“Like I said JC very few people know or understand how power is generated.”
For any expansion in productive capacity, an expansion in power generation must be the first tent pole to go up. Since the expansion of productive capacity always involves a lengthening of the structure of production and not merely the replacement of older machines with sleeker flasher models.
Hence a disproportionate increase in energy consumption is the first step to growth. Now it ought to be the case that energy-efficiency comes in as an afterthought, and since both these developments would overlap, it would not be immediately apparent; the criticality of always having vast excess energy-production capacity at all times.
But you won’t even get to the energy-efficiency stage if you don’t have the extra power generation capacity rigged up years ahead of time. And in fact it is only surplus capacity that will keep prices competitive in a situation that does not really lend itself to a fully competitive market.
The all time champions for improving their energy efficiency were the Japanese during the 70’s. But note that they were able to respond to the high energy prices in this way because they then had a tiny government fiscal overhead, and the highest savings rates for both corporations and individuals of any country around.
Now here is the thing. Investing in energy efficiency ITSELF REQUIRES THE PRODUCTION OF CAPITAL EQUIPMENT. Buggering our energy production will actually retard progress in this area. The problem has always been that company tax and easy money dulls the ardour to spend money today in order to reduce recurring costs. And spending is diverted to other goals like fighting for a few more clicks of market share. This is why we haven’t gone ahead with energy efficiency in the way that some lefties would wish it. And not because we need to be bullied or deprived of cheap energy in order to invest in efficiency.
As well technology is imbedded in the rate of capital update. So slowing capital update and accumulation, via buggering our energy production, puts a spanner in the works when it comes to finding and establishing complementary energy sources to coal oil.
So I wasn’t messing about when I assured you that the carbon tax in 2009 will be an unmitigated disaster. You could get away with it in 1960. You cannot get away with it now.
If there is a sentimental attachment to the idea of shifting to alternative energy some decades before the market would really truly require it well fine. There are ways to do this. But not with either government spending, not motivated by ludicrous science fraud, not involving compromises with leftist irrationalism, and if its important to do this, then the only good way to do this is with long-term tax exemptions, and if this is so bloody bleeding critical to get done, well its got to be paid via monies saved from closing down one government department after another. Surely this is not too much to ask if the people in those government departments believe that by taking up careers in private industry they are saving the world, the polar beers, the Maldives, and every last one amongst the unhappy and deprived millions of Pakistan.
But even such a sentimental project as prejudicing the uptake of various alternatives to coal and oil somewhat ahead of time really has to wait until the energy crisis is over, if this means the diversion of capital away from all the most economic alternatives available in what will be a looming near-energy-capital-vortex.
The best way of getting through this near-energy-capital-vortex (as implied by my reference to Japan) is directly through small government and monetary reform. But it certainly would be an advantage, to get rid of all company tax on retained earnings, for energy production companies by say next Wednesday, if we cannot see our way clear to sack enough public servants, to immediately get into budget surplus and get rid of the company tax for everyone across the board.
I don’t know WHY we couldn’t see our way clear to get to this point right away? I don’t see any ethical reason not to immediately sack enough people to produce powerful surpluses, get rid of the company tax, and pretty much any other tax that impinges on capital accumulation.
Like since we were going into hard money we could immediately call a before and after date for one week from now. And any legal debt contracts concluded prior to that date, or definitely in process this very day, could be registered, and for tax purposes both the payment of interest AND principal could be tax deductible. Strong warnings about taking on more debt could be put about, insofar as it would be important for people to understand that monetary conditions would become such that it was in the interests of most people to pay down debt rather than take on any more.
You could cut tax on interest earnings. You could make private investment in NEW SHARE ISSUES a tax deduction for a sunsetted period while companies were struggling adjusting their debt/equity balances to the new dispensation.
But the easiest and fastest way to increase our capital formation (((in order to cope with the coming near-capital-energy vortex)))) is to slash the size of government. I cannot see any practical, ethical, equity, economic, cultural, or other reason not to be pinning our ears back towards this culling of governement departments. I couldn’t care if we vastly overcompensated the sackees with way too much in the way of tax vouchers. So what if they headed off with a bigger tax exemption voucher than they deserved? So long as we cut the blood-sucking overhead that they represent. So long as we got them making a contribution during their work hours for a change.
“Like I said JC very few people know or understand how power is generated.”
I’ll try and describe for you all what goes on when you are too close to capacity with energy generation.
