Solar Energy Freeze

The Bush Administration and BLM are currently taking heat for imposing a freeze on new solar energy projects.

I applaud the freeze.

A smart alternative energy program would support alternative fuels when the market for alternatives is weak. The market for solar panels is through the roof and demand is exhausting supplies; Therefore, there should be a freeze on subsidized solar installations.

Placement of solar panels is key. A great deal of energy is lost during the transmission of electricity from the solar farms in the wilderness to the city. Solar farms in remote desert areas get less energy to the city than solar panels on roof tops. With solar in vogue, you will see solar panels being installed in urban areas where a greater portion of the electricity is used productively.

The next reason for a freeze is that making and installing solar panels consumes energy. The government should not be installing solar energy during an energy crisis because the energy they use for the project competes with the rest of the market. One should time the installation during off peak consumption of energy.

In other words, energy consumed by federal solar install happens now when the energy market is overwraught. The benefit happens 10 years down the road when a ton of other energy investments reach fruition.

The returns for this generation of solar panels is not there yet. With the current generation of solar panels, you don't get a net gain (either thermodynamically or economically) for the panels until over a decade (or possibly two). Manufacturing is going through a series of innovations that should bring this figure down.

A wise federal policy supports alternative energy when the market is weak, but lets the market lead when it is robust.

Freezing solar development on BLM for environmental assessment is the right course of action at this time.

Unfortunately, I don't think this wise decision is coming from Bush. It is coming from environmentalists. Regardless of the reason. I applaud the Bush Administration for this move. Freezing federal solar projects is the first smart political move I've seen taken on the environmental front this political season.

One of the ironies of politics is that a wise government often must act in the opposite direction of the popular sentiment. A wise government does not undertake a multibillion dollar spending plan when a sector of the economy that benefits from the spending is booming. A wise government makes its investments in a sector when the sector is artifically weak.

Recreational Energy Consumption

Salt Cycle advocates a thing called Bikes and Bombs. In this sport, you take a kids bike up to the top of Trax, then bomb down city streets. Judging from the site, and, by people bombing down the main walk in the U, the experience is even more intense if you use a lot of obscenities.

I admit that, even before the installation of Trax, I had dark thoughts of taking a bus to the top of a hill and bombing down on the bike. I often had these dark thoughts will pedaling up the long steep hills in Salt Lake. It takes 15 minutes ride from my parent's house to downtown. It takes an hour to ride back.

While standing at the bus stop with my bike in hand, the green brain cells in the core of my being would scream that I would be raping Gaia if I were to ride the bus. Not wanting to be a Gaia rapist, I would hop back in the saddle and peddle up the hill.

Somehow, SaltCycle has found a way to mask out the fact that riding Trax to the top of a hill and bombing down is, in fact, nothing more than the consumption of energy for recreation. Trax uses electricity (much of it produced by [gasp] coal). The energy you release bombing down the hill came from the violent act of digging a deep pit for coal, burning it in a facility built by the industrial-military complex, releasing greenhouse gasses in the process. Greenhouse gasses that lead to the global warming and the extinction of the polar bear.

How could a person in good conscious bomb through the U knowing that their recreational consumption of energy is killing polar bears??????????

My guess is that they do this by disassociating collective energy consumption from private energy consumption. Since Trax is owned by the state, its energy consumption is not evil. Only private energy consumption contributes to global warming, capiche?

Unfortunately, I think the reasoning is flawed. The environmental devastation in the former USSR where everything was owned by the state, ended up being worse than the US, without the side effect of widespread prosperity.

I bring up the Bikes for Bombs issue because I think it is pertinant to the discussion of Obama's energy proposal. The proposal has a massive expenditure on energy. The massive expenditure on energy will cause a large artificial consumption of energy. The proposal would make sense if you held the view that it is only the private consumption of energy that is bad. If you held the view that all consumption of energy contributes to greenhouse gasses, the you one would reject the notion that replacing private with collective consumption of energy would do anything.

That means individuals will have to find a way to suck in the gut and peddle up the hill to find ways to reduce their total energy consumption.

Energy Gimmicks

I agree with Barrack Obama. McCain's program to give the company a $200 million award for inventing a better battery, fuel cell (or whatever) is a gimmick. The market already will award all of the best in category solutions. There may be some need for government in research investment, but not in the final reward.

