Yesterday’s Wall Street Journal has an article on Obama administration plans that will effectively ban the construction of new coal-fired power plants. While the rules don’t specifically ban new coal plants, they set standards for carbon dioxide emissions at such a low level that new coal plants can’t meet them.
While this may not be a major concern in the short run because natural gas supplies are high, natural gas supplies are only going to stay plentiful if fracking is allowed to continue. The problem is that many of the same people who are effectively banning new coal-fired plants also want to stop, or at least greatly restrict, fracking. Today’s Journal also has an article on a bill in California that is likely to pass and will require state permits for fracking. That could wind up limiting natural gas from fracking.
If unnecessary restrictions are imposed on fracking, energy costs will go up – and that’s bad news for lower income people. The upper middle class can handle the increases. Energy costs are not that big of a part of their budget. Plus they have money to spare.
But for the poor and the bottom half of the middle class, higher energy costs affect their standard of living. If they have to spend more to heat their house, they will have less money to spend on other necessities. We’re not talking about maybe cutting the annual Christmas vacation to the Caribbean by a day; we’re talking about deciding what bill to pay, electricity or food store.
For an example of what could happen if renewable energy is pushed beyond reasonable limits, look at Germany. Germany is phasing out its nuclear plants after the Fukushima nuclear power plant accident in Japan. Therefore, Germany is putting a big push on wind, solar and other green energy. The trouble is that renewable energy is expensive. According to a report in Der Spiegel, an average three-person household will soon be spending 90 euros a month for electricity. That is double the amount they spent in 2000. Whom is this hurting the most? The poor. Charity groups in Germany are calling it “energy poverty.”
I previously talked about “fracking for freedom,” i.e., how gas from our fracking has reduced Russia’s power over countries in eastern Europe. Energy policy affects low-income people, too. It may be nice to try to reduce carbon emissions 50 or 100 years from now. But it’s important to look at how our choices on things like power from coal and fracking affect real people today. By lowering energy costs, reasonably clean coal and responsible fracking can help poor people today by letting them keep some of the money they would otherwise have to spend on electricity and gas. That sounds like a good thing to me.
Comments