Monthly Archives: September 2015

Ill-Informed Thinking

Economic forces that make people better off--- present around the world, present across time. A rural market in Assam, India.

Basic economic forces that make people better off are present around the world, and present across time, and true in all social arrangements. A rural market in Assam, India, where trade improves people’s lives.

(Note, 24 Sept. 2015— For what it’s worth, it seems that the Pope agrees with me. From a CNN article— “Amid criticism that he is overly critical of global capitalism and dismisses its place in lifting millions of people out of poverty, Francis acknowledged that ‘business is a noble vocation, directed to producing wealth and improving the world.’  But he cautioned that wealth should be shared and geared to “the creation of jobs as an essential part of its service to the common good.” …Which is right in line with my point here.)

I have “liked” several groups and organizations on Facebook that promote sustainability, and I enjoy perusing their posts as they pop up from time to time. But, as I read the items that they share, it is continually apparent that many, many thinkers on the left edge of the environmental movement have no fundamental understanding of economics. And I’m not talking about arcane elements of high finance here, but rather basic, fundamental, immutable economic principles that should be informing their thinking, but aren’t. To attempt social and environmental solutions that fly in the face of these principles is often a fool’s quest, or, at best, misguided efforts to “reinvent the wheel”.

Take this article, for example, that I saw yesterday— Continue reading

A Tale of Two Energy Futures

Te Apiti wind farm in New Zealand.

The Te Apiti wind farm in New Zealand. About 80% of New Zealand’s electrical power is generated from renewables, making it an example for the world.

I often joke with Mr. X that “I can see the future”. Yes, I’m usually kidding, but the other day I was thinking about an article about energy that I had read, and the future did indeed seem to me to be as clear as a bell. To back up a bit here, the article is by John Mauldin, an economic analyst, and it is his take on low oil prices, entitled “Riding the Energy Wave to the Future“. It’s well worth reading, but if you want the quick summary, here’s my very-short paraphrasing—

Marked improvements in oil and gas production technology (especially fracking technology) are largely responsible for today’s low oil prices, and these improvement trends are likely to continue. As such, prices for oil and gas are likely to remain low. BUT, the same types of innovation are also causing prices to drop in the renewable energy field, especially solar and wind, and the prices there WILL DROP EVEN FASTER. The likely outcome of this, according to Mauldin, is that future energy prices are likely to be low across the board, and that natural gas will continue to eclipse coal and is likely to become a “bridge” fuel between fossil fuels and renewables.

Now, I think that Mauldin’s article is basically on the right track (I wrote about a closely related topic, grid parity, here).

(And now for an aside—this, as opposed to another article I read this week, that I won’t link to, that went on and on, seemingly supported by all the relevant statistics and graphs and written by someone with all the proper credentials, about how low oil prices are a sign that resources have run out and global growth is permanently slowing and will soon collapse. There are thinkers in the peak oil and similar movements who confidently swear that collapse is imminent every single year. Continue reading