Unfortunately, Obama's counter proposal of spending $150B on an energy initiative is even worse.

The primary problem in our country is that we waste energy. The solution to this problem will come by individuals figuring out how to waste less energy.

A massive government energy program won't cut back on energy consumption. It will institutionalize energy consumption.

Putting this another way … our resource intensive lifestyles has us consuming way too much energy. Because energy was cheap, we fell into patterns where we opted for energy intensive products over labor intensive products. The challenge for the market is to find ways to reverse this trend and to replace resource intensive products and services with labor intensive products and services.

When prices reflect reality, the market does this on its own. Products that consume a great deal of energy go up relative to other goods and services.

Barrack's program to slam onerous taxes on all of aspects of lives to pay for a big energy program will simply institutionalize the current imbalance. Spending $150B on energy does not address the fundamental problem that we aren't using our energy sources well.

High energy prices do this. The leadership we need is one that directs us from energy intensive solutions of our problems to labor intensive solutions.

There is a lot of hatred directed at speculators of late. The great crime of the speculators is that they made prices higher at the moment than they might be if our economy ran on a strict cash and carry basis.

Speculators are driving up prices because they believe that energy prices will continue to rise through the next presidency which, barring a miracle between now and November, will be Barrack Obama in the Whitehouse and a Democratic supermajority in the House and Senate. It is a good bet that energy will cost more. Since Barrack wants $150B to subsidize energy consumption, it is a good bet demand won't drop.

I've seen reports showing a very small (1 percent or so) drop in US oil consumption. The big problem is world demand. The US would do well if it increased oil production. The problem we've always faced in the past is that our government tends to thrash from underproduction to overproduction.

I doubt we will ever see anything but gimmickery and overreaction by the political class.

Big Oil is Too Big

A guy named Derrick left an odd comment that I can't quite decipher. Apparently, he thinks that one of the advantages of Obama's profit tax is that it would force big oil companies to invest more in alternative fuels. That is, to avoid the profits tax, the oil companies would sink their money in alternative fuel as a tax shelter.

I disagree with this idea on many levels. The main reason is that I think that the big oil companies are big enough. I would rather see the wealth from the windfall profits distributed by dividends or as increased stock value. The private investors would then invest the profits in small alternative fuel companies.

The last thing I would want to see is the big oil companies dominating the new alternative fuel business.

Nuclear aside, almost all alternative fuel investments are best made on a small scale. The small bio-diesel operation that transforms excess crop and cooking oil from the county is a highly efficient and targeted concern.

An artificially subsidized regional bio-diesel refinery will not produce much more fuel than it consumes in transporting crop to the plant.

Alternative fuels are primarily about efficiency.

The cost of transmitting energy means that solar panels and windmills are best when distributed near the point of consumption.

Alternative fuel is largely about replacing big energy with small energy.

By their nature Federal subsidies for alternative energy or special tax constructs will end up favoring the big, inefficient solutions of the past.

Derrick's second claim seems to be that there was no investment in alternative energy in the Bush years. I watch the markets. Alternative energy is booming. Alternative energy stocks have been booming.

It is a risky investment. No-one knows which company will be the big thing. It is probably best to invest in alternative energy funds or ETFs. The other big risk of alternative energy is that governments control oil supplies. Since governments are driven by lust for power, they end up creating false markets by flooding the market with oil to drive small firms under. They then crimp the market.

For that matter, the history of big oil is quite disgusting. Monopolists would flood the market to drive out competition, then jack up prices. The Standard Oil Monopoly was as evil as the OPEC cartel is today.

The last thing this world needs is for big oil to buy a dominant role in alternative energy.

UN Green

The United Nation's Building renovation will cost $1.9 billion. The result will be a building that is pretty much the same as the current one. A big reason for the run up in in cost is an effort to make the building green. The renovation will improve the efficiency of the building by 30%.

The article does not say how much energy the building consumes; however, I find it safe to guess that the $1.9 billion dollar renovation effort will consume far more energy than the efficiency gains.

Sadly, I fear that the UN renovation is symbolic of the international left's effort to stop global warming through government funding. Resources consumed by the left's stab at controlling nature is likely to be equal if not greater than the resource savings. The economic costs will dwarf the economic benefits. Finally, the primary beneficiaries of all the hot air blown by the efforts will be the elite core. As with the majority of efforts dreamed up by the left, the elitist will reap the rewards from the effort and the people will languish.

