Epstein on "Thomas Friedman's Fracking Fallacy"

Thomas Friedman's Fracking Fallacy
Richard A. Epstein
Defining Ideas
August 8, 2012

It is amazing how quickly the technological and political landscape can change over a period of only four years. At this point during the 2008 presidential campaign, then-candidate Barack Obama was touting a promising future that featured scads of new jobs in the green energy business. The United States would be able to solve two problems with one bold stroke. It didn’t quite pan out that way. The Solyndra website leads off with its promise of “Clean and Economical Solar Power from Your Large Rooftop,” only to note that the bankrupt firm has suspended operations in order to evaluate its reorganization options.

This brutal reality reflects one insuperable difficulty with these renewable energy sources. Today, as in 2008, no one has found a way to store them except at a prohibitive cost. Unlike the much maligned fossil fuels, wind and solar power must be used when they are created, whether needed or not. Both wind and solar power sources are highly variable, so that, all too often, they are in greatest supply when they are least needed. In the absence of a seismic technological breakthrough, they are doomed to remain boutique sources of energy that cannot be counted on to power the economy going forward. 

These major difficulties have not stopped the United States government from lavishing extensive subsidies on an industry that is ill-equipped to use them. These subsidies programs have failed for mundane but compelling reasons. No government has ever succeeded in trying to shape industrial policy with state subsidies, for the simple reason that it has neither the knowledge nor the incentives to pick which fields make sense to invest in or which firms in these fields have latched onto a viable technology.

Faculty: 
Richard A. Epstein

Comments

Energy

Shaping energy policy - what about naval protection for the LONG oil supply lines from the ME. This all began with the British Navy's switch from coal to oil. Without the huge military expenditure, would we have become so dependent on oil or possibly have stuck with coal? Same with nuclear - also with a military birthplace. Without government insurance against nuclear meltdowns, would we have nuclear power? This is not to say that wind and solar don't come with the drawbacks you cite. Almost forgot the oil depreciation allowance. Again, renewables may not be a solution, but we can't pretend that government policy doesn't favor one or the other source of energy. BTW, I understand that with our greatly reduced importation of foreign oil, our navy IS considering redeployment of its assets.