The "New Energy Economy": An Exercise in Magical Thinking

Energy economics is known as a subclass of the economy that focuses on its relations with energy as the basis of all other relationships. It is also established as a subclass of the ecological economy insofar as it assumes that the food chain in ecology has a direct analogy to the energy supply chain for human activities.

Now, the “new energy economy” is considered for some as an exercise in magical thinking.

Certainly, a movement has been growing for decades to replace hydrocarbons, which collectively supply 84% of the world’s energy. It started with the fear that we were running out of oil. That fear has since migrated to the belief that, due to climate change and other environmental concerns, society can no longer tolerate the burning of oil, natural gas, and coal, all of which has proved to be abundant.

So far, wind, solar and battery power, the preferred alternatives to hydrocarbons, provide about 2% of the world’s energy and 3% of the United States’ energy.

Claim that it has gained accelerated popularity

It should be noted that a bold new claim has rapidly gained certain levels of popularity, which we are on the cusp of an energy revolution driven by technology that not only can but inevitably, will quickly replace all hydrocarbons.

This “new energy economy” is based on the belief, a centerpiece of the Green New Deal and other similar proposals, both here and in Europe that wind and solar energy technologies and battery storage are experiencing the type of disruption experienced in computer science and communications, drastically reducing costs and increasing efficiency. But this central analogy overlooks the profound differences, based on physics, between systems that produce energy and those that produce information.

However, it has been indicated that there is no possibility that the world is experiencing, or an experience, a short-term transition to a “new energy economy.” Since scientists have yet to discover, and entrepreneurs have yet to invent, something as remarkable as hydrocarbons in terms of the combination of low cost, high energy density, stability, security, and portability. In practical terms, this means that spending $ 1 million on wind turbines on a public utility-scale, or solar panels each, for 30 years of operation, will produce around 50 million kilowatt-hours (kWh), while an equivalent $ 1 million spent on a bituminous shale platform produces enough natural gas for 30 years to generate more than 300 million kWh.

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Source: Mark P. Mills | Manhattan Institute