As U.S. government authorities debate “cap-and-trade,” a gigantic new tax and rationing burden with which they plan to further hobble American coal, oil, and natural gas technology, consider for a moment the qualifications and accomplishments of the lawyers, bureaucrats, and now community organizers who have gradually displaced, as energy “decision makers,” the engineers and industrialists who built America’s energy industries.
Under the guidance of these worthies over the past several decades, a vast system of taxation, regulation, and government-sponsored litigation has been imposed upon our energy industries. These policies have created a business climate in the United States that is unfavorable for the production of energy, so most new energy production has been located abroad. Americans, therefore, now import 30% of their energy from foreign countries - a luxury that they can no longer afford.
Cap-and-trade is just more of the same. Much more.
How much do we import? While most eyes glaze over in discussions of “gigawatts” and “zillions” of dollars, many have seen or read about Hoover Dam - the great engineering miracle that harvests energy from the Colorado River. Hoover Dam is still considered so important that it is now hidden behind “homeland security” precautions so rigorous that public photographs of the dam are forbidden, lest terrorists plot its destruction.
Today, the three-reactor Palo Verde nuclear power station near Phoenix, Arizona produces six times the electrical energy of Hoover Dam - electricity that powers Los Angeles. Palo Verde was supposed to have ten reactors, but the other seven were stopped by anti-nuclear propaganda in the 1970s and 1980s. Actual replacement cost of the three-reactor Palo Verde power station in 2009 - leaving out the extra costs imposed by government - is about $6 billion. So, the capital cost of nuclear equipment to replace the electrical output of Hoover Dam is about $1 billion. American energy imports currently cost about $1 billion per day.
Every day - every 24 hours - the energy policies imposed by Washington destroy an amount of capital that could build the electrical generating capacity of one complete Hoover Dam.
If one ten-reactor Palo Verde nuclear power station were built in each of the 50 states, the United States could be a net exporter of $200 billion per year of energy, rather than a net importer of $300 billion per year. Exports would probably be lower because, as energy prices dropped several-fold due to the end of dependence on foreign supplies and installation of the best new technology, American use of energy - and concomitant prosperity - would markedly increase.
This scenario assumes the repeal of government regulations, such as the regulatory rules that prevent fuel recycling and breeder reactors and create - by government fiat - the so-called nuclear waste problem. This is solely a political problem - not a technological one.
While not as clean, safe, and inexpensive as nuclear power, a similar scenario can be given for hydrocarbon power development. A free-market solution to our energy problem would involve the construction of large amounts of both nuclear and hydrocarbon capacity - each technology built for those specific applications where it is most useful.
The problem is that the best new technology uses hydrocarbon and nuclear fuels. The United States is awash in essentially unlimited quantities of these fuels - uranium, coal, oil, natural gas, and methane clathrates - but the U.S. government is inhibiting their use. That government instead insists that the energy industries use boutique energy sources such as windmills and solar panels to produce energy, even though these technologies are far too expensive for large scale power generation.
Last week, energy expert Obama spoke at Nellis Air Force Base, where government has caused the construction of a 140-acre solar array at a cost of $100 million (2005-2007) to produce 14 megawatts of electricity - when the sun is brightly shining. Nellis AFB reports power output of 30.1 gigawatt hours per year for this array. Obama lauded the Nellis plant as an example of taxpayer-subsidized energy production. He opposes free market hydrocarbon and nuclear power.
The cost to build the three-reactor Palo Verde nuclear power station was $5.9 billion (1976-1988). It produced 26,782 Gwh of electricity in 2007. Correcting costs by the U.S. consumer price index, Palo Verde cost $4.35 billion per reactor, and Nellis cost $106 million - both in 2009 dollars. Therefore, each reactor at Palo Verde cost 41 times as much as the Nellis plant and produces 297 times as much electricity - while occupying much less land than the Nellis solar array.
So, the capital cost of electricity from the solar array at Nellis is 7.2 times higher than that of Palo Verde. Over a 30-year period, this is 1.62 cents per kilowatt hour for Palo Verde and 11.7 cents per Kwh for Nellis. Moreover, built with modern designs (the Palo Verde plant is 1970s technology) and fuel reprocessing, the 2009 cost of a Palo Verde equivalent is estimated to be about half that of the original plant. This makes solar power as exemplified at Nellis 15 times more expensive than nuclear power.
Operating and other costs, including nuclear fuel, for the two installations are comparable. Actually, Palo Verde is less expensive here too, since its lifetime before major reconstruction is estimated at 50 years versus 30 years for Nellis. Also, solar power is intermittent, so - if used in large amounts - solar power requires large additional expenditures on base load power plants and power grid changes.
Based on actual cost of construction - without government interference, the nuclear and hydrocarbon industries using private, nontax capital could increase U.S. energy production from 70% of our current requirements to 120% for a cost of between $1 and $2 trillion. Using current solar technology this would instead cost $15 to $30 trillion. The same people who are spending $2 trillion dollars of taxpayer money to buy the worst real estate mortgages and most bankrupt companies in the U.S. are also spending taxpayer money to buy the most expensive energy equipment – and passing laws preventing private industry from building better and less expensive equipment.
The people of the United States have a clear choice - either continue to destroy the capital equivalent of Hoover dam every day, or get rid of the politicians in Washington who have caused and continue to cause this destruction. Nor should they be misled by the excuses that hydrocarbons cause “global warming” and nuclear energy is too dangerous. These are merely new lies to justify the amplification of old policies (see www.petitionproject.org) - tax and regulate policies that transfer money and power to Washington at the expense of American freedom and prosperity.
Free enterprise built our energy industries. Only free enterprise can build the new energy capacity that we need. Free enterprise cannot do this unless the burden of taxation, regulation, and litigation (and subsidies of favored industries) that Washington has placed on the backs of American workers is removed - not increased by the additional oppression of “cap-and-trade.”
We cannot make sufficient quantities of the energy we need without the use of hydrocarbons and uranium. To force our engineers and industrialists to make useful energy without hydrocarbons and uranium is the modern equivalent of asking ancient Egyptian slaves to make bricks without straw. If we continue to allow this, we will have fewer bricks and inferior bricks - less energy and less prosperity.
