Sunday, 30 January 2011

Free Market Or Controlled Market For Energy?

Question: Which is better, an unregulated energy market or a government controlled energy market?
Answer: Yes. It is a false debate to pose the question as either/or. But that is how it gets posed. The truth lies somewhere in the middle. We need enough free market enterprise to make energy production both profitable and competitive. But we need enough government regulation to protect the environment and the interests of consumers. Even more so, we need enough government regulation to keep the playing field level.
Remember, "government" includes all levels of government, not just federal. Local government, for example, controls zoning. Where those powerlines and underground wires go depends on local government, as do permits to have windmills, wind turbines, septic systems, and wells. Each state controls or influences the cost of electricity, gasoline, diesel fuel and home heating supplies through its tax policies, rate commissions and manufacturing regulations.
Not all things are equal with regard to energy production. Some obvious examples come to mind. A state cannot use hydro dams or tidal power to create electricity if it has no surface lakes and no shoreline. States will not allow fraudulent energy products to be marketed within their borders. Localities and neighborhood covenants will control the height of towers and cities will decide whether to permit drilling for oil or gas within the city limits.
Other examples are not so obvious and may not be legally clear cut. What if a given state or tribe wishes to provide nuclear waste storage? Who protects the people of that and neighboring states from contamination? What if a large wind farm project gets built in one jurisdiction but needs to deliver the electricity via power lines that run through other jurisdictions that do not wish to allow new towers and transmission lines? What if one state encourages new refineries or nuclear plants but people in states downwind from the facility object?
Government can kill energy production through high taxes and impossible environmental standards. It can harm or help specific types of energy production through contracts, loans and grants. This, in fact, is happening with nuclear power and gasoline. Safety and environmental standards are so high that there is little incentive for private industry to build more nuclear plants or refineries.
We have come a long way from the beginnings of this country. In the beginning people could cut wood and burn it for heating and cooking. They could use coal for fire and damn up streams to turn the large paddle wheel at the local mill. Common sense, the common good and self interest were allowed to work themselves out into a manageable harmony of interests, more or less. Government only did what nobody else could do, which in those times amounted to the providing of law and order and the enforcement mechanism (courts) for contracts. Maybe the true answer to the debate question is still that government should do what only government can do, nothing more. Only government can enforce contracts, create and monitor zoning regulations, and use the power of interstate commerce and taxation to guarantee safety, quality and fair trade practices.
The rest should be up to us. "Us" includes private enterprise and customers. Let's not forget personal responsibility. There should never be a need for government at any level to prohibit open burning on windy days because there should never be idiots out there burning on such days. No agency should need to prohibit dumping wastes willy- nilly or polluting oil well sites with irresponsible drilling or sloppy maintenance practices. Translation: beyond a certain point government cannot make up for lack of character.
Bottom line: we do not need laws forcing us to plant trees, monitor water quality, use energy sparingly and wisely or dump toxic waste only where it should be dumped. We do need plentiful and cheap energy but we will not have it if we continue to abuse and misuse it. The good quality of our environment is not magical. It will improve or deteriorate in proportion as we each and all act responsibly or not.
Losoncy is president of Clean Up America, Inc., a company that markets Eloos. Eloos are waterless, evaporative sanitation systems. To learn more go to

Lawrence Losoncy - EzineArticles Expert Author