Killing the Economy to Allegedly Save the World: The Present Failure and Future Promise of US Energy Policy

by Spilman Thomas & Battle, PLLC

The pursuit and articulation of any type of “policy” is, by nature, aspirational. Societies via their governments, and to some degree private institutions, identify conditions they would ideally like to see actualized in some area considered important to the society’s good order, health or prosperity. They then try to set conditions in law or other societal arrangements in order to promote or create incentives (and/or disincentives) for making those desired conditions a reality. Any nation’s energy policy, to the extent that it is even formalized, is in practice (even in non-market economic systems) driven by a goal of expanding the amount of available energy, from as many sources as possible, at the lowest cost, in order to maximize economic activity and improve the quality of life of the nation’s citizens. This is true whether the societal unit is a primitive tribe seeking firewood or a modern industrialized society seeking power generation, energy for smelting steel or for manufacturing circuit boards for iPads.
Why? Contemporary society has grown alarmingly disconnected from the economic realities that provide its members with the quality of life to which they have grown accustomed. Energy is the fundamental component in all economic activity, especially in modern economies. There is an energy component built into the market price of virtually every good or service in commerce. How large that energy component is varies from product to product. However, in the aggregate, increases in energy costs, particularly dramatic ones, will negatively impact consumer spending power and quality of life. The negative effect can be significant, especially in periods of economic recession when individual income is more constrained. This may be stating the obvious, but in the industrialized West, particularly the U.S. (excepting for gasoline prices at the pump), we have become so accustomed to not having the cost of energy being something acutely felt (due largely to abundant and affordable energy sources such as coal) in the *29 unit cost of goods, that it has to date been a relative non-issue. As a result, the general public, especially in the U.S., has little functional understanding of how much their quality of life is secured by low cost energy.
This oversight has become more and more illuminated due to an increasing amount of policy initiatives keyed to the concerns of the environmental activist community. Since the late 1970s, a drumbeat of alarm over allegedly anthropogenic (i.e. “man-made”) global warming--re-branded of late as “climate change” and/or “climate chaos” (hereafter “AGW”)--has been steadily increasing. According to the theory, human industrial production of carbon dioxide (“CO2”) is driving a general warming trend of the planet. Various doomsday scenarios are touted as likely outcomes of AGW if human industrial sources of CO2 are not radically curtailed. A critique of the science behind AGW will be discussed later on. However, it is worthwhile to step back a moment and briefly review how U.S. energy policy has become so heavily influenced by the environmentalist agenda.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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