Mandates Under Attack

April/09/2011 16:18PM
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Supporting wind power with tax dollars is like closing Gitmo. It is impractical and won’t happen long-term. Wind competes with natural gas. Natural gas is being discovered every day in the US. Supplies are up and prices are down. The gap between power generation by natural gas and wind has widened. Wind farm developers are backing off. Power companies are backing off. Existing wind power producers are cutting prices. This is the marketplace at work. Capitalism at it’s very best. But, in this day and age there is always a threat to both the free market and capitalism. It’s called government.

But, even ethanol, the poster child for government intervention in the free market is under attack. There is a bill working it’s way through congress that would eliminate ethanol subsidies. That should be the end of ethanol. But, Obama cites ethanol as one of his plans to cut foreign oil imports. He and his administration want to extend the mandate to mix even more ethanol in your gasoline. Of course, if the subsidies end, your gasoline price will go up based on the percentage of ethanol mandated. It could be a dollar. Can Obama defend this? No, so the mandates will end too. Ethanol producers will be left blowing in the wind. The fate that often happens when businessmen get into bed with government.

Also left blowing in the wind might be wind farm investors. If Obama doesn’t find a way to stop the flow of natural gas in the US, which he is on record trying to do, wind will fail. Unless mandates are kept in place. Mandates that power companies must have a percentage of green energy in their power production mix. Those goals as they are set now will happen just like Gitmo will close. Everyone in the country knows the goals can’t be met, but the goals remain in place. At some point reality will kick in. If it doesn’t, like the aforementioned $1 hike in gasoline prices, a 25% in utility bills to meet some lowered mandate will take out a ton of politicians. Not to mention create a ton of new foreclosures.

If the government gets out of the ethanol business and stays out of the natural gas production business, both ethanol and wind will go away along with the mandates that mess with the free market.

The evil oil industry without help from government or your tax dollars will have solved both problems. Natural gas can be used for transportation and power generation. Your $5 billion in tax dollars to support ethanol can be saved. Your billions in subsidies for uneconomical wind power can be saved. Food prices won’t go through the roof with 40% of the corn crop going to ethanol. Subsidies for electric powered transportation can be saved.

But, if mandates stay in place, none of this happens. The only way mandates go away is if Obama goes away.

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