Let the Renewable Energy Markets Slug It Out

Implications: The Pickens Plan is not bad in itself, being grounded in the reality of changing markets and led by a businessman who has actually invested in the process.  What may be more important is that the Plan could shake the monopolistic grip that fossil and nuclear energy has on our infrastructure and thought process.  That alone may enable renewable energy markets to grow once the suffocating deadwood of incumbency is cleared.

Analysis: The issue of a grand plan or allowing market forces to work in the likely shift from nonrenewable to renewable energy is daunting.  Individuals, businesses and communities continue to squeeze on the sands of cheap energy even as it oozes away between their fingers.  An enormous infrastructure, backed up well entrenched bureaucracies and well-heeled interests continue to resist, stall and delay.  Talking heads preach "allowing the free market to work" and "not having the government pick winners and losers" while they belly up to subsidies, protectionism and ignoring long term costs.

Nevertheless,  like declining sports, business and political dynasties, the days of the Big Four (oil, natural gas, coal and uranium) are starting to come to an end, but it's a song that will take decades to play out.  In the meantime there are so many "plans" to achieve energy "independence" that if I had a dollar for everyone on out there, I could retire.

Pickens' plan isn't bad, compared to most.  It recognizes the cheap energy joy ride is over, recommends a proven technology and grudgingly recognizes that an shift in fossil fuel, like petroleum to natural gas, is a bridge  that will take a while.  More importantly, Pickens is not an ivory tower wonk of the sterile left or right, but a hard headed businessman who has put his money where is mouth is, identifies ways to overcome barriers and communicates his plan to the public in a way that doesn't insult our intelligence.

Still, it's a plan, and one that will have to ride up against market and monopoly forces, both public and private.  The high voltage transmission infrastructure has to be improved, externalities like pollution have to be better priced in to the market and just not ignored.  There will be a plethora of competitions - what wind power companies will dominate, how will wind compete against solar in intermittent markets, which energy storage technologies will win out and so on.  No plan will accurately predict that any more than no prognosticator can pick all the playoff winners of a league and how they'll finish.

There was a similar time in US history when, in the first two decades of the 20th century, the fledgling automobile industry had a competition between gasoline/diesel engines, steam and electric motors.  Gasoline/diesel won out by superior speed, range and cheaply available fuel.  At that time there was no complex, unified, interconnected and regulated infrastructure to compete against.  Railroads were in their own world, the highway system didn't exist and social factors were not on the radar.  The most important thing that the Pickens Plan can do is help shove the Big Four oligarchy off their thrones and get their boots off the new technologies' and markets' necks.