Red Flags in Texas

February/11/2011 16:00PM
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The recent storms in Texas caused rolling brownouts in wide areas. Naturally, a big investigation is underway to see if obscene profits were a motive. Of course, common sense would lead a rational person to think that power plants, suddenly needing natural gas to produce power, doesn’t make the natural gas materialize at the power plant’s gate. You may believe that natural gas comes out of the ground, jumps into pipelines, and is whisked to your home. But, in truth, natural gas must go through a processing plant to take out sulphur and impurities. In cold weather and storms, these gas processing plants can be slowed. Pipelines can be slowed. Demand in one place does not automatically put supply there. This will be the end result of this investigation, just as it has been in the 20 Congressional Investigations over high gasoline prices since Jimmy Carter mis-ran the country.

But, think about this. Governments at the national and state levels have mandated that growing percentages of your power in the next few years must come from renewable sources. In storms, like those in Texas, will those power sources be disrupted? Certainly, solar would. And in weather too mild, wind might.

So your local power supplier is set up to produce X amount of power from conventional sources and get Y from renewable sources. The Y power is not there. The back-up is almost always natural gas. They can’t get fuel oil fast enough and there will be restrictions on coal. How does the missing Y power materialize? It won’t, just like it didn’t in Texas.

Could your government in it’s infinite wisdom be setting us up for an endless life with rolling brownouts, like Texas just enjoyed? No heat or lights in a storm?

Going back to Jimmy Carter. In his infinite wisdom, he created artificial energy shortages in the 70’s with price controls. I was in the business and I remember how his allocation program became a Bernie Madoff ponzi scheme where the same barrel of oil changed hands several times as those who were granted an allocation found they could make more money by selling that barrel to someone who would pay more than to use it. Small business people and minorities with no customers were granted allocations by the DOE and on a priority basis. When Reagan came in and ended the Carter farce, the shortage ended, no more lines at the pump, and prices dropped 200%.

If you think your government can’t create artificial energy shortages by fiat, think again. When you tamper with the most efficient distribution system in the world, you can make a lot of mischief. When you mandate certain types of energy must be used, you can create shortages. The two combined can make Texas happen on a daily, weekly, or monthly basis all over the country.

Have you heard one discussion about this? I haven’t. Is it because the government and the power companies are doing extensive planning to avoid these problems? No, just like in Texas, the planning will start after the problems and the superficial investigations occur. And, the solution, like Carter’s, may be worse than no cure.

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