Edgelings

Waxman-Markey Flunks Math

WAXMAN-MARKEY FLUNKS MATH by Rich Karlgaard

A couple we know got a rude interruption on Saturday night. The two had settled into their seats at the AMC Cupertino Square 16 theater and were enjoying The Taking of Pelham 123, a thriller remake starring John Travolta and Denzel Washington. But Pelham 123 never finished; the theater lost its electrical power. The cause was a rolling brownout, due to a California heat wave and excessive use of air conditioning.

Electricity is a good thing. It powers your computer, drives economic growth, transmits images from Tehran streets, keeps preemies alive in hospitals, prevents meat from rotting and enchants and cools you in movie theaters.

Yes, electricity is a good thing. Where does it come from?

In the U.S., electricity is produced from these sources. If you are reading this on a handheld and can’t read Wikipedia’s wonderful pie chart, here is the breakdown:

48.9% — Coal
20% — Natural Gas
19.3% — Nuclear
1.6% — Petroleum

Got that? A tick over 88% of U.S. electricity comes from three sources: coal, gas and nuclear. Petroleum brings the contribution of so-called “evil” energy–that is, energy that is carbon- or uranium-based–to almost 90%.

The remaining sources of U.S. electricity, the renewables, are, by comparison, tiny players:

7.1% — Hydroelectric
2.4% — Other Renewables
0.7% — Other

Hydroelectric accounts for 70% of renewable energy in America. But, of course, hydro is mostly tapped out. Almost every dam that could be built has been built. Ironically enough, political opposition to building more dams comes from the same crowd of tree huggers who oppose coal, gas and uranium.

Do you see where I’m going?

The Waxman-Markey bill that passed the House on Friday by a 219-212 margin will punitively tax energy sources that contribute 90% of current U.S. electricity (or 71% if you want to leave out nuclear). The taxes will be used to subsidize the 10% renewable contributors (but really just 3% after you leave out hydro).

In other words, Waxman-Markey is betting the future of U.S. electricity production on sources that now contribute 3% or supply 10 million Americans with electricity. That’s enough juice for the people in Waxman’s Los Angeles County. Or, if you prefer, for Nancy Pelosi’s metro San Francisco plus Markey’s metro Boston.

Well, what about electricity for the other 295 million? You can’t get there from here with Waxman-Markey. At very best, solar, wind and cellulosic ethanol will make 20% contributions by 2025. The smart money would bet on 10%.

Renewable dreamers, such as New York Times columnist Thomas Friedman, believe this magical 3% is somehow different than the 97%. Different in the way the silicon chip is different than the Eniac computer. In other words, they believe the 3% will see Moore’s Law exponential gains that will grow mighty in a decade. That is precisely the bet being made by the giant venture capital fund Kleiner Perkins with its billion-dollar-plus green fund. The firm’s alpha dog and green weeper, John Doerr, is convinced that solar and cellulosic ethanol will see Moore’s Law gains if you assemble the world’s best and brightest minds to work on it.

I see no evidence of that. Now, it is true that solar and maybe cellulosic ethanol have the potential of making bigger technological leaps than traditional sources. But not at the pace of Moore’s Law, or even close.

Meanwhile, traditional sources of electricity that are progressing in the direction of cleaner and more efficient are being ignored (or dissed by Waxman-Markey). Here are two must reads–the first on clean coal by Gregg Easterbrook, the second on fission energy by Robert Metcalfe. Study them if you take electricity production seriously.

Bottom line: There is no way the U.S. economy can enjoy future prosperity without the big three electrical energy sources of clean coal, natural gas and nuclear.