The Illusion of a Level Playing Field

Most people expect and hope that PV will become cost-effective so that it can compete without government subsidies. They see this as the societal end game, an end to subsidies and the starting flag for the private sector to work its magic. Even PV people want this, and they will say they expect it soon, when in their hearts they may think it's unfair – who pays for all those externalities the other energy sources don't pay for?

Most traditional market-oriented people can't even see the reason why society should pay even temporary subsidies. They see subsidies as violating the level playing field ideal. No one should have any advantage over anyone else, they say.

They believe there is a level playing field, and they want to preserve it. Most people do. It seems utterly natural.

It is a remarkable fact that humans rapidly adapt to change. Soon they hardly even notice a change, as they naturally adapt, as if they had sea legs. Change a level playing field, and most people just change with it. Soon they think it's level again - when it was never level in the first place. Just tilted the way they were used to, the way they liked.

Our drive for stability seems to demand that as soon as a new way of doing things is established, much to the chagrin and pain of the previous way, it becomes "level." The King is dead; long live the King!

There are few markets where society's thumbprint is more marked than in the energy market. Put bluntly, past societal preferences and investments have defined today's energy market; and future ones will redefine it, no matter how much anyone says otherwise.

Forget the level playing field. There's no such thing. Let's look at the facts:

1.       The nuclear industry would not exist without the Price Anderson Act, which allows nuclear power plants to operate without accident liability. Without that Act, lenders would charge double today's interest rates to cover their risks, and nuclear would be uneconomical. Why do you think the first thing any President does to awaken the nuclear industry is promise it loan guarantees? Is it even necessary to add worries about terrorism and spent nuclear fuel to see how much society buries its anxieties about nuclear in extra, but hidden support?

2.       The coal industry kills people underground, kills them above ground with particulates, and is the biggest source of carbon dioxide. The people who work in the mines are being replaced by machines and explosives, and those machines and explosives remove mountain tops or strip mine the West. Coal ash is the spent fuel of coal power plants, buried under golf courses and erupting from rupturing ash ponds. Where in the price of coal are those costs?

3.       Natural gas is the great white hope of traditionalists, and our confidence in it depends on an overnight doubling of reserves created for a desperate audience by calling shale gas safe and clean. Even without shale gas, pipeline leaks and explosions in Michigan and California form the backdrop to drilling platform explosions in the Gulf. Natural gas is not a dependable solution, even if we wish otherwise. But it has a tremendous hidden subsidy - if its price goes up, the Public Utility Commission will automatically pass it along to you. Do you know this? Do you consider it a subsidy? Has it melted into the woodwork, along with all the other weirdness we call a level playing field?

4.      Three dollar a gallon gasoline may be something Joe six pack has gotten used to, but it's equivalent to 36 ¢/kWh electricity in terms of energy content for moving a car. PV and wind are half that price, if only we had the cheap batteries to go with them. Persian Gulf blackmail and Gulf of Mexico explosions top off the list of offenses of this essential component of today's level playing field.

Society has made choices and continues to make choices that favor traditional energy sources. When we have a series of accidents in the Gulf, our Southern politicians call for more drilling not more safety. Long ago, they were co-opted by the tilt of that playing field, necessitating they ignore accidents and environmental degradation. The same is true of Appalachian politicians. This is the power of the tilted level playing field in action, and we hardly notice it. We think it's "normal and rational."

What will happen to the level playing field? As alternatives like PV, CSP, and wind become more and more convincing and familiar, the level playing field will shift again and deprive the traditional fuels of their favors. Instead, the favors will become foundations for solar, wind, and electric transport. That will become the new level playing field, and no one will call it otherwise.

Those being marginalized will complain, but their voices will fade. The rest of us will either enjoy the change or look the other way, if we even notice it. When the transition is over, we won't even remember the process. We'll say solar, wind and electric transport became cost effective.

It isn't fair or right to expect PV to become cost-effective without any societal help. But, shhhhh…we don't need to say anything about it. Soon, once society likes PV enough, it will help it in such a way that no one notices anymore, like it does now for coal, nuclear, oil, and gas.

Ken Zweibel

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Scott's Contracting
scottscontracting@gmail.com
http://www.stlouisrenewableenergy.blogspot.com
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scotty@stlouisrenewableenergy.com