2014-04-27

America vs China: Energy Edition

On the one hand, you have China building coal fueled power plants left and right, and Chinese going for broke on thorium nuclear power. China's leaders can project future power needs and they are building to meet the demand, and then some in the case of thorium power. Economic activity rises and falls with energy use and if the Chinese can deliver with thorium reactors, they will have far more energy production capability than any nation on Earth.

On the other hand, there is America. U.S. electricity prices may be going up for good
There is a growing fragility in the U.S. electricity system, experts warn, the result of the shutdown of coal-fired plants, reductions in nuclear power, a shift to more expensive renewable energy and natural gas pipeline constraints. The result is likely to be future price shocks. And they may not be temporary.

One recent study predicts the cost of electricity in California alone could jump 47% over the next 16 years, in part because of the state's shift toward more expensive renewable energy.

"We are now in an era of rising electricity prices," said Philip Moeller, a member of the Federal Energy Regulatory Commission, who said the steady reduction in generating capacity across the nation means that prices are headed up. "If you take enough supply out of the system, the price is going to increase."

......New emissions rules on mercury, acid gases and other toxics by the Environmental Protection Agency are expected to result in significant losses of the nation's coal-generated power, historically the largest and cheapest source of electricity. Already, two dozen coal generating units across the country are scheduled for decommissioning. When the regulations go into effect next year, 60 gigawatts of capacity — equivalent to the output of 60 nuclear reactors — will be taken out of the system, according to Energy Department estimates.

......The federal government appears to have underestimated the impact as well. An Environmental Protection Agency analysis in 2011 had asserted that new regulations would cause few coal plant retirements. The forecast on coal plants turned out wrong almost immediately, as utilities decided it wasn't economical to upgrade their plants and scheduled them for decommissioning.

This story reminded me of the argument that the U.S. is in fact very much like Communist Party run China in that there is really only one party/entity in control, it is just hidden by the fact that the institutions of power in the U.S. have greater status and there are two parties to give the illusion of choice. The difference also being that China's leaders are aiming for development, while America's leaders are more ideologically driven. Otherwise it is very hard to understand why the U.S. would pursue self-evidently destructive policies that anyone with a basic understanding of economics can foresee.

The three branches of USG
Many people, your humble blogger included, are permanent members of USG. Our jobs include functions typically considered to be executive, legislative and judicial. New “governments” are elected and we keep our jobs. We massively outnumber the temporary government (i.e. elected and appointed officials) and we’re effectively immune from their whims (thankfully).

Let’s again look at the healthcare bill. Where did it come from? At some point, someone must have sat down in front of a blank Word document and starting typing some stuff that turned into (at least a section of) the healthcare law. Who was this person? How did he or she get to such a powerful position? As best I can tell, no one actually knows. Behold, the genius of modern USG.

The healthcare law has been declared Constitutional, but it’s also worth remembering that we don’t really know what’s in it yet. This is, of course, true for all large pieces of legislation (it’s a bit scary that the good professor’s understanding of American government is stuck sometime in 19th Century – or earlier). Who will decide what’s really in the law?

Once the law is actually put in place, and conflicts arise, who will resolve these conflicts?

The last three paragraphs ended with questions. Here’s another one, what if there is only one answer to all those questions? That is, what if one entity writes laws, decides what the laws say later on, enforces the laws, and interprets the laws after they are implemented. Such an entity would hold all the actual power of government. What if we didn’t even know which people constituted this entity and what if we had no control over this entity? Surely, that couldn’t happen.

If it were to happen, there would be no checks and balances – at least not in the traditional sense of checks and balances that operate across executive, legislative and judicial functions. If this were the case, and if the legal system was not acting as a check on federal power (see Branch 1 above), then we’d have a government of effectively unlimited power (subject only to random Supreme Court decisions that may temporarily limit power in certain areas and not others).



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