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Romney-Ryan Seek to Raise Americans’ Energy Prices: (a) Electricity

September 27th, 2012 · 2 Comments

The Romney-Ryan energy plan has been appropriately castigated for embracing and enshrining fossil fuels while disdaining and dismissing renewable energy systems (and, well, totally ignoring energy efficiency).  (One could say that the Romney-Ryan campaign is rejecting energy from heaven and embracing (with passion) energy from hell.) With mindless ‘Drill, Baby, Drill’ cheering, enraptured sonnets for Keystone XL, and falsehood-driven claims of a ‘War on Coal’, too many seem to be missing fundamental realities about the Romney energy plan: it will raise costs for Americans.

Let’s put aside that executing the myopic embrace of fossil fuels would greatly exacerbate health impacts from pollution, climate change, and other “externalities’ (fossil) foolishly kept out of the contractual price(s) of our energy system. Even without counting these devastatingly serious costs, the Romney-Ryan plan would likely raise America’s and Americans’ energy costs. Why?

  • In capitalism, basic supply/demand curves rule in a clean market space.  Energy efficiency comes in at lower price than energy production in our buildings and in our transportation. Through abandoning any pretense of targeting demand destruction and solely focusing on supply, the Romney-Ryan plan emphasizes the more expensive side of the equation and would put the nation on a spiral of ever-increasing energy costs/prices.
  • When it comes to oil, tomorrow’s oil sources are more expensive than yesterday’s.  Shale oil, tar sands, deep offshore oil, drilling in the Arctic are not only more polluting but also more expensive.  Jed Clampett like discoveries of ‘bubbling crude‘ are a thing of the past.
  • And …

Let’s take a short moment to consider electricity prices.

  • While it seems a Republican mantra that clean energy sources like wind and solar are expensive, this whine turns out to be based on a stove-piped focus on the direct unit prices rather than the system impacts. It turns that the introduction of renewable energy systems are driving down overall electricity prices through shaving down the number of peak electricity hours.
  • The Romney-Ryan pained claims of a “War on Coal” fundamentally misrepresents the situation. Coal demand in the U.S. electricity system isn’t collapsing due to government policy but from a simple reality:  coal cannot compete, on a cost basis, with natural gas nor with energy efficiency.  And, new coal plants are not cost-competitive against wind systems nor natural gas electricity.  Simply put, the market is working to drive coal out of America’s electricity supply.

Consider that point for a moment. The Romney-Ryan plan embraces coal — an energy product that the market is rejecting, even without pricing into the equation coal’s significant health impacts and global warming implications.  With its “War on Coal” rhetoric and falsehoods, the Romney-Ryan campaign (and RWSM) seeks to confuse Americans about the reasons for coal’s unprecedented collapse.

the nation’s electric utilities used 18 percent less coal in the first half of 2012 than they did in 2011, and 27 percent less than they did during the peak year, 2008.

As of earlier this year, coal usage in the electricity industry has fallen to 1986 levels. In fact, coal is now down to roughly one-third of America’s electricity generation and heading lower.  And, this is being driven by market economics — that market which is (after, perhaps, reducing taxes on the wealthiest Americans) seemingly at the core of Mitt Romney’s political agenda.  Coal is falling off the table as a fuel of choice for the electricity industry because, simply, it can’t compete and is more expensive than other options.

By rejecting energy efficiency, by rejecting clean-energy options (that would remove the risks of fluctuating and rising energy prices), by promoting coal as central to America’s future energy system, the Romney-Ryan energy ‘plan’ would raise America’s and Americans’ energy prices.

And, oh by the way, moving beyond energy “prices”, let us be clear:  execution of the Romney-Ryan energy agenda would increase, horribly, the costs of America’s and Americans energy use through worsened health, productivity, environmental, and climate change impacts.

Tags: 2012 Presidential Election · Energy · coal · electricity

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