Last Sunday in The New York Times Tom Friedman talked about the “natural gas revolution in America”. Horizontal drilling, seismic imaging and “fracking” are greatly increasing the supply of natural gas, which is cleaner than the coal it is replacing, and which is getting cheaper and cheaper. All in all, it sounds like it ought to be a win-win.
But there’s a problem, at least in the minds of some people. While you would think cheaper and cleaner energy would be great, some people worry that cheap natural gas is making it harder for things like wind, solar and other renewable energies. Even though natural gas is cleaner, it’s still not a zero in terms of emissions. And for some of the people mentioned in Mr. Friedman’s article that seems to be a problem.
You get the feeling some of these people are so in love with the concept of renewable energy that they would rather natural gas prices had not come down. One of Mr. Friedman’s experts wants government to continue subsidizing and encouraging renewables, even though (because-?) natural gas is way cheaper.
But while the proponents of renewables like to talk about clean energy with zero emissions, what they don’t talk about is cost and price. To see what a full-out push for renewable energy could result in, look at Germany. After the Fukushima nuclear disaster in Japan, the German government moved to accelerate the date for phasing out all nuclear power plants in Germany and to replace them with renewable energy sources wherever possible.
The only trouble is, as Der Spiegel reported back in June, nobody thought about the costs of the accelerated phase-out. Electricity prices have already risen by more than 10% since 2010 and more increases are coming. In order to provide subsidies for renewable energy, Germany adds a surcharge to electric bills. So much is being spent for subsidies, that this fall the surcharge on consumers’ electric bills is going up from 3.59 cents per kilowatt hour to 4.7 to 5.3 cents per kilowatt hour. Consumer groups and others are starting to talk about “fuel poverty” in Germany. A social worker at a social services organization in Berlin said, “In the past, at most one client per month came to me because of problems paying energy bills. Now it’s at least 30.”
When the program and the surcharge were originally proposed, many politicians did not seem to care about the costs. According to Der Spiegel:
“The situation didn't seem to bother the center-left opposition Social Democratic Party (SPD), which was very much caught up in the green spirit of times. … There was no need, the SPD felt, to get worked up over a few cents here and there. The Green Party, meanwhile, took the position that it was necessary to make financial sacrifices for the sake of the ‘environmental transformation of society.’”
This almost seems like what you are hearing from some of the people in Mr. Friedman’s article. Renewable energy is more important that inexpensive energy. Maybe that works if you are upper middle class and a higher electric bill is just another little luxury. It doesn’t work as well, however, if you are trying to survive on a budget, and lower electric bills would help you afford other things you really do need.
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