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More on energy pessimism
Paul Krugman writes:
You might say that this is my answer to those who cheerfully assert that human ingenuity and technological progress will solve all our problems. For the last 35 years, progress on energy technologies has consistently fallen below expectations.
It's worth noting that if we had to build today's energy infrastructure working under the current regulatory and NIMBY burden, it probably could not be done. So it shouldn't be surprising that building a new energy infrastructure is proving so hard. There's a reason why many of us think deregulation is a big issue and it's not because we want to see people poisoned by Chinese botchagaloop.
Posted by Tyler Cowen on April 22, 2008 at 01:33 PM in Economics | Permalink
Comments
I'm starting to think that the more we answer Krugman's idiotic rants, the more incentive he gets to keep writing increasingly dumber ones. The wishful thought is that if everyone stops responding to him, he'll quietly go away.
Posted by: Richard Koffler at Apr 22, 2008 1:38:50 PM
Richard,
While you may be right in principle, you are wrong in practice. Krugman is right here and Tyler hits it on the head. We had "great expectations" in the 50s and 60s and then the environmental movement (no bad thing, overall), stopped that one cold. Now that we ALSO have expensive energy, we cannot waste it in teh old plants nor build new ones. We may all be "frutarians" soon -- living on what falls from the trees.
Posted by: David Zetland at Apr 22, 2008 1:44:10 PM
Krugman has a good point:
I’d actually suggest that this is true not just for energy but for our ability to manipulate the physical world in general: 2001 didn’t look much like 2001, and in general material life has been relatively static. (How do the changes in the way we live between 1958 and 2008 compare with the changes between 1908 and 1958? I think the answer is obvious.)
Posted by: Lemmy Caution at Apr 22, 2008 1:59:07 PM
IMO, the Internet alone eclipses all other achievements between 1908 and 1958.
Posted by: Andy at Apr 22, 2008 2:32:21 PM
A solution to high petroleum use and spending is for some non-old people to commute in something like the BMW c1 200. We have plenty of technology that could used to reduce consumption as cost people's utility. The BMW c1 200 or the Tango narrow car's congestion reducing could balance its less utility as far as comfort goes. Seems less than horrible to me.
As far as home energy use the Hallowell's cold-climate heat pump has some real potential to reduce fuel consumption. Also in warm weather we through away heat from our air-conditioners that could be used to heat water.
Lots of other stuff too that could bring big savings at fairly low cost.
Posted by: Floccina at Apr 22, 2008 2:40:10 PM
This reminds me of the assertion, whether true or not, that today aspirin could never win FDA approval.
Posted by: KipEsquire at Apr 22, 2008 2:48:39 PM
Things have improved mightily since the 1950's as far as air pollution goes. No more coal furnaces. Our car got 8 miles a gallon in 1959. Now it gets 30 mpg. More and more power comes from electricity which is more efficiently produced. Waterways are being cleaned up. Fish are returning to lakes and rivers. Industrial polution is being reduced.
The biggest obstacle to furthter improvement besides the US Congress is Al Gore's 13 wood-burning fireplaces. Pollution doesn't bother liberals everywhere. You can't breathe the air around O'Hare Airport now in Chicago but they want to add another 800,000 flights per year. Also, they added 2 lanes to the Dan Ryan Expressway. For more cars of course. The politicians want to let BP to continue to pollute Lake Michigan. They say on thing. Do another. Krugman is totally divorced from reality. He is either a fool or a liar.
Posted by: jorod at Apr 22, 2008 2:49:18 PM
Also for the last 35 years, the price of oil has mostly fallen below expectations (until the last couple of years). I suspect the "lack of progress" on technology might be partly related to that.
Posted by: ed at Apr 22, 2008 2:54:16 PM
Krugman says "progress on energy technologies". This sounds more like R&D to me. If the argument is that regulation, NIMBY, etc., is preventing let's say building new refineries, or bringing a new nuke plant on line I could buy Cowen's argument more, but I don't understand the relationship between regulation and emergence of new technologies. I suppose one could argue that it's too hard to meet existing regulatory requirements but that seems like a bit of a stretch to me. Just sayin'.
Posted by: Scot at Apr 22, 2008 3:00:59 PM
Re: regulatory burden.
What a bunch of hooey. Before it went bust, Calpine was building natural gas powerplants in California at a tremendous pace. Deregulation has made owning the transmission lines a low-margin business leading to bottlenecks and underinvestment in infrastructure.
One reason that regulatory burdens exist is that clean air and clean water are remarkably popular among the voting public.
Another reason regulatory burdens exist is that the voting public pretty much insists that electricity be just about 100% reliable. That kind of reliability cannot be achieved in a deregulated marketplace, especially given the monopolistic nature of retail connections.
