| So, here's how supply and demand works: Something is cheap because there is more supply of it than demand for it. So, the people who possess it have to sell it for the cheap. Because it's so cheap, someone figures out some really useful way to use it and demand rises. When demand rises, if the supply remains steady, the price of it likewise goes up because, well, that's how things work. Lots of supply, little demand, low prices; lots of demand, little supply, high prices. Enter, someone who wrote something that is posted on the self-described altar of market economics, the Mackinac Center's CapCon. Not only are gas plants cheap to build, they produce our cheapest electricity. The federal Energy Information Administration projects that by 2017 the cost of energy from gas plants will be only two-thirds the cost of wind energy. This is a serious blow to MEC's renewable energy "Easter Bunny."
First off, anyone familiar with energy economics will tell you that relying on cost estimates four or five years out is just silly. Here's why: Right now, gas is very cheap because there's lots of it thanks to hydrofracking, but comparatively little demand. That's especially the case during a mild winter as we've had, because natural gas is mostly just used in Michigan to heat homes during the winter. However, because it's so cheap, people are looking for ways to use it. T. Boone Pickens, who stands to make more billions from natural gas, even wants to convert our truck fleet to it. Building out a bunch of power plants using natural gas and using it to power more of our vehicles will have a predictable effect on the price of natural gas energy: It will go up. B the way, since no one at this time owns wind, that wouldn't happen with windmills. The cost of wind energy is based entirely on the materials used to construct windmills and supporting infrastructure like transmission lines. Historically speaking, all that will come down as technology improves. By the way, the entire thing starts with a lead paragraph referring to NASA climate scientist James Hansen as a climate change activist. It's true that in recent years, he's become more engaged in climate activism, but that's because he started as the world's pre-eminent climate change expert and believed that the future of his grandchildren demanded that he do everything in his power to wean us off fossil fuels. In other words, this piece starts out with an act of deceipt. |
