Thursday, September 23, 2010

Small solutions to energy problem

Small solutions to the energy problem

I was watching a panel discussion on the energy problem and how it might be resolved. This panel had big (i.e. important) people on it, (including an Assist Secretary of Energy), and was discussing big solutions that would cost big money and require big legislative approvals.

Let me diverge here for an anecdote.

If you were to have a traffic congestion problem, the recommended action would be determined by the kind of expert you hired to develop a solution. A Highway Engineer would recommend additional lanes. A Transportation Planner would suggest mass transit. A Sociologist would point to developing car pools. And a Land Use Planner would recommend locating housing close to the jobs.

Each would be right as viewed from the expertise of his profession, but you could have any of four different solutions depending on who you selected. Remember, it’s important to understand an expert’s bias or focus before selecting him.

In the instance of the energy panel above, all the participants represented important (big picture) players in energy industries, (including alternative and renewable sources) and government. It might be expected that they would all suggest large scale solutions. And, they did.

But imagine what a different panel might recommend. A panel of knowledgeable amateurs might have recommended residential rooftop units tied into individual property generation alternatives.

Sounds good but it might be more difficult to implement than building a single, big one mega generator. Or would it?

Let’s go back to our hypothetical traffic congestion problem.
A constant frustration among transportation experts is the waste involved in people purchasing 4000 pound vehicles to transport one to five (usually no more than two) people around. These vehicles clog up our roads, burn more fuel per passenger mile than buses or trains, require 300+ square feet of valuable parking space per trip and, in general are inefficient in many ways compared to public transit.

BUT, who’s footing the bill for transit? Mostly John Q. Public as all mass transit has to be subsidized by some form of taxpayer funding. This means a big legislative decision and public approval is required to develop a transit system, especially an effective one.

The auto on the other hand is purchased, maintained and driven by individuals. No legislation is required for him to get funding. No public process is needed for approval of the trip routing. Fuel, maintenance and the vehicle operator are provided by the owner at no cost to the public. No Environmental Impact Report is required for the above.

In a nutshell, while it might be economically inefficient for the individual owner, the public doesn’t shoulder any direct cost for an auto based system. Fuel taxes paid by the vehicle owner pay for road construction and maintenance of the roadway.

However it’s added up, no one has been able to find an acceptable alternative for the auto.

Oops, back to energy.

My case is that in might be better to have an energy policy focusing on individual or small unit power generation (the single auto) than centralized power generation (a rail transit system). A thousand one kilowatt generators might cost more for the same total power than a one megawatt plant, BUT, it might be a quicker solution to the overall problem in the long run.

If the owner pays for it, who, other than himself, cares? Perhaps the best solution might just be for government to encourage individual action and get out of the way.

Tuesday, September 14, 2010

The current fiscal crisi9s

I don’t understand how the U.S. will ever get out of this fiscal crisis and back to normal levels of business responding to supply and demand.

Businesses will have to re-employ people to provide the goods or services their businesses produce. But they can’t re-employ people until someone starts buying their goods or services at previous rates. And no one will buy their goods and services until there are jobs.

But there will be no jobs until businesses need more employees to produce those goods and services.

Consumers will start buying again once they have jobs and feel there is a stability in the jobs market.

So, we go round and round – getting a job creates the ability to purchase items. Purchase of goods allows employers to hire people and create jobs. This in turn creates consumers for businesses.

Employers can create jobs after people start buying again but people can’t buy until after they have a job.

No matter how I say it, this is a self canceling process. Something outside the process has to break the cycle.

After the Great Depression, it took WWII to break this cycle. I wouldn’t want to wish anything like that on us to break this cycle. But what is there??

I have no idea.

My nearest thoughts only starts after the cycle is broken. I think we’ll go back to becoming a more thrifty society. People will save more resulting in lower levels of spending.

This, in turn, will result in only moderate business growth, leading to tighter jobs markets and probably lower pay levels.

The long term future as I see it is one of a more moderate quality of life for the middle class and a reduction from tolerable to a desperate quality of life for those in the bottom layers of society.

This confusion I’m feeling may be what the country is feeling. We all know something needs to be done but no one knows what that is.

Think about that.