Streetwise Professor

January 24, 2012

Lead? How ‘Bout Get Out of the Way Instead?

Filed under: Economics,Energy,Politics,Regulation — The Professor @ 4:23 pm

Obama is apparently going to make energy one of the centerpieces of his State of the Union Address (oh for the days when presidents mailed it in–literally).  If it is anything like the gas he emitted at last year’s SOTU, or anything like what is on the WH energy policy page, it will be at best irrelevant and at worst counterproductive.  CAFE is incredibly wrongheaded.  HOMESTAR is an expensive joke.  “Recovery Act Investments”?:

The Administration has invested more than $90 billion in clean energy – the largest clean energy investment in our nation’s history. These critical investments have already created or saved hundreds of thousands of jobs across the country and put the United States on a path to double renewable energy generation from 2008 levels by 2012. In fact, since 2008, more than 20,000 megawatts of new electric generating capacity from wind, solar and geothermal energy have come online, increasing installed capacity by more than 70 percent.

The idea behind investment is not the amount of money you put in, it’s the return you get out.  And these investments by Chu Capital (again, props to Paul Gregory for this felicitous phrase) are generating substantial negative returns.

So again, the Administration That Can’t Tell a Cost From A Benefit. [Also note the typical renewable dodge, focusing on “installed capacity” as opposed to energy generated.  The former number looks much more impressive than the latter: the difference between the two often makes renewables look very bad indeed.]

Renewable energy projects on Federal lands?  Another boondoggle.  And no mention about the fact that vast amounts of conventional energy sources are on public lands, and could be produced cleanly and safely–but are off limits.  And I seriously doubt we’ll hear anything about changing that tonight.

Obama is reportedly going to tout increased domestic production of natural gas.  Here he is playing the familiar role of sprinting to the front of the parade that he had nothing to do with creating, to make it look like he led it all the time.

No, neither he nor his administration nor government more broadly had much at all to do with that which has transformed the gas market, and is in the process of transforming the oil market.  The best thing he can do now is stay the hell out of the way.  The industry is doing quite fine on its own, thank you.

And that would be a good idea more broadly, with respect to energy.  Picking winners, picking technologies, picking fuels.  All things the market can do much better.  The Reagan administration’s best energy policies were to undo the insane energy policies that previous administrations and Congresses had put in place.  In that regard, Obama has a lot to work with: there are scads of insane energy policies currently in place that could use a good junking.  But since many of those are Obama administration brainstorms (or more accurately, brain cramps), that’s not going to happen.

So my bet is you will hear a lot of words about energy tonight.  Constructive action–not so much. Indeed, given past form, more counterproductive initiatives are a better bet.

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6 Comments »

  1. OMG

    Comment by pahoben — January 24, 2012 @ 8:24 pm

  2. Luger must be up for reelection. He is sitting on his hands.

    Comment by pahoben — January 24, 2012 @ 9:01 pm

  3. […] All they have to do is get out of the way. […]

    Pingback by Wednesday Breakfast Links | Points and Figures — January 25, 2012 @ 5:26 am

  4. Actually, some of Reagan’s best energy policies were to accelerate implementation of policies enacted during the Carter administration: namely oil price decontrol and natural gas price decontrol. Of course other good Reagan policies were repeal of policies enacted during the Carter administration, like the Fuel Use Act. Removing the Carter era solar panels was more symbol than anything else, but of course so was their Carter era installation in the first place.

    Comment by Mike Giberson — January 25, 2012 @ 7:29 am

  5. http://www.atimes.com/atimes/Middle_East/NA26Ak02.html

    Pepe Escobar on Iran’s oil for gold deal

    Comment by Mr. X — January 26, 2012 @ 4:36 pm

  6. Moron X -Israel Shamir and Pepe Escobar – His article, ‘Get Osama! Now! Or else…’, was published by Asia Times Online two weeks before the terrorist attacks of 11 September 2001; in it, he claimed that Al Qaeda was in tatters.

    Left-wing fascisms messenger Pepe Escobar – Follow the Putin- Al-Qaida -KGB narrativ or we strike you – We want sky high oil prices or we strike you .

    http://en.wikipedia.org/wiki/Left-wing_fascism

    Comment by Anders — January 27, 2012 @ 12:11 pm

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