It’s almost difficult to believe this article was reprinted in the Providence Journal:
The electrical system’s duress was a direct result of the polar vortex, the cold air mass that settled over the nation. But it exposed a more fundamental problem. There is a growing fragility in the U.S. electricity system, experts warn, the result of the shutdown of coal-fired plants, reductions in nuclear power, constraints on natural-gas pipelines and a shift to more expensive renewable energy. The result is likely to be future price shocks. And they may not be temporary. …
The problems confronting the electricity system are the result of a wide range of forces: new federal regulations on toxic emissions, rules on greenhouse gases, state mandates for renewable power, technical problems at nuclear power plants and unpredictable price trends for natural gas.
We’re dealing, here, with the predictable effects of regulation. Another passage provides a good illustration of government’s inability to predict the reactions of the private sector to its tape:
The federal government appears to have underestimated the impact as well. An Environmental Protection Agency analysis in 2011 had asserted that new regulations would cause few coal plant retirements. The forecast on coal plants turned out wrong almost immediately.
One suspects this factor wasn’t considered to be a very important a part of the regulatory decision-making process. After all, models show dramatic climate effects happening a century from now; why should it matter whether the government can predict economic factors a year or two out?
I wonder, too, whether there isn’t another factor, which one sees in progressive, big-government thinking more broadly: a simple inability to understand that people will change economic behavior. Energy companies — or any other companies — aren’t typically in business out of an innate drive to provide the services that they provide.
Business is a way of making money and supporting families. If the government makes it easier to do so by some other means, people will find those other means. And when the entire economy leans on what they used to do, everybody suffers.
These effects aren’t simple dollars and cents. They’re lost opportunities and damaged lives.