Those of us who work in heavily regulated industries, and leave our entrenched ideologies at the door of the workplace, understand that regulations largely arise out of popular support. Deregulation is far too often waved around as a club to bash "liberals", when support for the programs is bipartisan.
If a client is committed to a project and willing to build the political support for it, just about any project can be built, even highways.
And when projects fail, there's usually a pretty good reason. Yucca Mountain, for example, has much more water flowing through it than originally expected.
Tyler, do you have any factual basis for your claim?
Posted by: Francis at Apr 22, 2008 3:01:45 PM
For the last 35 years, progress on energy technologies has consistently fallen below expectations.
Whose expectations? It's also critical to note that the cost of energy during roughly 30 of the last 35 years has consistently been below expectations (especially the expectations of 1970s resource alarmists) -- oil was $30/barrel as recently as 2004 and $16/barrel as recently as 2002. I wouldn't expect full-blown efforts to develop alternatives when oil was cheap (or seemed likely to become cheap again soon).
It's only very recently (as in the last couple of years, really) that investors in alternative energy technologies could be reasonably sure that oil will remain expensive enough for their prospective technologies to be viable.
Posted by: Slocum at Apr 22, 2008 3:03:19 PM
He says "2001 didn’t look much like '2001'"; I don't get it. Human ingenuity is at fault because the life we lead today doesn't resemble the 50 year old wet dreams of some science fiction writers?
And, "how do the changes in the way we live between 1958 and 2008 compare with the changes between 1908 and 1958?" The answer is obivous? Certainly, but to deny that today is significantly different in a very real way from 1958 is to ignore the evidence that surrounds us. The basics may be similar, but very little of what we do today could have been back in 1958. Computers, the internet, ipods, cars that get more than 10 mpg, food from around the world, space tourists, the list goes on, and on, and on.
Yes, we haven't made as much progress as we would like, but we shouldn't deny the progress that has been made and that includes progress in energy technology.
Posted by: JaeTex at Apr 22, 2008 3:16:17 PM
Environmentalists are the new priestly aristocratic caste. They are an elite using religious superstition to oppress and impoverish the masses.
What the world needs is a good French Revolution. What was that old phrase: "Men will never be free until the last king is strangled with the entrails of the last priest."
The religion of environmentalism needs to have a stake driven through it's progress-destroying heart.
Posted by: jim at Apr 22, 2008 3:38:32 PM
2008 may not superficially look terribly different from 1958, but certainly the changes are tremendous. Just think of the advances in medicine. In the 1950s the mortality rate for children with leukemia was about 100%. Now the survival rate is around 80%. This is something that is not as readily obvious as the advent of cars that took place between 1908 and 1958 but is every bit, if not more, impactful. Add to that widespread computing, cell phones, televisions, the internet -- it's mind-boggling.
Posted by: Colin at Apr 22, 2008 3:44:50 PM
Let me get this straight Tyler, you'd really prefer a parallel history with more Superfund sites?
(There are cranks on one extreme who think all Superfund sites contain nothing but imaginary risks, but I'd have not pegged you as one of those. Ye Gods! How many Chinese are now being poisoned by their own "botchagaloop" for the very reason that they don't have a strong EPA?)
Posted by: odograph at Apr 22, 2008 4:01:32 PM
Note: anyone who disagrees with me has obviously been poisoned by the botchagaloop and is not thinking straight.
Posted by: odograph at Apr 22, 2008 4:04:19 PM
This graph has been pointed put here before, but some people seemed to have missed it. The history of the introduction of new technologies to US consumers make clear that the last 50 years has not been very impressive compared to the previous 50. Also most of the improvement in life expectancy over the last 100 years took place before 1950.
http://www.visualizingeconomics.com/2008/02/18/
adoption-of-new-technology-since-1900/
Posted by: joan at Apr 22, 2008 4:09:31 PM
Whose expectations?
Maybe you could just read Krugman's article:
Posted by: lemmy caution at Apr 22, 2008 4:10:30 PM
2008 may not superficially look terribly different from 1958, but certainly the changes are tremendous. Just think of the advances in medicine.
1908 to 1958 was no slouch in the medical innovation department either.
Posted by: Lemmy Caution at Apr 22, 2008 4:30:48 PM
Joan: "This graph has been pointed put here before, but some people seemed to have missed it. The history of the introduction of new technologies to US consumers make clear that the last 50 years has not been very impressive compared to the previous 50."
I certainly disagree. The simplistic graph you reference says nothing about the quality of goods being offerred to consumers. Anyone who was alive during the 1950's knows about the amazing quality increases of goods such as television, automobiles, household appliances, and sporting goods. Of course, the truly significant technological increases were not in consumer goods but in medical technology, communications infrastructure, commercial computer applications, transportation, construction equipment, agriculture technology, food processing, and much more that supported consumers behind the scenes.
