Killing the Energy Goose

  • Date: 20/09/16
  • Ron Clutz, Science Matters

Cheap energy is the Golden Goose of modern society

Aesop’s Fable of The Man and the Golden Eggs

A man had a hen that laid a golden egg for him each and every day. The man was not satisfied with this daily profit, and instead he foolishly grasped for more. Expecting to find a treasure inside, the man slaughtered the hen. When he found that the hen did not have a treasure inside her after all, he remarked to himself, ‘While chasing after hopes of a treasure, I lost the profit I held in my hands!’

The Moral: People often grasp for more than they need and thus lose the little they have.

Energy is the Golden Goose of Modern Society

Poverty and energy scarcity are obviously tied together.

Access to cleaner and affordable energy options is essential for improving the livelihoods of the poor in developing countries. The link between energy and poverty is demonstrated by the fact that the poor in developing countries constitute the bulk of an estimated 2.7 billion people relying on traditional biomass for cooking and the overwhelming majority of the 1.4 billion without access to grid electricity. Most of the people still reliant on traditional biomass live in Africa and South Asia.

The relationship is, in many respects, a vicious cycle in which people who lack access to cleaner and affordable energy are often trapped in a re-enforcing cycle of deprivation, lower incomes and the means to improve their living conditions while at the same time using significant amounts of their very limited income on expensive and unhealthy forms of energy that provide poor and/or unsafe services.  Energy, Poverty, and Development

The moral of this modern story is very clear. Where energy is scarce and expensive, people’s labor is cheap and they live in poverty. Where energy is reliable and cheap, people are paid well to work and they have a better life.

Golden Eggs Aplenty in the US

From Shale Revolution Keeps Growing, Sept. 12, 2016, Corpus Christi Caller Times

Consider that in the near blink of an eye natural gas has overtaken coal as the country’s largest fuel for electricity generation. Coal generated more than 50 percent of U.S. power just a decade ago. Today, it produces just a third of our electricity and is poised to fall further.

Second, our same supply of low-cost gas is leading a manufacturing resurgence. Along the Gulf Coast and in shale fields in Pennsylvania and Ohio huge manufacturing facilities — be they steel or chemical plants — are now either entering production or are under construction. Chemical producers who use natural gas as the building blocks for their products can now make the same products here for a fraction of what they can overseas.

The American Chemistry Council, the trade association for the nation’s chemical companies, now reports that nearly 270 new chemical projects are in play, totaling $170 billion in investment. Roughly 60 percent of that investment is coming directly from overseas. Affordable, abundant natural gas is proving decisively positive for U.S. manufacturing. Jobs and investment that once slipped away are now returning. (my bold)

And last, but not least, we are on the verge of becoming one of the world’s largest natural gas exporters. Just a few years ago, America was poised to become a major natural gas importer. It has been a remarkable turn of events.

The Illusory Treasure of Fighting Climate Change

Meanwhile in jurisdictions grasping for the moral treasure of reducing CO2, governments are starving or poisoning the Energy Goose and the suffering is only beginning. Exhibit A is oil-rich Alberta Canada where provincial policies have halved business investment in just 2 years.

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