I like the UN. I wish that we had opted for the lower cost effort that would have involved building a new UN building. Moving the Bureaucrats, then renovating the old UN building. The smart path would have given us a second building for the massive investment. The UN may not be popular, but it is worth the effort to keep as much of it in the US as is possible.

Back to alternative energy: It seems to me that Natural Capitalism by the Rocky Mountain Institute is a better approach to the energy problem. Natural Capitalism wishes to make resource consumption a bigger part of the cost equation. With the cost of resources taken into account properly, the market will find ways to adjust to the new equation.

ICE

I just stumbled on this site called ICE (Igniting Creative Energy). ICE is a challenge for students that encourages experimenting on ways to conserve resources. The deadline for entry is January 31, 2008.

Wind Up Flash Light

Utahns are supposed to turn their lights off at 9:00 PM on September 19th as some sort of praxis in the environmental revolution. I like that the event is raising awareness for conservation. However, I doubt that the event itself will really do anything. It is not like the state will be able to turn a coal power plant off early because we turned our lights off.

Real conservation happens when we figure out how to consume less in our day to day lives. Turning off lights is good. Figuring out how to live without turning lights on is even better.

A few months ago, I got a wind up flashlight. These flashlights have a small generator that charges a capacitor which fuels an efficient LED. The lights are basically run by human energy. So, other than the environmental damage done during manufacture, the flashlight is sustainable.

I got the flashlight for camping; However, I found that by keeping the flashlight with me at night, I can pretty much go without turning any lights on at home at night. The flashlight I have seeems durable enough to last several years.

It is strange, but having a the flashlight on the night stand encourages me to not turn on any lights at night.

The only problem, of course, is that I filled all of my light sockets with expensive (and toxic) flourescent bulbs. Having a low wattage bulb in a socket doesn't really save anything when they are not turned on.

Lets see. If a kilowatt hour costs a dime, and the standard light fixture in my house consumes 50 kilowatts. I would have to replace about 400 hours of light consumption to save $20. It is on the outside of doable. Of course, I can now retask the flourescent bulbs (ie, give them to a charity).

Add that to the fact that I now have a flashlight (with no batteries) I figure it is a pretty big environmental plus.

Anyway, if you are going to participate in the Lights Out program, I believe that the real energy savings comes not simply figuring out how to turn lights out. But figuring out how to turn fewer lights on.

Strategic Bio Fuels Reserve

Fidel Castro and Hugo Chavez have been on a major international campaign against the use of ethanol and other forms of bio fuels.

I agree that massive Federal subsidies for ethanol production will likely run astray. Federal subsidies have a history of creating false economies. Subsidies tend to concentrate wealth in the hands of a few politically connected people. Subsidies also tend to mask market signals. In other words, like most big government programs, subsidies lead to a false economy where a very small number of extremely rich people make questionable decisions based on bad information.

In such a world, it is highly likely that the government program would divert food resources from the mouths of babes into the belly of the machine.

Although it is likely that the proposed ethanol subsidies will be little more than an expensive boondoggle, I believe it is possible for the government to support ethanol production without messing up the market. It is even possible that for a government to support ethanol without hurting the food supply.

The challenge with the food supply is that the food supply is controlled by the weather. In years of famine, there is insufficient supply of food. Prices rise, and the amount of food stored decreases. Interestingly, the years of abundance are often worse for farmers than years of famine. In years of abundance, the market is flooded with food, and prices drop as farmers try to unload perishables in a crowded market.

To help even out this unpredictable market ruled by feast or famine, the United States government has all sorts of subsidies, price controls and tariffs in place.

Rather than creating a new ethanol subsidy, the US government could spur development of ethanol by replacing several of the existing farm subsidies with a strategic bio-fuel purchasing program. This program would purchase excessive corn in years of abundance and convert the excess into bio-fuels. This program would only purchase grain in times of abundance. The program would then sell fuel from the reserves on a gradual basis (helping offset the cost of the reserves.)

By coordinating the purchase of bio mass for bio fuels with climatic cycles, the government would actually end up enhancing the food supply by stabilizing the food market. They would encourage the development of the ethanol market by creating a stable source of ethanol.

