Carpe Diem, Economics, Energy and the Environment

On Earth Day, let’s appreciate our fossil fuel energy treasures and the human ingenuity that transforms our natural resources

energy

From my op-ed in today’s Investor’s Business Daily (which started in April 1984 and is now celebrating “30 years of innovation and growth”) titled “Earth Day: Hail Fossil Fuels, Energy of the Future“:

On Earth Day, according to various advocates, “events are held worldwide to increase awareness and appreciation of the Earth’s natural environment.” As we observe the event today, it might be a good time to appreciate the fact that Americans get most of their plentiful, affordable energy directly from the Earth’s “natural environment” in the form of fossil fuels (coal, natural gas, and petroleum). It’s largely those energy sources that fuel our vehicles and airplanes; heat, cool and light our homes and businesses; power our nation’s factories; and in the process significantly raise our standard of living. Shouldn’t that be part of “increasing our awareness and appreciation of Earth’s natural environment” — to celebrate Mother Earth’s bountiful natural resources in the form of abundant, low-cost fossil fuels?

From 1949 to 2040, fossil fuels have provided, and will continue to provide, the vast majority of our energy by far, according to President Obama’s Department of Energy. Last year, fossil fuels provided almost 84% of America’s energy consumption, nearly unchanged from the 85% fossil-fuel share in the early 1990s. Despite Obama’s dismissal of oil and other fossil fuels as “energy sources of the past,” his own DOE forecasts that they will still be the dominant energy source in 2040, providing more than 80% of our needs (see chart). They will continue to serve as the dominant energy source to power our vehicles, heat and light our homes, and fuel the U.S. economy.

Further, Obama’s energy policy has been primarily to force taxpayers to “invest” in “energy sources of the future” — renewables like solar and wind — instead of expanding production of oil, natural gas and coal. But again, DOE data tell a much different story. Even after billions of dollars in taxpayer subsidies for renewable energy, renewables last year provided only 7.8% of America’s energy, which was actually less than the 9.3% share that renewables provided in 1949 (see chart). That’s not a lot of progress for the politically popular, and very expensive, renewables. When it comes to solar and wind, those two energy sources provided less than 2.3% of America’s energy in 2013. Even in 2040, more than a quarter century from now, solar and wind together will account for only 3.9% of America’s energy, according to government forecasts, and all renewables together (including hydropower) will provide only 10.4% of our nation’s energy.

To further appreciate the Earth’s natural environment on Earth Day, we should celebrate the revolutionary technologies of hydraulic fracturing and horizontal drilling that have allowed us to access previously inaccessible, natural energy treasures trapped in tight shale rock miles below the Earth’s surface.

It’s an important point that those shale resources have been part of the Earth’s “natural environment” for many thousands of years but have become usable natural resources only in the last six years, because of the human resourcefulness that led to breakthroughs in drilling and extraction technologies.

As Thomas Sowell pointed out in his book, “Knowledge and Decisions”:

The cavemen had the same natural resources at their disposal as we have today, and the difference between their standard of living and ours is a difference between the knowledge they could bring to bear on those resources and the knowledge used today. Although we speak loosely of ‘production,’ man neither creates nor destroys matter, but only transforms it — and the knowledge of how to make these transformations is a key economic factor.

The full awareness and appreciation of Earth’s natural environment really makes sense only as a greater appreciation of the human resourcefulness and human ingenuity that have transformed natural resources like sand into computer chips, and oil and gas trapped in shale formations miles below the ground into usable energy. Mother Nature provides us with an almost infinite abundance of natural resources but without any “instruction manuals” that tell us how to process them into useable products that improve our lives and raise our standard of living.

On Earth Day, let’s not forget to celebrate and appreciate the human resources — knowledge, ingenuity, know-how, creativity, entrepreneurship, and imagination, i.e. the “instruction manuals” — that transform otherwise unusable resources like shale hydrocarbons into energy treasures that will power our economy for generations to come.

8 thoughts on “On Earth Day, let’s appreciate our fossil fuel energy treasures and the human ingenuity that transforms our natural resources

  1. The fact is, as it stands right now, renewables are extremely expensive, even given all the subsidies. When compared to fossil fuels, especial oil, they are quite inefficient, too.

    It is impossible to know the future with exact certainty. There may be an invention coming that suddenly makes solar energy dirty cheap and super efficient. At that point, the market will shift over. But until then, trying to force something that isn’t there will only result in wasted resources and impoverished people.

  2. So what extra planet do you plan on using once you make this one uninhabitable? Your figures don’t include ANY of the externalities that are already evidence from oil, gas, and coal exploration such as the horribly polluted landscapes, befouled rivers, and destroyed mountaintops left by fossil fuel production. Add in catastrophic climate change — and please don’t insult my intelligence by referencing how cold this winter was; Europe had the warmest winter in decades — caused by fossil fuels and the devastation that will produce before praising humanity’s idiotic pursuit of oil, gas, and coal.

    • Like every other older US city the city I live in has cleaner air than it did in 1815. Cleaner water too. I struggle to find these befouled landscapes. Which is why a radicals have had to claim that CO2 a benign trace gas that we all exhale is a ‘dangerous’ pollutant. Keep your environmental rosary off my economy.

      • Certainly in the US and Europe the environment is better. That’s because we enacted laws – which you want repealed – that forced corporations to bear the costs of their own pollution. Go look at any city in China, at the areas adjacent to Nigeria’s oil fields, at the beaches in India and Bangledesh where the “ship breakers” work. Those are hellscapes created by the greed you and your organization desires for the rest of the world. But hey! They have a growing economy! Think of how much money the health care industry in the third world will grow with all the poisoning cases they’ll be treating!

        • Go look at any city in China, and compare it to 1815, as Bill Reeves did with US cities. US cities were getting cleaner well before the EPA. Prosperity cleans the planet, not laws. Beijing is cleaner now than it was 100 years ago, and as China becomes more prosperous by following a more capitalist approach, Beijing will become even cleaner.

          If you prefer cities where horses and oxen are the primary means of moving goods and people, you can still find them. Go live there for a few years and then come back and tell us how much your health improved by breathing manure dust versus living in LA.

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