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Dan Shapiro
Dan Shapiro

NOW AND FOREVER - AIR SUPPLY



National security is also at risk because 13 percent of the oil we usecomes from the Persian Gulf (which holds two-thirds of the world's petroleumreserves). Buying the fastest and cheapest replacements is urgent. But replacinginsecure foreign oil with insecure new domestic energy sources doesn't help. Wewill have a secure supply of energy only when we have both displaced Mideast oiland shifted the basic architecture of our domestic energy infrastructure. Energysystems don't become secure by being located in this country--unless widespreadfailures are made impossible and local failures benign.




NOW AND FOREVER - AIR SUPPLY


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Fortunately, there are faster, cheaper, and surer alternatives. We can achieveenergy security by using less energy far more efficiently to do the sametasks--and then by supplying what is still needed from sources that areinherently invulnerable because they're dispersed, diverse, and increasinglyrenewable. These options reduce the need to transport energy by vulnerablelong-distance pipelines and transmission lines, and usually cost much less thanexpanding those links.


Supplying secure and affordable electric power issimilarlyfeasible. America's electricity now comes mainly from big power plants thatstopped getting more efficient in the sixties, cheaper in the seventies, biggerin the eighties, and built in the nineties. The ones we already have willcontinue to serve us for a long time, however, and should at least start reusingthe waste heat they now throw away--as much energy as Japan consumes foreverything. In principle that could cut America's total fuel usage by one-third,halve net generating cost, and save a trillion dollars per decade if moreregulators allowed it here as they do in Europe. But big power stations can't supply really cheap and reliable electricity, for two reasons: The power deliverysystems cost even more than the stations, and the grid causes almost all thepower failures.


Consider the example of a good compact fluorescent lamp. It emits the samelight as an incandescent lamp but uses four to five times less electricity andlasts 8 to 13 times longer, saving tens of dollars more than it costs. It avoidsputting a ton of carbon dioxide and other bad stuff into the air. But it does farmore. In suitable numbers--half a billion are made each year--it can cut by afifth the evening peak load that causes blackouts in overloaded Bombay, boostpoor American chicken farmers' profits by a fourth, or raise destitute Haitianhouseholds' disposable cash income by up to a third. Making the lamp needs 99.97percent less capital than does expanding the supply of electricity, thus freeinginvestment for other tasks. The lamp cuts power needs to levels that makesolar-generated power affordable, so girls in rural huts can learn to read atnight, advancing the role of women. One light bulb does all that. You can buy itat the supermarket and screw it in yourself. One light bulb at a time, we canmake the world safer.


America's energy supply industries have done a remarkable job of fuelingthe world's greatest economy. They are vital, skilled, dedicated, and ofteninnovative. But energy policy is not about the past; it shapes the future. Itshould create a structure for treating that future as choice, not fate.


We don't know and can't shape what those recommendations will be. However,three decades of well-documented experience worldwide suggest that both fairmarket competition and wise administrative decisions broadly tend to favorcertain outcomes. These include more efficient use, energy of the right qualityand scale for the job, flexibility, and transparency. A sound energy policy won'tpick winners, bail out losers, substitute central planning for market forces, orforecast demand and then build capacity to meet it. Rather, it will bust thebarriers that now prevent the market from dispassionately picking the bestportfolio of investments in both efficiency and supply.


Inventor Edwin Land said that people who seem to have had a new idea haveoften simply stopped having an old idea. The key old idea to stop having is thattraditional supply-side approaches make sense or money. A new, balanced,market-driven energy policy can make both--if we gracefully let go of the past,embrace what works, and do what most Americans want. 041b061a72


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