Energy and The Free Market

Thoughts on a Free Market Economy…                                                        September 1, 2020

“Energy and the Free Market”

By Phyllis Hunsinger

                When California recently experienced rolling blackouts, defined by Google as a last-resort measure used by an electric utility company to avoid a total blackout of the power system, the governor of the state, Gavin Newsom, said, “The state failed to predict and plan for the energy shortage.”

Governor Newsom failed to include the obvious:  interrupting the free market with mandates from the state never works.

                Alex Epstein, author of The Moral Case for Fossil Fuels, identified the problem for California and other states when he said, “Policies mandating unreliable solar and wind electricity are making our electricity grid more unreliable every year.”  He identified three ways in which this worked: (1) mandating the use of unreliable wind and solar; (2) prematurely shutting down ultra-reliable coal and nuclear plants; and, (3) stopping the construction of natural gas infrastructure.

                Harnessing fossil fuels mitigates the effects of extreme weather patterns.  Homes and businesses are kept at comfortable temperatures, water is pumped from great depths underground, agricultural production has been revolutionized, and the standard of living and quality of life have improved markedly as a result.  Electricity produced by fossil fuels and nuclear energy has helped mankind everywhere adapt to natural climate cycles. The goal is to promote the flourishing of humankind.

                Although not adequately acknowledged, our quality of life today is a result of the discoveries, developments, and usage of our natural resources. Thanks to fossil fuels and to knowledge and resources, the environment continues to be improved and the lives of everyone around the world are improved. Freedom to innovate means challenges continue to be overcome to make our lives more comfortable and secure.

                The beauty of a free market is the consumer and the producer work off of prices and profits.  The best source of energy is one that is reliable, plentiful, and affordable. Whenever there are government policies mandating the elimination of one type of energy use over another, the unintended consequences make the situation worse.  This was evident in California where polices mandating unreliable solar and wind electricity made the electricity grid unreliable; therefore, there was not enough electricity to meet the needs of its users.  Disrupting the market with arbitrary mandates creates shortages.

                Competition, found in a free market economy, produces the best ideas. Markets continually evolve as new products and processes are developed; the energy sector is no different. The key to improving energy sources depends on having the freedom to develop and the freedom to compete in the market place.  This freedom means every form of energy has the right to develop. Consumers in a free market economy will act in their own best interests.

                Government interference orchestrated by central planning is not the way to establish an energy policy.  Energy is vital to our standard of living. Entrepreneurs need to have the freedom of a market economy to innovate in order to better serve mankind in all facets of life, but none more than energy.

Phyllis Hunsinger © 2020 All Rights Reserved

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