By developing a strategic reserve that concentrates solely on buying excess production during years of abundance, the government would effectively create a bio fuels subsidy that enhances both the fuel and food production cycles. Such a system would work within the existing market, and would allow the government to answer strategic security needs of providing fuel and food with a minimum of direct interference in the market.

Solar Row

Solar engery is extremely interesting as it is a technology that we will want to incorporate into our living spaces and personal portfolio of investments. Increased awareness of solar energy is also intriguing from a design perspective. The goal of sustainable development is for people to develop living spaces that take maximum advantage of the sun that hits their property.

As people put their minds on developing houses with a low carbon footprint, they will find themselves doing all sorts of interesting calculations to keep sun for the garden, heating the house and generating electricity.

I just found a cool site: Solar Row is project by Wonderland Hill Development of Boulder, Colorado. This project has 13 houses designed for sustainable living. This is the type of project that I think will really make a difference in the world. A Baker's Dozen is about the maximum size that a rational human would want for a development. It is enough to give the developers the economy of scale that they need without creating a no-mans-land of undiffentiated houses that you get with bigger developments.

As people incorporate the ideals of sustainable living into design, I think we will see a massive improvement in the quality of our living spaces.

Unfortunately, the project is in Boulder (one of the most expensive communities in the Mountain West); So, I think I will buy a lottery ticket. If I win the lottery, I will buy a unit on solar row.

Solar? NIMBY!

In a previous post, I put forward the supposition that solar is best developed at a local level. The federal government needs to make sure that the grid is open to alternative energy and define standards that allow people to connect things to the grid, beyond that, Federal efforts to develop solar are bound to muck things up and simply enrich a oil barrons.

One of the replies to the post is that solar should be developed by local politics.

If you jump back in time (a half century ago); you would find that there was a great deal small companies working with various alternate energies. Most of these efforts were shut down by NIMBY local politics.

The down and dirty of it is that many forms of alternative and renewable energy create more visible pollution than oil and gas. The contraptions that harness water power, windpower, or that burned renewable biomass were unsightly.

Biodiesel, BTW, is not that terribly new. All that has happened is that it went from ridicule to chic. Do you really like cars that smell like french fries? Do you really want someone brewing up fuels in their garage? The political judgment on this type of activity a half century ago was a resounding: Not In My BackYard. Communities past a boat load of NIMBY laws that forced us into a single energy source solution.

Anyway, solar energy is right at the cusp where it will be cost effective on a massive scale. Once it is cost effective, greedy individuals and businesses will be slapping solar panels on their roofs to cut their energy bills.

Since there is a built in economic incentive for going solar, there will be no reason for local communities to play an active role in financing solar (beyond their own infrastructure developments). I suspect what we will see is local politics falling back into its NIMBY mindset. I suspect that local politics will quickly fall into its traditional negative role in efforts to limit where, when, and how people apply solar. There will be lawsuits galore when onen person's solar panel blocks sun from another property. Likewise, I wonder how long the politically correct chic wears off and we have the John Edwards of the world suing people right and left for putting up solar eye soars.

My judgment on political involvement in solar is: If they government makes massive subsidies on solar before it is cost effective, they will do more environmental harm than good. Subsidizing solar when the pollution created by the production, installation and maintenance of the panels is greater than the amount of pollution saved by the panels actually adds to the net pollution on the planet.

Subsidizing before it is cost effective creates waste. Subsidizing after it is cost effective is unnecessary.

Any federal program to promote solar will push solar energy into the big energy market. Local governments are likely to start with well meaning efforts to promote solar; however, local politics will eventually push them back into the role of zoning and regulating the industry.

In other words, the market is the sun's best friend.

(Alternative Energy Links)

Different Technologies Require Different Markets

I am a big believer in "Small is Beautiful."

Different technologies seem to require different market models. For example, Coal, Hydroelectric and Nuclear do best with the BIG MODEL. A big coal generator will produce less pollution for the same input of coal and output of electricity as a large number of small coal plants. When coal was used by small industry or for heating, it proved to be extremely dirty.

Solar and biodiesel seem to work better at a smaller scale. Biodiesel draws power from waste materials; so you need to have a large number of independent processing plants processing the fuel.

