In 2008, the General Assembly passed nearly unanimously Governor Strickland’s energy policy which reversed the disasterous (in the words of the conservative Ohio Manufacturers Association) electricity deregulation policy passed in the 1990s (which, ironically, was strongly pushed by… the Ohio Manufacturers Association who later learned to regret their deregulation=better for business myopic world view.) Now, with Governor Kasich in office and complete GOP control of state government, the very policies the GOP supported way back in 2008 is under attack by pro-fossil fuel zealots with their outdated, Stone Age views on energy policy.
Enter Cleveland Plain Dealer columnist Kevin O’Brien, who is praising State Senator Kris Jordan (R-Delaware)’s bill to repeal Ohio’s green energy portfolio which calls for the state to draw 12.5% of its energy by 2015 from renewable energy sources produced in Ohio (unless the mandate causing significant spikes in utility rates, which if it were to occur, the mandate self terminates.) As government mandates go, the green energy portfolio is as toothless as it is necessary.
Ohio has a significant energy and environmental problem. Right now most of Ohio’s electricity comes from aging coal-fired power plants that have been kept in operation by the major power companies for no other reason than if they built modern plants they’d no longer be grandfathered by the provisions of the federal Clean Air Act.
Not surprising, Jordan largest campaign donors outside of Republican political groups, by far, is FirstEnergy, AEP, and the Ohio Oil & Gas Producers, who don’t like competition. Any time a company puts up a solar panel or a wind turbine on its facility, that’s less money (due to less demand and greater supply) the utilities and the other energy producers can collect. It’s not surprising. It’s like why major studios who are tied to the cable movie networks, for example, aren’t exactly jumping to Netflix (I’m looking at you Starz.) Portfolio diversification is a bedrock principle of economic investing, and it should be for energy policy as well. Relying on coal, oil, and gas for energy production inflates energy prices. That’s basic economics. Ohio needs to diversify its energy sources.
But O’Brien gives one of the most historically ignorant economic arguments against green energy I’ve ever read outside of the people who leave comments on the PD‘s website:
The secret of clean energy’s “success” can be found in the U.S. Environmental Protection Agency’s sales pitch for renewable portfolio standards: “An RPS creates market demand for renewable and clean energy supplies.”
Translation: Government creates a market where there otherwise would be none.
Without government to subsidize green energy enough to make it competitive — or, in the case of states with renewable portfolio standards, to make green energy a requirement, whether it’s competitive or not — there would be no market for it.
Oil, natural gas and coal are too abundant, too easily obtained and too inexpensively used to make green energy competitive.
You know the fledging auto industry couldn’t compete with the more abundent, easily obtained and inexpensive act of walking (or horse drawn carriage) until the government started building roads that made car travel faster and more efficient than other modes of transportation. There would be virtually no airline industry without the government building all but one commercial airport in the nation (and the only private commerical airport in the nation was only recently built.)
Although the coal industry hates it, OSHA and Workers Compensation ultimately keeps coal companies in existence by making a workplace that is a) safe enough people will take the job without having to pay even more in wages it would take for someone to take the job without those safeguards in place, and b) limit their liabilities so that they can’t be sued out of existence whenever a very dangreous job goes wrong.
Government regulation is not always a negative economic factor. Goverment energy efficiency standards keep energy demand in check and avoid energy prices that could be a drag on the economy.
It is hardly contraversial or unprecedented for the government to create a market for things that would not otherwise exist. Just think of defense spending. It was the development of radar technology by the military that then lead to the development of the microwave oven. There’s been no greater driver of the Internet’s development than government.
Is the solar panel industry taking it on the chin right now? Yes, but that’s largely due to the Chinese dumping the international market with panels being sold below production costs. Getting rid of Ohio’s alternative energy portfolio would actually assist the Chinese in the dumping strategies rather than expand the marketplace for solar panels such that the Chinese cannot continue with their dumping practices.
And if O’Brien thinks Ohio should stay out of a “command-economy mode,” then why won’t he say the same thing about JobsOhio? If there was any State government program that truly reflected a command-economy, it’s JobsOhio, which has a far greater reach and control over the free market than an alternative energy portfolio standard that is more aspirational than dictorial and contains its own self-destruct clause.
Ohio cannot have a future if it does not lead on the development of alternative and renewable energy. Just look at Toledo which has become a major center of solar energy technology production. Coal is like walking. It’s cheap, accessable, and won’t get this State anywhere fast. It’s time we start paving our economic road for new energy technologies.
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