Post-Mortem for “Clean” Energy

So the Intelligence Squared debate last night in New York on the motion “clean energy can drive America’s economic recovery” went very well for the side of truth, justice, and the American way. My debate partner Robert Bryce and I were voted the winner of the contest in a landslide: the undecideds broke more than three-to-one in our favor, and we even peeled away three percent from the pre-debate vote in favor of the motion. An edited version of the clash will be broadcast some time next week on Bloomberg TV; stay tuned to Power Line for updates, or, if you are really interested, you can watch the whole thing online at the link above as soon as they post it.
Meanwhile, here are a few excerpts from my opening speech against the motion to whet your appetite:

Our case against the motion comes in two main parts: First, that the motion represents a brazen bait-and-switch–actually two of them; second, that it is based on a basic but surprisingly widespread economic fallacy that paying more for energy somehow will make all of us richer. . .
The bait and switch comes in two parts. We have been told, for the better part of the last 15 years, that we need to make a rapid transition to clean energy in order to stave off climate catastrophe. All of the official assessments produced by the national and international governmental processes such as the UN’s IPCC, concluded that the cost of replacing fossil fuel energy with non-fossil energy sources would be substantial, and that it would reduce economic growth and GDP. The pessimists said it would hurt economic performance a lot, and the optimists said it would hurt only a modest amount. But to repeat: everyone agreed that the sign before the aggregate economic number was negative.
With the collapse of meaningful climate legislation both here and abroad, and the arrival of what we’re still calling the Great Recession, suddenly the argument for clean energy has shifted into the form of tonight’s motion: clean energy will make us richer! It is the path to prosperity itself. Happy days are here again. Behold the new domain of free lunch economics: free lumens.
The basic problem with so-called clean energy is that nearly every form of it is much more expensive–sometimes two to three times as expensive–as the conventional fossil fuel energy sources it seeks to displace. Which means that energy costs to consumers and/or taxpayers go up. I know of no economic theory that finds the economy benefits by reducing the purchasing power of consumers. The case for the motion rests on the same fallacy as the retailer who loses money on every sale, but hopes to make up for it in volume.
The second bait-and-switch concerns what we mean by “clean” energy, because the working definitions of “clean” are turning out to be so elastic as to make the term meaningless. Typically clean energy has meant purely renewable sources such as wind, solar, tidal energy, and geothermal, along with environmentally neutral technologies such as biomass and biofuels. (Corn ethanol badly fails tests of environmental neutrality, by the way.) Despite more than 30 years of emphasis on such sources, they still account for less than 5 percent of our energy supply.
Now suddenly we’re told that natural gas is a clean energy source that we should use to displace coal. But something is very odd if we are now counting a fossil fuel–a non-renewable hydrocarbon–as a “clean” energy source. Do carbon dioxide emissions no longer matter when determining if a fuel is counted as “clean”? Consider: climate orthodoxy calls for total U.S. CO2 emissions to be reduced to 1 billion tons by the year 2050; today, CO2 emissions from natural gas are–1.2 billion tons. This is why the Sierra Club two weeks ago changed its position and said we must completely phase out natural gas use by the year 2050. As the Sierra Club’s director of climate and energy David Hamilton told The Politico: “We want people to know that natural gas is not a clean fuel.” Mark Brownstein of the Environmental Defense Fund’s energy program said “Simply because coal is awful doesn’t mean natural gas gets to be terrible.”
How is it that natural gas, which produces 1.2 billion tons of CO2 emissions currently, is considered “clean energy,” but nuclear power, which produces zero CO2 emissions, is not? You begin to suspect that the definition of “clean” depends on what is most convenient for people who want to push particular energy schemes on us with mandates and subsidies.
Moreover, if natural gas is now considered “clean” energy, then you’d have to include oil as clean energy, too, as it has virtually the same CO2 emissions per unit of energy output as natural gas. [Here are the figures according to the Dept. of Energy: natural gas emissions: 1.1 lbs of CO2 per 1,000 BTU; petroleum, 1.2 lbs per 1,000 BTU]. And if you are willing to spend enough money, you can scrub CO2 from coal, meaning that it could be considered “clean” energy, too. That’s why President Obama speaks of “clean coal.”
The point is: the team arguing for the motion cannot offer us a rigorous definition of “clean” energy that includes natural gas but excludes other fossil fuels or nuclear power. And then you’re left with the rest of the “clean energy” portfolio of expensive sources that cannot scale up without mandates and subsidies. And even then they still fail. . .
I conclude with an observation on the essential absurdity of the motion. If this motion were true, we wouldn’t have to debate it. Did we have to debate whether railroads, automobiles; the telegraph and the telephone would transform transportation and communications? Or that the technology revolution would transform American productivity? Did we, 100 years ago, need to debate the motion that “new oil, coal, and gas supplies will power the next generation of American industry”? Of course not.
Clean energy, however defined, does not resemble any of the past histories of recession-busting forces. There isn’t actually a great need right now for new energy supply: energy consumption in America is down sharply as a consequence of the Great Recession–by the largest percentage drop since the end of World War II. Building new energy supplies right now makes as much sense as building new tracts of suburban housing. By the way, none of the clean energy ideas presented by the other team do anything about the one aspect of energy that most bothers us–our dependence on foreign oil. Most “clean” energy is all about the electricity sector, which does not run on foreign or domestic oil at all.
Has there ever been an engine of economic growth that required government mandates and massive subsides to make happen? Did we need to mandate that people buy automobiles, houses, and desktop computers to make those sectors engines of economic growth? The obvious answer to these analogous questions should guide your thinking about how to vote on this motion.

Final footnote: I’m calling yesterday “Twofer Tuesday” for the AEI energy team, and my frequent writing partner Ken Green was also in New York taping an episode of the John Stossel show for broadcast later this week, and Stossel writes about Ken’s latest paper ripping apart the “green jobs” scam in his newspaper column today. And for you Maryland residents, here’s a quick takedown of Gov. Martin O’Malley’s stupid idea to hit ratepayers with high-cost offshore wind power.
By the way, Ken and I are both accepting more debate bookings, if anyone wants to mix it up with us.


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