Solar energy reaches it zenith when it is incorporated in construction. Incorporating solar into construction involves all sorts of contracts with the property owners.

It is a strange difference. If you are going nuclear or with coal; you should be thinking in terms of large plants geared to maximize the energy produced for the environmental production. When thinking solar or biodiesel, I hope that people will be thinking of small concise applications of the technology.

Since coal, nuclear and hydroelectric require big operations, they really are in a situation that requires government oversight.

My fear is that when you take the big government/big industry view of developing bio technologies and solar, you will end up forcing the naiscent industries into the same big energy models.

This is what we are seeing with George Bush's big push on ethanol. He is forcing this biotechnology into big business/big government model that they Bush's know and love.

Solar, ethanol and biodiesel can all turn ugly if forced into the big model. The really scary thing about solar is that people will be tempted to cover large sections of the earth with solar panels. I could see the government covering (and consequently destroying) hundreds of square miles of BLM land with solar panels.

Solar Easter

Happy Easter. It was a bright beautiful sunny day. I hope you spent your Easter outside enjoying it.

Speaking of the sun ... I've come across more and more debates on solar energy. There are several new technologies and manufacturing techniques on the horizon that look quite promising.

The deal with all energy technologies is that they not only need to make economic sense, they need to make environmental sense. The waste products and chemicals used to make the last generation of solar technology did not add up to a net positive. They did more harm than the fossil fuels saved. It looks like we are right on that cusp where the technology will work.

Unfortunately, the shrill debate about global warming has people demanding subsidies for the technology.

I wish people understood basic economics. We are on the cusp of solar becoming economically and enivornmentally cost effective. Subsidizing the roll out of solar before crossing the cusp costs a lot and does environmental damage. Once we are on the positive side of the curve ... you don't need subsidies because it is a cost effective investment.

In the aftermath of the oil embargo of the Carter years, there was a massive trillion dollar effort to push alternative fuels onto the market. By trying to push technologies on the market prematurely, the effort actually ended up collapsing and setting back the technologies.

The same thing happened with nuclear. The government went hog wild and pushed out a large number of reactors that produced waste problems we don't know how to handle.

Subsidies are generally the result of applying short term thinking to long term problems. The long term solution for alternative fuels is to let the market grow organically. Big government programs destroy that organic growth. They generally widen the gap in income and have a long history of magnifying the evil side effects of technology.

People demanding that the government should bumble over the market to subsidize solar should look at the history of the government bumbling over itself to build dams, nukes and subisidize big oil. The market does a better job of signaling when to go with a new technology.

In that regard ... I don't think this is the year to buy solar. In two to three years, there will be some really big things on the market.

This is the time to start researching solar. It may be a good time to buy gadgets and start preparing for an investment in solar down the line.

A Salt Lake store just opened a web site called Solar Home (solar home ad). This company sells solar products at a discount. The main solar products are at a point where it takes about 10-20 years to pay back the cost of the investment in energy savings (assuming that the labor to install and maintain the units has no value). In this regard, the most interesting products are the educational products and certain "off the grid" contraptions that can power things in remote locations on for portable power.

In the gadget area, I really like the solar powered fountains. Of course, buying a solar powered fountain or a solar night flower doesn't do anything for the environment. These products don't replace energy consumed from other resources. If you want outdoor lighting, you can get outdoor lighting, without having to wire up the garden.

I think energy efficient appliances is the best place to invest consumer dollars at this point.

Reduce, Reuse, Recycle and Get Taxed

One good thing about the new interest in biofuels is that many of the movers and shakers in this movement are getting to experience for themselves the idiocies of government regulation. Tech Dirt reports on the plight of a couple who were [gasp] converting used cooking oil from restaurants to run in their vehicle. They were visited by helpful men from the government expecting them to pay thousands in special licensing fees ... the fees set by progressives of the past to raise the bar of entering into the alternative fuel market.

Now that we are in a phase that biofuels are politically correct, I suspect that the bureaucrats will try to find ways to back away from the licensing fees.

BTW, the $2500 licensing fee that the Yehuda Berlinger must pay to convert used cooking oil to motor fuel is exactly the type of fees that progressives hope to impose on all industries. The effect of such fees is generally to wipe out the diversity of the market. A buniness has to be big to navigate the world of big government.