…and of the entire era of reliable and affordable electricity?
Is it hot where you are? Have you been enjoying your air conditioning? Appreciate it a little more after the power has come back on after an extended outage?
The American economy has made air conditioning broadly affordable, even by those whose incomes are fairly low. But how many people are going to be able to afford their A/C if electricity prices rise to the $.70 or $.80/kwh range?
Remember, Barack Obama said (in 2008) that under his plan, electricity rates would “necessarily skyrocket.” The only things that have prevented such skyrocketing from happening so far are (a) the unwillingness of Congress to pass a cap-and-trade bill, and (b) the vast expansion in supplies of natural gas–a key fuel for electricity generation–driven by advanced fracking technologies. In a second Obama term, neither of these factors would likely be operative. A court decision has now given the EPA the ability to do pretty much what it wants to do regarding regulation of CO2, and in an Obama administration, what it wants to do is to shut down America’s coal-based electricity generation. Also, the scale of the success of oil/gas fracking clearly took the Obama administration by surprise, and in a second Obama term there would be far more regulatory effort to tie the hands of this industry and limit the development of America’s natural gas resources.
(Electricity bills have increased in recent years–from a residential average of $.0945/kwh in 2005 to $.118/kwh in 2011…but that’s nothing compared to what will happen if Obama is reelected and the inhibiting factors described above are removed.)
Electricity cost and supply considerations do not only impact households, of course, they also impact businesses. Cost and reliability of electricity is especially important for many kinds of manufacturing businesses, and also for data centers–which play an increasingly important role with the growth of Cloud computing. Electricity cost is often a factor in company location decisions; internationally as well as within the country: for example, here’s a story about a Chinese company that moved from China to South Carolina in part because it can get electricity for 4 cents per kwh in SC as opposed to the 14 cents it had been paying in China. There’s not going to be too much of that kind of thing if we keep Obama and he succeeds in his plans to drive up America’s electricity costs.
A couple of months ago, I was vaguely listening to the radio while doing something else. There was a weather report about some bad storms somewhere, then something about power plants being closed. “Must be bad storms,” I thought, “I don’t think I’ve ever heard of closing power plants for a storm.” They I realized that the weather report had ended and the station had segued from weather into news reporting: the plants had not been closed temporarily on account of weather, but permanently, on account of actual or anticipated government regulations.
Destruction of a nation’s energy infrastructure has previously been something that was done by natural disasters or enemy action: for a country’s energy industry to be crippled by its own government is something relatively recent.
Not unique to the US, though…see this article about the increased risk of blackouts that Germany has imposed on itself through its worship of solar and wind generation and its government’s panicky actions regarding nuclear power.
Enjoy your air conditioning while you still have it.