The command economy fails again
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Developers Cancel Huge Offshore Wind Contract In Latest Blow To Biden’s Climate Agenda
The two companies had signaled that their projects were facing financial troubles, signing onto a petition to New York officials in September 2023 seeking to renegotiate their contracts to account for economic problems that are dogging the wider offshore wind industry. The contract’s cancellation does not necessarily mean that the project is permanently terminated, but the firms will have to renegotiate the development at a higher price from the state in order to get back on track, according to Reuters.
“Politicians may try to resuscitate it, but this extends offshore wind’s losing streak, which is quite impressive,” Dan Kish, a senior research fellow for the Institute for Energy Research, told the Daily Caller News Foundation regarding the project and its future prospects. “Even with Biden’s Green New Deal slathering cash all over these things, they can’t seem to grease the skids enough to make these things work.”
The problems facing offshore wind are widespread and severe enough that several energy policy experts previously told the DCNF that they expect the federal government to step in to effectively bail the industry out.
Of course the feds will do that. Hide via taxes what consumers don’t want to see in their electric bills.
How’s that other mandatory green dream going? It’s proceeding at gunpoint.
The transition from horses to cars became inevitable just as soon as the internal combustion engine was invented. A car you could park almost anywhere and fill up maybe once a week so that you could travel at then-blistering speeds of 20 miles per hour was so obviously superior to a slow-moving horse that lived in a barn and left horse manure everywhere that not one subsidy, tax break, or mandate was ever required.
The case for transitioning from gas-powered cars to electric cars isn't nearly so clear. Both power trains have their plusses and minuses, and, for most people, the minuses of EVs outweigh the plusses. If they didn't, none of the subsidies, tax breaks, or mandates would be required. That's what inevitability looks like.
Nevertheless, a coalition of kleptocrats, grifters, and liars was able to convince enough well-meaning fools that the transition to EVs was as inevitable as the move from horses to gas-powered cars.
All we had to do to make that happen was... basically everything. That includes Washington creating an EV market from scratch to adding trillions in new debt to the mountain of it we're already sitting on.
… "The entire myth at the heart of this whole transition is that the battery car seamlessly fits right into the gas car's position," Edward Niedermeyer, the author of "Ludicrous: The Unvarnished Story of Tesla Motors," told Marx. "It doesn't, and that's the problem."
As you're probably already aware, "the pace of adoption has markedly slowed, and analysts have suggested the country is no longer on track to hit the government's sales targets" and "the trickle-down effects of this decreased demand are everywhere."
The subsidies, tax breaks, and mandates were the magical stones. The finger-snapping villain was Presidentish Joe Biden. We were supposed to believe — and millions did and do — that the entire transportation sector of the world's largest economy could be remade in a near-instant if the Big Man with the MacGuffin Gauntlet just wished for it hard enough.
So you won’t buy into our green dream, eh? Oh yeah? Watch this:
DC greenlights aggressive electric vehicle mandate despite critics sounding alarm on high consumer costs
The Washington, D.C., Department of Energy and Environment (DOEE) announced late last week that it had formally adopted the so-called Advanced Clean Cars II Rule crafted by California's state government. Under the regulations, automakers will be required to only sell zero-emissions vehicles beginning in 2035 in an effort to curb carbon emissions and fight global warming.
In addition to Washington, D.C., several northeastern states, including Connecticut, Massachusetts, Maryland, New Jersey, New York, Rhode Island, Vermont and Virginia, are pursuing EV mandates. Michigan and New Mexico are also moving ahead with their own EV requirements.
The purpose of a carbon tax is to force society-wide reductions in the use of hydrocarbons—oil, natural gas, coal—that, when combusted, emit carbon dioxide (CO2). Carbon-tax advocates argue, correctly, that today’s climate-driven energy policies—mainly subsidies and mandates for alternative fuels—have been ineffective and inefficient, since those subsidy programs and federal mandates are subject to bureaucratic friction, bloat, misdirection, and kleptocratic influences. Carbon-taxers are also correct in observing that the subsidy/mandate approach requires accepting the ludicrous assumption that government experts know what fuels and energy-technology markets need and should use.
Thus, carbon-taxers believe a better, more effective energy policy is just to make hydrocarbons more expensive, thereby unleashing “market forces” to adopt or invent non-hydrocarbon alternatives. Some in Congress apparently believe this theory, as one of the bipartisan carbon-tax bills is titled the “Market Choice Act.” Promoters also tout the simplicity of a carbon tax.
While that tax could be simple, in theory, what would it achieve? The old saying goes that when you tax something, you get less of it. Meanwhile, humanity has spent centuries trying to reduce the cost of energy to get more of it.
