NCPA - National Center for Policy Analysis

A TAX TO WEAKEN AMERICA

March 3, 2009

President Obama said last Thursday that he would not cut spending "on investments that will make America stronger."  He really meant that he would pour money into alternative energy projects, paid and incentivized by a cap-and-trade program on fossil fuel use.  The fact is that alternative energy cannot replace fossil fuels, and cap-and-trade imposes a massively expensive tax.  Obama's "investments" will weaken America, not make it stronger, says Iain Murray, a senior fellow with the Competitive Enterprise Institute.

A recent gaffe by Al Gore and United Nations Secretary-General Ban Ki-Moon reveals the inefficiency of alternative energy in stark relief.  In a joint Financial Times op-ed, they claim that the wind energy industry today employs more Americans than the coal industry, 85,000 people compared to 81,000.  This is just not true, even counting everyone employed by the wind industry both directly and indirectly with the number of coal miners alone, explains Murray:

  • The coal industry employs over 1.4 million Americans in all (extrapolating from a Clinton-era Department of Energy source).
  • What this figure actually demonstrates is how inefficient wind energy is compared with coal. The wind industry generated 1.3 million megawatt-hours (MWh) of electricity, while the coal industry generated 155 million MWh.
  • In other words, coal jobs are seven times more efficient and productive than wind jobs.

Thus, it's easy to see how shifting from coal-fired power to wind will impose a significant cost on America.  One of wind power's biggest shortcomings is the simple fact that the wind does not blow all the time, especially on hot days when electricity is needed for air conditioning.  The wind industry unspoken secret is that to make up for this inbuilt shortfall, it needs backup power generation facilities, which use fossil fuels, mostly natural gas.  So the supposed benefit of wind -- carbon-free electricity -- is an illusion. 

How this can make America stronger is hard to see.  If America pays more for energy while its main competitors -- most notably China -- press forward with using the most cost-effective energy forms, America's comparative advantage will shrink significantly, says Murray. 

Source: Iain Murray, "A Tax to Weaken America," Washington Examiner, March 2, 2009.

 

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