Regardless of one's opinion about the morality of warfare advances, there is no question that today's U.S. soldier faces a fraction of the risk as did those in the 1940's, 1950's, and 1960's. Advances in military technology have been mind-boggling.
Can anyone who has actually experienced technological progress of the past 50 years - as opposed to those who view it through graphs and charts - truly claim that the past 50 years have not been impressive?
Joan, would you consider watching a few episodes of the History Channel's Modern Marvels series in order to gain an understanding of recent technological progress? Those programs would reveal much more than anyone could ever gain from a dozen lines on a graph.
Posted by: John Dewey at Apr 22, 2008 4:54:29 PM
I will take a cell phone with internet and three of my friends who are good at Guitar Hero 3, and I will build Mr. Krugman a wind farm.
So we're not walking circles in a space station... who cares? Hal wouldn't open the pod bay doors, anyways. What an economist should mention with respect to this topic, even if just in passing, is that a slowing growth in energy technologies made way for more important advancements in information technology-- advancements which enabled Krugman's rubbish to appear on my Kubrickesque iMac in front of me.
Posted by: mpkomara at Apr 22, 2008 5:23:36 PM
100 years ago most people lived on farms, plowed the fields with horses, used outhouses, had no refrigeration other than ice, no ballpoint pens, no indoor plumbing, no electricity, no radio, no computers, women had babies at home, people rarely saw a doctor, children died from pneumonia and flu quite regularly, had mostly gravel roads if any, had one room schoolhouses, drank unpasteurized milk and juices, and many still lived in log cabins. How did the human race survive the last 7 million years?
Monopolies cannot exist without government collusion... Milton Friedman
Bucky Fuller wrote a book in 1971 called "Utopia or Oblivion." In it he said nuclear power was the panacea for all our energy problems. Yeah, it looks good on paper but it is an engineering nightmare.
On the other hand, commodity prices were realitively low between 1980 and 2005. Since then however, commmodities, especially oil have skyrocketed. Of course, India and China have become major consumers of energy since then. To adjust to this, new supplies will have to come on-line. A new pipeline is being built between Colorado and Ohio for natural gas. There is plenty of coal available to run electric power plants and conserve oil. Of course, the global warming freaks won't like it. And Congress won't let anyone drill for oil.
To see how the public is jerked around by the likes of Krugman, read "Hoodwinking the Nation" by Julian Simon.
NIMBY at work: Canadian National railroad wants to buy a rail line around Chicago to avoid the congestion in the Chicago railyards. People are up in arms about increased rail traffic in their little towns. God only knows when if ever the acquisition will be approved. Everybody complains about shipping costs. But try to make the system more efficient and everyone fights you for one reason or another. Human nature is naturally obstructionist and resistant to change. NIMBY rules.
Posted by: jorod at Apr 22, 2008 5:48:00 PM
Railroads, jorod?
"RAILROAD TO PAY $13M TO SETTLE LIABILITY AT SUPERFUND SITE"
WASHINGTON, D.C. -- The Department of Justice, the U.S. Environmental Protection Agency, and the State of Louisiana today announced that they have reached a $13 million settlement with the Alabama Great Southern Railroad Company to resolve the railroad's share of liability for the cleanup of massive environmental pollution at the Bayou Bonfouca Superfund Site in Slidell, Louisiana.
http://findarticles.com/p/articles/mi_pjus/is_/ai_1120523497
Man, why won't the NIMBYs leave them alone!
Posted by: odograph at Apr 22, 2008 5:51:58 PM
Ed and Slocum have got it exactly right. Many, many alternative energy ideas have been stalled by ultra-cheap oil.
The other big deal IMO, since Krugman mentioned breeder reactors, is the executive order forbidding exactly that. That alone has hugely compounded the nuclear waste problem.
Posted by: Mitch at Apr 22, 2008 6:09:49 PM
Mitch, have you thought about how much money it might take to make a research area fully funded? Billions have been spent on alternative energies in the last three decades ... is it anything other than faith that more money would bring more results?
Bush, not exactly a big-government fiend, pledged $1.2B to hydrogen cars alone, in his years alone. And we (as well as the Germans and Japanese) have been spending steadily on wind and solar.
No "mythical man months" in energy? Simply spend more, suddenly, and get more?
I'd worry, that with say $1B dropped in an area, you might have a pretty good idea of how well it will work. If you drop a few billion and people are still throwing out blue-sky ideas ... you might worry.
Posted by: odograph at Apr 22, 2008 6:30:45 PM
