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The Right Alternative Energy Policy is Critical to America’s Survival, the Wrong Policy Could Hasten Her Fall

A buddy of mine built his Taekwondo studio several miles from the nearest city sewer system. However, city policy required him to connect to the sewer rather than to use a much less costly septic system. The additional cost imposed by the city to run several miles of pipe that would be large enough to handle the sewage of the population that would eventually make its way out toward his studio made building at that location cost prohibitive given their regulations.

This example demonstrates two things; one the cost of regulation sometimes means the loss of otherwise viable businesses. Second, the way America goes about infrastructure development can impact how we view the competitiveness of businesses. In the taekwondo example, this man belongs to an association of over 1,300 studios and has the most profitable of all the studios in the country, yet the irresponsibly misplaced infrastructure policy of the city made it appear otherwise.

When I left the energy industry back in the ’90s, the cost of electricity made from wind was about 160 percent of the cost of that made from natural gas. Therefore, based on economic proformas, no business would logically invest in wind power. But what made wind energy more expensive? For one, the cost of placing electric lines out to wind projects to connect them to the grid made them less economical. Certainly, if there were much larger wind farms using the same electric grid, the cost of connecting would have been much less and the viability of wind much greater.

Another issue with looking at alternative energy purely from an MBA’s spread sheet is that it does not care about the nation state, only the industrial state (our burgeoning multinational corporations). When two thirds of the cost of an oil fired power plant’s electrical energy is sent to Saudi Arabia, the transfer of wealth from America to the Saudis is not reflected in the calculations. The above the line profit benefit may be greater to the company with oil fired power, but that may not translate to the economic benefit to our nation state, America. Without understanding that the two motives are different, the United States will continue to be dictated to by nonaligned motives of our MNCs to the detriment of our future viability as a nation state.

Additionally, by not looking at the potential lifecycle cost of oil as it relates to the exponentially growing demand for oil and the parabolic reduction in supply of this dwindling resource, we are potentially creating a nationally damaging bias toward hydrocarbonically created electricity. Hydrocarbon fuels are facing an exponentially increasing price that is not reflected in current utility business models that base decisions on relatively short time frames. At some point, the exponentially growing price of hydrocarbons will make the less steeply growing price of a more highly capitalized alternative energy plant competitive even from an MBA perspective.

This potential presents several issues. First, if America is caught off guard by quickly rising foreign fuel prices having failed to invest in alternative energy technology and having failed to build the capacity to react quickly with new sources of energy, the cost to America of much higher energy prices over a long ramp up time will be much greater than the additional cost of investing now to create a technological base for alternative energy.

However, the way we go about investing in alternative energy is just as important as the fact that we should be investing now. A recent post discussed that China was building a wind energy farm in Texas. How is America building technological expertise when we export technology development to China? How is America reinvesting maximum dollars back into American resources by investing in China’s wind energy company? This is one simple example of how a national strategy of alternative energy development can have a horribly ironic and ineffective implementation when the overall goals of our national strategy are not carried out through all aspects of development.

If we are to achieve a sustainable America into the 21st century, America must vigorously pursue an energy policy designed to enhance our nation’s core skill in producing alternative energy. It must think in terms of the nation state and not our highly political and well lobbied industrial states. It must pursue scale of grandeur that creates economies of scale instead of continuing to compare projects on a flawed vision of limited size. America will soon face a future of capacity limited by our failure to plan for diminished hydrocarbons and our short sided vision, resulting strategies, and flawed implementation driven by highly manipulative industrial states that our courts have given citizenship status could be our down fall if we do not recognize it in time to react.

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Filed under American Innovation, U.S. Energy Policy

Ensuring a Sustainable World Will Create Significant Job Opportunities.

As wealth continues its transfer from industrial to emerging nations, if war does not return the world to a dark feudalism well before political, economic or physical limits are reached, at some point the entire world could reach a balanced standard of living.  What GDP would the western world would have to accept to achieve a balanced world economy?  Calculations, using today’s technology and known resources, suggest that a balanced living standard would be about one quarter the output of western nations today. For the sake of citizens of wealthy nations, who like I feel entitled or at least hopeful that we will maintain our material well being, I am rooting for innovation and exploration to vastly improve that balanced trajectory.

Futurists state that resources such as energy, water, and food may be among the factors that will limit the entire world from achieving the wealth frontier boundaries that have been set by western society. America can and should innovate to keep these barriers from limiting a higher world parity.  In creating solutions, we can build national core skills and provide jobs for Americans in the process.

While an economical solution to drawing and storing mass energy from the sun does not exist, and while the world still fears nuclear, innovation should unlock today’s yet unknown energy solutions to keep energy from being a limiting factor. Wind and solar electricity cost twice that of coal and natural gas, and electric grids are limited in areas of the United States that could produce most efficiently. However, as the oil era wanes, our future energy shortfalls are eminently more solvable than a shortage of sperm whale spermaceti seemed to America as the era of blubber energy was forever expiring.

Current technologies exist today to extend water capacity, to conserve water usage, and to create potable water for much of the world.  As an example, today’s power plants release 70 percent of consumed fuel as inefficient heat back into the environment.  Cogeneration plants can capture much of this wasted energy to convert the world’s seas into potable water. In a world filled with sun and water, the future brightness of tomorrow’s innovators should solve energy and water shortages.

 Even as America is touted as the bread basket of the world, the future will look back on our modern technologies as unsustainable just as we look back on the industrial pollution of the 1960’s as an unsustainable abuse. The world will question why we didn’t see how our food production processes were depleting soil, relying on too few strains of genetically produced seeds, and altering humans’ ability to resist disease from our livestock antibiotics.  However, globalization will create the need to transfer the best parts of America’s food production capabilities to other countries and to cause the world to restrict rich soil areas to food production, easing at least short and mid-term food pressures.

I am most concerned about the byproducts of innovation as a limiting factor. For instance, what are the effects on codependent species such as bees and birds of immersing an entire world in communication waves? What will be the effect of weakening the collective immunity of the world through pervasive use of antibiotics and antivirals? And while no-one has definitively linked the explosive acceleration of both number and scale of natural disasters to global warming, what will be the tipping point that creates an unstable environment for mankind?

These issues require a forward focus.  America can capitalize on solving tomorrows economic, environmental, and world sustenance issues before they become crises.  America can create national core skills the unite the world before our common sustenance needs divide the world into civilizations competing globally for antiquated solutions, or worse that plunge the world into a war of survival.

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Filed under American Innovation, Full Employment, World Sustainability