Krugman Chastises 'Right' for Not Taking Wind Energy Seriously
It may be less efficient and more intrusive than other forms of alternative energy, but harnessing the power of wind is “every bit as serious” as other options, according to MSNBC “Countdown” host Keith Olbermann and New York Times columnist Paul Krugman.
“This [supporting corn-based ethanol] is a problem, not Obama’s best thing, but you know nuclear – there is this notion on the right that nuclear is serious and wind is not,” Krugman said on Olbermann’s show June 25. “But the fact of the matter, given what we know, wind is every bit as serious, and maybe more so, as an alternative to burning fossil fuels.”
“Drive from Los Angeles to Palm Springs some time and tell people there that wind is not a good answer,” Olbermann said, referring to a stretch of Interstate 10 in California.
Olbermann and Krugman ignored the problems with wind as a primary power source: inconsistency and expense. According to an article by Jack Spencer and Nick Loris of The Heritage Foundation published on June 19, the uncertainty of wind and cost of windmill farms pose some serious obstacles.
“First, wind is intermittent, producing electricity only about a third of the time,” Spencer and Loris wrote. “This means that power plants are needed to provide electricity when the wind is not blowing. If one is going to rely on wind and the additional power-generating capacity that is needed when the wind is not blowing, those additional costs should be assigned to wind power as well.”
“Second, the life expectancy of windmills is projected to be 20 years,” Spencer and Loris continued. “Nuclear power plants produce power for up to 80 years. This must be taken into account when considering costs.”
Krugman also criticized Republican presidential candidate John McCain’s proposed energy policy, specifically his support for offering more leases to drill in federal lands to expand oil supplies.
“Let me say, I think McCain has bought into the notion that there is a kind of a panic, that speculators are buying up energy resources and that’s what’s driving up the price,” Krugman said. “And if you do something that’s psychological, that says there’s going to be a gusher of oil coming off the continental shelf, then that would drive the prices down.”
Krugman contended that the market has already answered. Since oil prices are high, he claimed, that shows traders don’t believe new drilling will occur. He indicated he didn’t think prices would change even if McCain’s proposal succeeded.
“The problem is it’s not right,” Krugman added. “It’s actually very strange for someone who supposedly believes in free markets to think that there is this psychological thing that speculators are driving it. You know, aren’t we supposed to believe that markets get things right? And so he’s got this idea that if we can just do something, even if it’s basically irrelevant, it’s somehow going to make a big difference in the current situation. And this is not good policy.”
However, the market is operating under the assumption the federal government won’t react. NYMEX Light Crude Oil futures prices are quoted as far into the future as December 2015 and if traders knew more oil would come into the market in advance, it would have a “psychological effect” on traders.
“Well I think that the price would adjust actually as soon as you started drilling it,” James Hackett, president & CEO of Anadarko Petroleum ( NYSE:APC), an oil and gas exploration and production company, explained on CNBC’s June 23 “Kudlow & Company.”
“There’s a psychology with regard to speculative elements in any commodity market, whether it’s grains, or metals, or oil and gas,” Hackett said. “If the world really felt that there were plenty of places to go look for oil and gas, the markets would start trading as if that were a reality.”
“Today it’s quite the opposite reality, especially with the geopolitical elements overlaying that,” Hackett continued. “So, every time we say to the world, ‘We want energy security, but we want you to produce it, and we’re not going to do anything,’ the elements in the trading community say, ‘well that means that access is getting tougher.’”