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November 14, 2010 | | Comments 0

Economic Rules for Energy Production

Does it matter ?  How could I write such a thing ?

The arguments continue on whether or not the effects of man-made pollutants and energy policies CAUSE global warming.  Unfortunately it seems to have become a political debate with Anti Cap & Trade (mostly Republicans) on one side and Al Gore Democrats on the other.  I think whether it has raised, or will raise the globe’s temperature is not the reason to support the development of Alternative Energy.  The reason is economic.  Some simple rules to guide our continued investment in Alternative Energies and why it benefits the world economies.

My economic rules for energy production:

Economic Principle 1 – It should be as close to the source of usage as possible

This removes transportation costs and inefficiencies from our energy production.

Think of the cost of transporting you hundreds of barrels of heating oil from half way across the globe or the electricity loss carrying it hundreds of miles (estimated at 15% to 20%)

Economic Principle 2 – It should be renewable

Cost Principle 2 – This makes supply much easier to manager.  Will we run out of sunlight or wind? This removes the research (most), and exploration from the cost base.

Economic Principle 3 – The consumer harnesses energy as opposed to purchasing energy.

A big difference.  The wind and the sunlight are in the public domain.  Your investment is only in accessing the natural resources freely available. We can call this ‘Open Source Energy’.

Economic Principle 4 – It is cleaner

Whether the CO2 levels and Methane levels actually are impactful enough to cause Global Warming, doesn’t really matter.  It is still polluting and causing harm to all of us.  If there are alternatives that are clean, we have an obligation to use them.  Can anyone tell me that if they produce an affordable electric car that can go 1,000 miles on a charge, has recyclable batteries, can be charged from the Sun, and can go 200 miles an hour that people would not think it is better.  Cleaner is better, non-polluting is better.  Is this really an argument? Are we seriously debating, what we mean by ‘clean’ ?

Clean is cheaper.

Economic Principle 5 – International relations

Our foreign policy is influenced by the monetary interests surrounding energy acquisition.  I don’t think people would be surprised by this statement.  China is more aggressively pursuing the acquisition of natural resources than the USA is, and in most cases is winning.  A huge amount of time and money in both the Business sector and the halls of Government are aimed to securing energy assets.  What if this was dramatically downsized in importance?  How would our foreign policy change?  Would we accommodate the human rights violations in Russia, the economic and trade violations in Venezuela, the wars in the Middle East?

Maybe the USA could actually stand for something, be principled, disciplined and committed to the right, as opposed to compromising, look the other way policies for energy economics.

So, as they debate in Washington and actually miss the point, we as Energy Citizens, should keep in mind that we have a way forward.  A cleaner, more economical way forward that makes sense for many reasons.

Support alternative energies.

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