This morning I took the car to work because of the miserable weather in Lexington, and that gave me the welcome opportunity to catch up on NPR for 10 minutes or so. It happened that this 10 minutes was occupied by the brief morning edition of Marketplace, which I usually enjoy because of its digestible approach to covering business and economics news and trends.
But today I was a little concerned by its commentary. Featured was Will Wilkinson, a fellow at the Cato Institute who discussed oil tycoon T. Boone Pickens' plan to push energy independence through expansion of domestic wind power and natural gas. Since I can't turn on, say, MSNBC these days without seeing his commercial, I was curious to hear an economics expert's take on the subject. [Edit: link now available.]
The Cato guy argued that we should reject Pickens' ideas for two reasons: First, the plan benefits Pickens and his wind-power and natural-gas companies. Second, the plan calls for the government to "pick a winner" in the energy market rather than allowing the market itself to reward whichever company/technology is the most efficient.
The first reason is not a reason at all. Why should an energy plan proposed by a businessman be disqualified just because it benefits the businessman? If I invent an engine that runs on human waste and emits only pixie dust and happiness, must I forswear all potential profits if I want to market it, or even lobby the government to require it as a standard in the same way that it mandates a fuel-efficiency standard? I think not. I don't care—and I don't think Americans should care—that Pickens will become even richer as we shift to wind energy and start running cars on natural gas. Power to him (so to speak) for pushing a solution that might benefit us all, and the market should reward him.
But Cato Guy doubts that wind power and natural gas will benefit America. Why? Well, if they were really more efficient than coal and oil, he says, we'd be using them already. Never mind that most of our energy infrastructure, if I had to guess, was put in place long ago based on what seemed most efficient at that time. Now we have a host of new technologies and the ability to take advantage of more materials in more ways, and, more important, the knowledge that the old infrastructure is taking a huge toll on our economy, our environment and our future as a nation. Sure, we'll have to choke down a heavy cost to change all our petrol stations to natural-gas stations, and it'll be expensive to replace natural-gas power plants with wind farms and redirect all the natural gas to the roadside stations. That will surely appear inefficient on Cato Guy's short-term Excel-generated bar graphs. But though I am no energy expert, I believe anything gets America to stop smoking the delicious crack of foreign oil will be better for the efficiency of the whole economy in the long run.
The real reason an outfit like the Cato Institute would try to scuttle this plan is that it isn't marketed to the consumer, which is true. Its ultimate target is the government, via the people who elect it. This does not sit well with libertarians, who seem willing to sacrifice all the benefits of energy independence for the sake of a questionable principle. I tend to agree with the smaller-is-better theory of government, except when it comes to national defense, health care and energy policy. I have no allegiance to any particular energy commodity, but I firmly believe that once the market finds something good enough to replace the unstable and expensive status quo, it's the government's responsibility to aid the market in making it a standard, whether that be a fuel for cars or power for homes and businesses.
I am not yet familiar enough with the Pickens plan to evaluate it, but these radical libertarian arguments shouldn't be a consideration in our country's future energy policy.
Anyone know enough to shed some more light on the plan itself?