsunami of biblical proportion, the disaster in Fukoshima was avoidable had the backup power been available. That is not extreme science; it is simply risk mitigation.

American power production loses over 50% of its output in transmission, and 1/3 of what is left through energy waste. We have the means today to eliminate the need for foreign oil through improved efficiency in home and commercial construction and residential electronics. Let’s get started on that.
We need a lot of arrows in the quiver on this one. The role of government in this should be to remove obstacles to development; let the market drive solutions; clear the path towards energy independence through the elimination of waste. Without a comprehensive approach to solving our problems, we might as well just kick the can down the road for the next generation to solve.

Press on.

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