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A Carbon-Free Electricity System in 10 Years

Gore energy plan may signal the twilight of free economies

Samuel Staley
July 22, 2008

Former Vice President Al Gore just called on America to ditch electricity that is generated by fossil fuels over the next 10 years and shift to a carbon-free system using renewable energy sources. Anyone taking the Nobel Prize-winner seriously recognizes that achieving this goal would inevitably entail giving the government control of vast swaths of the private economy.

Mr. Gore's goal is to eliminate man-made greenhouse gases. That means moving the economy away from natural gas, oil, and coal and toward solar, water, wind and geothermal.

"Ending our reliance on carbon-based fuels," Gore said, holds "the answer" to overcoming three challenges: our stagnating economy, global warming, and "dependence" on foreign oil.

Shifting to renewable sources would reduce our reliance on oil, cut carbon dioxide emissions and, according to Gore, create high-wage jobs in a new environmentally-friendly industry.

It's a nice armchair theory. But what would it take to achieve it in the real world?

Start with restructuring the entire economy, piece by piece.

Currently, 70 percent of our electricity is produced by fossil fuels, according to the U.S. Energy Information Administration. Another 21 percent comes from nuclear power. Just 9 percent of our energy currently comes from renewable sources.

But, there's a twist. Two-thirds of that renewable power comes from water, which is limited and geographically constrained to places with rushing rivers and dams such as the Rocky Mountains and other Western states. Less than 1 percent of all of our electricity currently comes from wind and geothermal. Solar power is barely a blip.

Yet, Gore is proposing that in just one decade we literally flip our electricity sector from fossil fuels to 100 percent renewable sources.

There are reasons that existing renewable technologies serve a tiny fraction of our overall electricity needs today. Cost is one. Distribution is another. And you simply cannot make Gore's shift, as much as it may sound like a good idea, in just 10 years without an unprecedented dislocation in the economy.

Gore recognizes that shifting to renewable sources for power generation would require massive upgrades to, and expansion of, the existing electricity transmission and distribution system - he calls this the Unified National Grid - so that customers can tap into these renewable sources.

While we clearly need electricity infrastructure upgrades, such as adding capacity and making the grid "smarter" technologically to enhance efficiency and reliability, Gore's call raises significant concerns.

Without advance knowledge of where the most economically efficient generation sources will be in the future (or even if those sources will require a grid), master planners will inevitably miscalculate where and how to build new capacity, at great cost to electricity customers or taxpayers.

Prudent caution, however, is not part of Gore's 10-year plan. We are "called upon to move quickly and boldly to shake off complacency," he told his audience, and "those who, for whatever reason, refuse to do their part must either be persuaded to join in the effort or asked to step aside." He left open the question of what would happen to those who refused to join the effort or step aside.

The message is clear. The federal government will have to choose which technologies should be adopted - and where, force private industry to adopt them, or, if necessary, create the government-run agencies to make it happen.

Factories will have to be retooled; workers retrained; research and development accelerated. Consumer concerns about cost, functionality, efficiency, or convenience will be irrelevant. This is the government, where customer service and satisfaction aren't top priorities.

Most people recognize that, at some point, the Unites States will have to wean itself from oil, natural gas, coal and other fossils fuels. But now is the time for the U.S. to embrace markets and private-sector innovation, not squelch them.

Ultimately, Gore's plan reveals itself as government planning and mandates disguised as national energy policy. Gore, of course, is right in one respect: technology will be the key to solving our future energy needs. But ultimately, technological advancements will be spurred by encouraging private innovation, not by creating an energy bureaucracy modeled after the IRS or U.S. Postal Service.


Samuel Staley is Research Fellow


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