The post here this past Friday makes the main point that electrification over fueling needs to be the long-term policy for a successful economy. For Americans, where this blog is written and the inputs of knowledge, wisdom and the suspicions of many converge, there remains from some people a concern that America has lost its “edge.” We’ve been through this before, when the Soviets launched Sputnik, when the first oil embargo in the 1970s slowed growth, and when the ominous “Rising Sun” opinion about Japan becoming the new technological and economic superpower got into the public’s perception.

Americans answered each time, eventually, with NASA launching men to the moon triggering a tidal wave of technology that washes over the earth to this day, policy mandating more fuel efficient cars while enforcing cleaner air and more occupant safety, and backing the microprocessor revolution with innovation and creativity with lots of gut wrenching risk for the early backers. So to say the Americans are in a bad way may be so, but it won’t last.

There is a lot of ammunition for the economy and the firepower of the economy to use it is second to none of any comparison contemporary or in history. What’s lacking is the leadership and the public attention. American public opinion in the age of the Internet is much more diffused, and formerly important power centers of major media much weaker. Yet the public attention will come to the American view of common sense, leadership can help, perhaps even guide, but those Americans will decide, individually and over time as some form of majority. It’s just that somehow the ammunition has to get in the chamber to be fired.

To be active in forming policy an activist needs to be realistic and not overshoot the common sense of the American Public. Whether one’s interest runs to wind or biofuels or fusion or any one of many routes to abundant low cost energy, realism has to be put up front to gain credibility. Each field has its perimeters; biomass taken to the furthest degree would require a concentrated construction effort lasting many decades. Wind needs off breeze storage, and at a handful of megawatts each, decades again to take a dominating role. The message is that each will contribute, but not one alone is a panacea or silver bullet solution.

Realism also reminds that the capacity of today isn’t put to full use. Electrical power generation in the U.S. in off peak hours can easily displace oil imports over time. Moreover, the gains that technology may be offering will increase the amount of power available. The asset is already there. More power is coming whether from wind, ocean wave, biomass power generation or better or upgraded atomic fission, perhaps a fusion breakthrough and more geothermal investment. The issue isn’t about there being enough, it’s the timing and tools to use it.

The optimal policy would be to minimize the pain of transition and maximize the payoff from making it. A policy that increases the cost of fuels and energy backfires on the transition as it consumes the cash that would go to investing in the transition. That may sound counter intuitive, but when the monthly earnings go to buying costly energy and fuel the money isn’t there to buy into alternatives, transitional tools like new appliances, cars and infrastructure. Taxing or otherwise pushing prices higher is a hugely destructive option.

Policy that drives new investment compels the transition when the policy guides to investing in more “work” or “miles” or however the job is measured, per dollar. That’s where incentives need to be. The reverse of disincentives can also be applied; the market might need a push such as an annual registration fee based on the mileage per fuel unit for a vehicle that gradually increases to beyond a supportable cost. Thus, the least efficient can be driven from the market and replaced by the most efficient.

The cautionary function today is to point out that the more specific by energy, fuel, industry, product, etc, the more the special interests and advantage seekers will gain sway and subvert the actual goal. So far, the goal looks like a huge push for electrification and leaving chemical fuels behind. While over decades that would be the inevitable case, the real issue is to drive down the cost of powering work by our tools as quickly as possible. The goal isn’t exactly that same as the policy, rather the goal is to ignite a big economic growth period.

Electrification offers the best path. With off peak power available, efficiency gains, new sources in generation, an existing infrastructure that needs improved and growth rather than built from scratch, and the innate efficiencies of electric motor drives, that path seems to this writer, the most obvious.

Policy tends to become lost in the public’s mind and replaced by goals that are good for everyone. A simple goal would be to get the American public to 50 miles per dollar for traveling. Another would be to cut the cost of an American joule by half every four years, much as microprocessors double up their power in just months and have been doing so for years.

In any case, you the readers, by thinking it through and discussing the matter with others will create the driving force to the next American Boom Time. Whatever you decide is the sensible thing to do is the most likely thing that will happen, and the sooner we get on with it that sooner it will happen.

All the world is watching – the American consumers, voters and investors will make the calls that matter for the decades to come, no doubt, as America is by far the largest market on earth. We’ve sort of ignored OPEC and the Axis of Oil groups and circumstances have finally caught up with us.

But change is what builds an economy, creates new jobs, increases wealth and provides opportunities. Count me in. I’m looking forward to more, better and cheaper.

Other Recommended Views:

Brian Wang at Next Big Future

Fareed Zakaria, The Future of American Power, May/June 2008. Foreign Affairs Magazine.

What do you think?


1 Comment so far

  1. Al Fin on April 28, 2008 8:38 AM

    Nice post with some excellent points.

    Too many people view “change” as a magic wand, when the word is only a euphemism. When a political candidate promises “change” it is with the understanding that voters will imagine and visualize only “good change”, the type of change they wish to see. In reality it is bad change that occurs more often than not, when people are stuck in a wishful thinking mode.

    The amount of intelligent planning and well-directed hard work required to bring about “good change” in the energy picture is beyond any government of the world. For “activists” to expect government policy to be a large part of any good answer is to be unspeakably naive.

    There are still a lot of bright and hard-working people in the private sector and in research labs, fortunately. It is probably a matter of smart action counter-acting bad government policy from here on out.

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