As long as the government mandates environmental rules with no regard for the market, we will have bizarre incidents like the three I will talk about today.
The first is the Chevy Volt "recall." For some reason they have decided not to call it a recall, but a “call back.”
The fixes are similar to a recall and involve about 8,000 Volts sold in the U.S. in the past two years. GM is making the repairs after three Volt batteries caught fire following crash tests done by federal safety regulators. The fires occurred seven days to three weeks after tests and have been blamed on a coolant leak that caused an electrical short.
The reason it is not a recall has nothing to do with the fact the Volt is a politically correct car—of course not!
The German government is in the forefront of alternative energy. You would think the renowned German efficiency would allow them to remember that if you generate electricity from offshore wind farms that you need a way to get the electricity to the mainland. Or maybe not:
The generation of electricity from wind is usually a completely odorless affair. After all, the avoidance of emissions is one of the unique charms of this particular energy source.
But when work is completed on the Nordsee Ost wind farm, some 30 kilometers (19 miles) north of the island of Helgoland in the North Sea, the sea air will be filled with a strong smell of fumes: diesel fumes.
The reason is as simple as it is surprising. The wind farm operator, German utility RWE, has to keep the sensitive equipment -- the drives, hubs and rotor blades -- in constant motion, and for now that requires diesel-powered generators. Because although the wind farm will soon be ready to generate electricity, it won't be able to start doing so because of a lack of infrastructure to transport the electricity to the mainland and feed it into the grid. The necessary connections and cabling won't be ready on time and the delay could last up to a year.
In other words, before Germany can launch itself into the renewable energy era Environment Minister Norbert Röttgen so frequently hails, the country must first burn massive amounts of fossil fuels out in the middle of the North Sea -- a paradox as the country embarks on its energy revolution.
Do we laugh or cry? Government-regulated monopolies somehow forgot that electricity needs to flow.
But surely solar power is our future! Even with massive subsidies the industry has a few problems:
Idaho Power plans to cut off electricity on Tuesday to plant in Pocatello, Idaho, that makes material for solar energy, because the factory owes $1.9 million in unpaid utility bills. The dispute is with Honolulu-based Hoku Scientific, Inc., which is backed by Chinese financing and enjoys federal and state incentives.
Oops.
As long as the government mandates, instead of the market, we will have odd examples like this. Market solutions work.
Our Energy Policy is a Giant Accident Just Waiting to Happen!For example, the huge anti-market subsidies that are given to autos are not well understood by the average person. If you included the defense expenditures that the US makes to keep the oil flowing in your auto's fuel bill, the price of gas would at least double. All such subsidies, whether it is for politically correct forms of energy, or for gasoline, morph the market into something quite different and artificial than what it would have been otherwise.
Stop all subsidies and let the market decide.