You don’t need to have an opinion on climate change to evaluate the consequences of a carbon tax. The flaws with simplistic market-centric arguments for the tax are revealed by the answers to two key questions. First, just how big of a tax would be required to achieve the desired result, i.e., radically reduced hydrocarbon use? And second, would high-cost hydrocarbons in fact spark “market innovation,” yielding low-cost alternatives that currently are languishing or being suppressed?
Start with the fact that hydrocarbons are used for all products and services, even if indirectly, and directly supply over 80 percent of overall energy for the U.S. and the world. Even “carbon-free” energy technologies are built by consuming hydrocarbons somewhere. Such realities help explain the impact of price on oil demand over recent history. (Oil accounts for 40 percent of all hydrocarbon consumption and fuels 95 percent of all global transportation.) Average oil prices, ignoring short-term volatility, have increased by about 200 percent since 2000. Yet, global oil consumption still rose by 25 percent over that period. You don’t need a degree in economics to wonder what kind of price hike would be needed to reduce demand for oil.
Given the central role of hydrocarbons in the economy, it strains credulity to think there’d be any demand impact, visible or otherwise, from a 20 percent hike in oil prices, the starting point for carbon tariffs. The carbon tax instead would be just another regressive consumption tax to fatten government coffers. Of course, a sufficiently high carbon tax would reduce hydrocarbon demand—by inducing a recession, even a depression. As for proposals to send big chunks of those energy-tax collections as rebates to lower-income households, such rebates effectively lower the cost of the consumed hydrocarbons and thus violate the demand-killing purpose of the tax. And any hopes that a new carbon tax would be implemented in exchange for eliminating an existing tax, or that other nations like China will follow our lead in imposing such a tax, are naïve.
A second part of the case for a carbon tax constitutes the claim that it is “a highly visible commodity tax that can be readily avoided,” because higher hydrocarbon prices would induce the use of existing alternatives and the invention of new non-hydrocarbon technologies. Proponents of this idea concede that, initially, consumers would adopt expensive alternatives only because higher prices were forced on the competition. They insist that the non-hydrocarbon alternatives would quickly become cheaper as rising industrial-production volume reduces firms’ costs, and that the sheer scale of the opportunity stimulates innovation. While that may sound logical, both claims fall apart in reality.
Today’s non-hydrocarbon alternatives are not a nascent industry waiting to scale up to high volumes. Existing alternatives are already in massive, high-volume production, even if not in America. The International Energy Agency (IEA) and other proponents of an “energy transition” regularly tout the hundreds of billions of dollars spent each year on producing alternative-energy hardware. And while one should expect modest price declines as volumes continue to rise—that well-known industrial phenomenon is called Wright’s Law and comes from the combination of experience and technological refinements—such cost declines take time and are only incremental, as Ford and GM have rediscovered in their embrace of high-volume, money-losing EV production. Wright’s Law does not lead to “quantum leaps” and “exponential” changes of the kind needed to compete with hydrocarbons.
Proponents’ related claim that carbon taxation will stimulate foundational innovation is, to put it diplomatically, a novel theory of innovation. Airplanes weren’t invented because of taxes on ships, nor the transistor because of taxes on vacuum tubes, nor the car from taxing horses. Taxing whale oil would not have led to coal-derived kerosene (which, by the way, is what saved the whales), nor would taxing coal have led to nuclear energy.
Foundational innovations of every kind—true breakthroughs—share a historically (and politically) annoying feature: they have “no predictor function,” as Bill Gates put it nearly a decade ago in an interview about the need for “energy miracles.” The energy-producing and energy-consuming technologies that will be available to consumers and businesses for a long time are those that already exist.
A sufficiently high carbon tax though, would induce the kinds of changes in consumer behavior long promoted by radical environmentalists. To avoid a punitive carbon tax, consumers will drive and fly less, both for business and vacations; they will buy smaller cars (reversing the decades-long preference for SUVs); they will eat less beef; they will leave rooms warmer in the summer and colder in the winter; and more. Carbon-taxers are thus in the same camp as the energy transitionists who emphasize that, in order to cut hydrocarbon use radically, governments will need not only taxation but also legislation to force changes in all manner of personal consumer “behaviors”—affecting pretty much everything people choose to do to make life more pleasant, convenient, or even just enjoyable.
Popular media and political operatives want the public to believe that a scientific debate exists about whether it’s possible to cut down hydrocarbon use dramatically. But two decades from now, as even the IEA’s “transition” scenarios admit, hydrocarbons will still supply most of society’s energy. And to restate what should be obvious: the quantities and forms of energy used are often hidden from plain sight in labyrinthine supply chains, with hydrocarbons used everywhere. It takes about one barrel of oil in energy-equivalent terms (BOE) to produce 25 barrels of milk, or 20 smartphones, or one ounce of gold; it takes 15 BOE to fabricate one home-sized solar array, or one conventional car; and about 30 BOE to manufacture an electric car.
