Energy is the #2 cost in many companies. During a statistical analysis of energy use by plant location in the 10 county Houston metropolitan area I found incredible amounts of energy required by manufacturers. Stuff that you wouldn’t necessary think of until you start breaking down the details.
Cooking raw sugar and turning it into white sugar, for example, requires incredible amounts of heat and steam. And generating steam requires a lot of energy. Steam is very expensive to generate and almost impossible to store. The cost of steam is so high that plants measure steam loss by the second.
Producing magnesium as a metal is a large scale electrolytic process. The emphasis is on electrolytic. The plant I visited measured current in 10’s of thousands of amperes. There was so much power that the PC screens in the building had to be triple shielded or the magnetic field of the power distribution system would mess with the displays. Huge annual cost of energy.
Where industry and commerce require significant amounts of energy to operate, these businesses become very sensitive to the cost of energy. The same is true for individuals. As the cost of gasoline increases we must individually choose to use less, or since some people don’t have the option to use less, pay more for gasoline and have less income to spend on other things.
Energy policy under the direction of the DOE and Congress has promoted solar power and wind power over coal, natural gas and nuclear energy. There are two problems with this approach. First, these technologies are very expensive. Any time someone promotes technology and won’t talk about cost, you should be suspicious. And that has been the history of alternative energy.
The second problem is that there is currently no way to store the power that is generated. So unless you can use the power immediately, you’re in trouble. A popular solar project is cited that used solar panels to generate peak power during the summer afternoons during periods of increased power demand when high air conditioning loads are required. This is still a very expensive solution, but where the utility charges 3 or 4 times more for electricity during peak demand periods, this solution makes sense. But it is a very limited application.
The question is, who decides how much energy will cost in the US? State governments grant permits to open a utility. They also decide what the utility companies’ goals will be. The DOE has created consensus about alternative energy without approval from Congress.
Do the decisions of the government make sense? That’s where the controversy starts. If you are trying to run a business, then anything that increases costs is probably bad. But no one in government appears to be listening.
Many businesses and almost every consumer is impacted by the decisions made by government. Every extra dollar that is spent on lighting, heating and cooling, and transportation is a dollar that is no longer discretionary. So maybe that’s the real question. Who decides what you and I spend our money on?
To the extent that government Policy causes dollars to be paid as increased energy expense, then the rest of the consumer economy suffers. Which is part of the current problems that our economy is currently experiencing.