Some of you closet greenies and neoclassical economists, with your focus on “households” and the retail end, might be thinking its all excitement, and adventure for the kids, when the power goes down. Some of you might think that its all fun, games, candles and baby-making in a thrilling few hours where less CO2 is being sent into the air around us.
But its a disaster economically. Its not a small thing. Having to run the grid at near full capacity all the time is a set of circumstances that will send the economy backwards.
This is sort of how it works:
THE FRAGILITY OF ELECTRICITY GENERATION. EXCESS CAPACITY IS CRUCIAL.
Now you have a turbine running. Its turning through a magnetic field which is creating a resistance. You have all these transformers all over town.
That giant turbine cannot be let slow down because it will take hours to fire it up again. So if its slowing the resistance must be eased. The strength of the field must be reduced. Hence electricity generation must be reduced if the giant turbine is losing momentum.
The transformers are all over town. They might be dealing with 132000 volts or something. ACDC. And they cannot be allowed to drop below about 49.95 Hertz or they will do just enourmous damage, screwing up everyones electrical equipment. The company could then rightly be sued in the hundreds of millions for just a single incident.
So if demand for energy exceeds what the system can handle one of the transformers must be shut down causing millions of dollars in lost production.
So supposing we open up a lot more land for housing development or we have some sort of investment boom, double digit GDR growth and all that. The energy production must always be the first and tallest pole for the tent. We must have an investment environment that leaves us with massive overcapacity at all times.
If the new suburbs and economic growth goes ahead without this overcapacity we can bugger ourselves up.
Because the new investment itself will quickly mean a greater demand puts matters far far above where the already struggling energy production companies were capable of dealing with. Hence blackouts can start and become so frequent that it is nearly impossible for all of us to dig ourselves out of that whole. One area has to be closed down after another. Maintenance has to be put off and then of course problems develop so the blackouts can become vastly longer and now can last a dozen hours at a stretch. And how can the extra investment to solve this sort of problem come about when this vortex is already reached?
Writing on my blog 17 months ago I claimed:
“I have anecdotal evidence that our system doesn’t have much excess capacity.” Of course matters must be closing much closer to the limits than they were back then.
In wartime a single bombed coal-electricity plant could screw us up bad when we don’t have massive extra capacity and DISTRIBUTED AND DECENTRALIZED capacity at that. Under the dangerous, almost insane conditions that we have now in NSW, a single bomb to a single electricity generation plant, could make it nearly impossible to conduct sane econonmic activity while our boys got on with the butchering.
A few weeks ago we had the first power cut in years where I work. It was before 1.00 am in the morning and no lights could be seen anywhere close by. The power was down two hours or so. But when it came up again there were all these problems to do with resetting the computers. So almost the whole shift was wasted with tens of millions of dollars equipment out of action and the payroll leaking cash with only odd chores to show for it.
I cannot believe the smugness with which virtually all of you have approached these matters in the last 3 years. The smugness with the attack on science, on public honesty, on our sovereignty, on the place of commonsense when dealing with alleged experts.
Those of you in a guilty fear and trembling about the revenge of Gaia (An angry Yaweh in drag) turn it around when I try to talk about real problems. You know real problems. PROBLEM problems. Problems based on fact, sound evidence, and not on leftist fantasies, hectoring, filibusters and irrelevant claims of consensus.
You turn it around as if I am talking about personal anxieties rather than public policy. As if my tone isn’t about the sheer exasperation of attempting to deal with people who seem to be smug nihilists, who never want to listen, and who harbour some crazed demarcation deferential treatment, when it comes to alleged experts in the various specialties.
Its could be this professional-courtesy-from-Hades that really bugs me about it all. Its that, other things, and also this ghastly occult-epistemology where one appropriates an idiotic benefit-of-the-doubt and then filibusters using a bonehead process of pre-emptive Popperian faux-falsification ……. whilst figuratively keeping your fingers pushed deep inside your earholes.
This is a big problem. And the most fucked-up and unacceptable thing you can do is claim that they will have an anti-CO2 policy come rain or shine and so our job is to get our preferred anti-CO2 idiocy through. The idea is to stop it and work for its repeal. Not to back the wrong side. We’ve got to all be on board for stopping this nauseating racket and not nuanceing it. Stopping it. Shaming it. Abusing it. Squashing it. Obstructing it. Fighting it. Killing it. NOT finessing it.