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  • Two Very Poor Analyses

    Posted by David Foster on February 3rd, 2017 (All posts by )

    Forbes ran an article with the headline “Solar employs more people in US electricity generation than oil, coal, and gas combined” and goes on to say “It’s a welcome statistic for those seeking to refute Donald Trump’s assertion that green energy projects are bad news for the American economy.”

    Unmentioned in this article is the point that energy production is not done for the purpose of energy production; it is done for the purpose of energy use…and production modes which are more expensive tend to cost jobs downstream.  If an excessive emphasis on solar and wind cause electricity prices to rise significantly, the negative impact will fall on those who work in manufacturing and other fields that are energy-intensive.

    To take an extreme case, one could easily create millions and millions of jobs in energy generation by requiring that all electricity be generated by human beings turning cranks connected to generators.  It is silly to look at job-creation as a good thing in isolation, without considering factors other than the number of people hired.  The Forbes article also neglects to mention the point that in most technologies, and certainly in electricity generation, the construction phase of a plant generally requires a lot more labor than does the ongoing operation of that plant.

    An even lower depth of mediocrity is reached in this International Monetary Fund article:  Counting the cost of energy subsidies.  This study considers traffic congestion and vehicle accidents as ‘externalities’ from fossil fuel usage.  In reality, of course, the replacement of all gasoline-and-diesel-powered vehicles with electric vehicles recharged from solar/wind…or even their replacement by unicorn-powered vehicles requiring no other energy source whatsoever…would by itself have no effect whatsoever on traffic congestion and vehicle accidents.  And while the elimination of automobiles and trucks completely would certainly eliminate traffic congestion, it would also lead to delays in travel which would greatly exceed the magnitude of the congestion-caused delays.

    Putting lots of math in a study is not a substitute for common sense.


    12 Responses to “Two Very Poor Analyses”

    1. Mike K Says:

      Useful bio info.

      I am a Statista data journalist, covering technological, societal and media topics through visual representation. In fact, I love to write about all trending topics, illustrating patterns and trends in a quick, clear and meaningful way. Our work at Statista has been featured in publications including Mashable, the Wall Street Journal and Business Insider.

      Another journalist telling us how to do things.

    2. Mike K Says:

      The largest share of subsidy in the second article is US “Global Warming” subsidy which is the highest in the world.

    3. Steve Korn Says:

      Forbes’ journalist started with an agenda and then worked backwards.

      Reminds me of this famous Milton Friedman quip upon observing Chinese not using modern power equipment: “If it’s jobs (building roads) you want, then you should give these workers spoons, not shovels.”

    4. dearieme Says:

      Let’s go back to horses. They’d certainly provide more employment than motor cars do.

    5. PenGun Says:

      The fact that gas, solar and wind are cheaper and produce more power that coal drives so many of these arguments.

      It’s true solar and wind are intermittent, but it’s the limitations of a system designed for on demand power, with constant power production facilities using fuels of various kinds, that is the problem.

    6. DirtyJobsGuy Says:

      There has been a recent boomlet in solar installations to get contracts in place before the tax subsidies start to expire. The writers numbers are undoubtedly off in any event. Many utilities have been winning the argument to reduce or eliminate net metering for residential solar. This was a pure and outright transfer from power customers to customers with solar unjustified by any cost basis. Now the utility will pay only the current market price for solar generation rather than the cost for energy + delivery to the customers location (net metering). This will destroy any reasonable payback period for solar in almost all markets (i.e. from 10+ years with heavy tax credits to 20+ years with heavy tax credits).

      Distributed solar increases the instability of the electric grid rather than improving it and the cost to remedy this instability is high. Check the todays California ISO page for how renewables really behave! The peak load is well after solar production ends so solar requires 100% backup and probably saves little fuel cost since the costs of fuel transport and storage remain the same.

    7. Michael Kennedy Says:

      The fact that gas, solar and wind are cheaper and produce more power that coal drives so many of these arguments.

      PenGun is definitely a spoons guy, Dearie.

    8. Margaret Ball Says:

      Of course these “analyses” are sloppy. Rigorous ones wouldn’t support their preferred conclusions.

    9. David Foster Says:

      Interesting question why Forbes publisher Steve Forbes, who has been a pretty vocal libertarian for a long time, would want this sort of thing in his magazine.

    10. Steve Korn Says:

      David, about Forbes Magazine, it has been sold says Wikipedia: In November 2013, Forbes Media, which publishes Forbes magazine, was put up for sale. This was encouraged by Elevation Partners, of whom were minority shareholders. Sales documents prepared by Deutsche Bank revealed that the publisher’s 2012 EBITDA was $15 million. Forbes reportedly sought a price of $400 million. In July 2014, Forbes sold a majority of itself to Integrated Whale Media Investments.

      So may not have editorial control or control over quality of staff

      Forbes, like the WSJ, has suffered editorial and journalistic quality decline past few years…IMHO.


    11. RonF Says:

      Raising the cost of energy a great deal would encourage people to move into cities. Those pesky suburbs and rural areas are the ones who elected President Trump. Force them into cities and their votes get swamped out. Only people who are absolutely needed in the rural areas should live there. Them, and anyone who gets paid enough by corporations or the government to be able to pay the energy bill.

    12. Mike K Says:

      Forbes, like the WSJ, has suffered editorial and journalistic quality decline past few years…IMHO.

      I agree and attribute the WSJ changes to the Murdoch sons who now run it.

      Conquest’s second law. Any organization not explicitly right-wing sooner or later becomes left wing.

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