Fueling a Freer Future
Fueling a Freer Future
Every person uses energy every day. Most from the time they wake up to when they go to bed. It is such a part of daily life that it is easy to take for granted.
But it’s important to understand that this is a very modern phenomenon. Not that long ago, even the wealthiest kings could not have imagined the energy the working class has at its disposal today.
The use of fossil fuels: coal, petroleum, and natural gas.
Yes, the energy sources demonized by politicians, activists, and professors throughout the world are what revolutionized humanity’s quality of life.
Why? Fossil fuels are cost effective. They are reliable. They are portable. And these qualities are what allowed for a boom in automated factories, transportation, indoor heating and cooling, and so much more. For most of human history, the average life expectancy was around thirty years. Populations remained relatively stagnant for centuries. Then, fossil fuels sparked the Industrial Revolution, creating a boom for humankind and changing everything.
Our planet now supports eight billion people. For most of human history, it could not even carry close to one billion. Without the conditions created by fossil fuels, at least seven of every eight people alive today wouldn’t be able to survive, let alone thrive the way humanity does today.
No segment of the population has benefitted more from this improvement in material well-being than the most vulnerable among us.
It is stable, reliable energy that allows premature babies to have a chance at life. It is refrigeration that allows those working paycheck to paycheck to keep their food safe to eat. Air-conditioning makes it possible for people in the warmest places to comfortably survive the summer and warms people in the coldest places through the winter.
Once we appreciate the incredible impact fossil fuels have had on civilization, we can seriously consider the energy debate going on around the world. Before we can decide what changes we should make to our energy consumption or “carbon footprint,” we need to fully appreciate what we’re trying to replace and the real-world consequences of the alternatives. We need to understand what might really motivating fossil fuels’ most vocal critics.
Thinking like an economist means thinking about the unseen, not only what we see around us.
And in this series, we are going to dig into the unseen of energy.
If we start with an appreciation of the role energy abundance has played in improving the material existence of humankind, we can consider why fossil fuels played this historic role in our energy consumption and what we should keep in mind when looking for alternatives.
Human energy use did not begin with industrialization.
Fire is an obvious source of energy, used from the earliest days of man. Our own bodies, burning calories as we breathe, are an example of energy consumption. Wind and animals were used for transportation. What made fossil fuels revolutionary is their cost-effectiveness.
In his book Fossil Future, Alex Epstein simplified the issue of cost-effectiveness into four points:
- Affordability: How much does energy use cost relative to how much money people have?
- Reliability: Can it be produced “on demand,” in as large a quantity as needed?
- Versatility: Can it power many kinds of machines?
- Scalability: How many people can it power, and in how many places?
By these measures, fossil fuels continue to stand alone.
Let’s take gasoline as an example.
While prices can fluctuate, such as when gas production is impacted by international crises, gasoline remains affordable enough that both the elite and the working class use it every day.
Gasoline is plentiful. In fact, thanks to new surveys made possible by technological advancements, there are more known crude oil reserves in America today than there were in 1977. Gasoline is also reliable in that it will dependably power machinery as long as the engine is functional.
It is versatile that in it can power everything from airplanes to lawn equipment.
And gasoline is scalable in that once sealed in a drum or vessel, it can be shipped anywhere in the world and can sit in storage indefinitely without losing its potency.
Natural gas and coal also have these qualities, which explains why countries like China are increasing their investment in these very fuels even while Western leaders make expensive commitments to move away from them.
In fact, it is the reluctance of North America, Europe, and other economies to do the same that is creating the real fossil fuel crisis: a future of declining reliable energy sources. While global turmoil between Russia and the West has forced European countries to consider the realities of energy scarcity, less developed parts of the world have not yet enjoyed the societal benefits of energy abundance, even in peace. In parts of Africa, for example, energy rationing limits access to life-saving medical equipment. In other areas, unreliable energy sources severely limit industrial capacity.
While America has the natural resources to significantly increase fossil fuel production, energy companies are unwilling to invest in expensive new refineries that will not be profitable for many years. By pushing energy policy away from promoting production and toward other aims—such as alleged environmentalism—North America and Europe are making reliable energy resources more scarce at the expense of their citizens and the rest of the world.
Ironically, those that pay the most lip service to “environmental justice” are promoting policies that directly result in the suffering of the most economically vulnerable in the world.
But do green activists’ preferred alternatives have fossil fuels’ useful qualities? Can humanity rely on them? That is the topic of our next video.
As we noted in the previous episode, fossil fuels sparked an energy revolution that forever changed our concept of comfort. Powerful individuals around the globe are advocating for a radical change in our energy consumption, and they claim that what are branded as “green” or “renewable” energy sources can replace fossil fuels.
But these so-called alternative energy sources really are not alternatives at all.
Let’s recall the four characteristics of cost-effective energy: affordability, reliability, versatility, and scalability.
Consider two of the most popular “green” energy sources: solar and wind power.
Solar and wind make up a large part of almost every prominent alternative energy program and have been heavily subsidized by government spending. Solar and wind proponents proclaim that these energy sources have a lower environmental impact than fossil fuels, have enjoyed increased popularity in recent decades, and have become cheaper over time.
This overlooks some important details.
Looking at the places where solar and wind are most popular, we see an interesting pattern: the cost of energy tends to be much higher. Why?
One reason is that while harnessing sun radiation or strong wind may seem like a low-impact form of energy creation, the machines needed to harness this energy—like solar panels and windmills—are resource intensive. In fact, using solar and wind equipment to generate a given amount of energy requires ten times more mined materials than using fossil fuels. When these machines break down, their disposal creates yet another environmental burden.
Another problem is energy dilution, which is the efficiency that is lost when energy is transported over distance or time. Larger commercial solar and wind farms tend to be far away from neighborhoods and other population centers, so extensive infrastructure is required to transmit the energy to people’s homes and businesses, and a lot of energy is lost in transit. On the other hand, home solar panels require large batteries to store energy for periods of low sunlight. Over time, these batteries’ ability to hold a charge diminishes.
The concerns about reliability don’t end there. While battery technology may allow a household to prepare for recurring low-sun periods, extreme weather has proven to be deadly for power grids that rely more on wind and solar.
For example, a powerful ice storm can freeze windmills, halting energy generation at a time when heat is desperately needed. The 2021 winter storms in Texas saw people freeze to death in their homes because of the catastrophic failure of a power grid due to reliance on wind energy.
Even the European Greens’ ambitious plans to close coal power plants have stalled in the face of the reality that even heavy subsidization of green energy cannot replace traditional power sources.
While solar and wind can serve as supplemental energy sources, they are nowhere near close to being a serious alternative to fossil fuels, and it is unlikely they will ever be able to replace traditional energy sources.
This inconvenient truth has not stopped politicians, celebrities, activists, and other global leaders from advocating for banning fossil fuels.
While solar and wind make poor replacements for fossil fuels, there is one alternative energy source that could potentially replace them: nuclear.
In spite of coming into public view under the shadow of the atomic bomb, significant global investments in nuclear power plants were made from the mid-1960s up until the early 2000s. Unfortunately, tragedies such as the Chornobyl meltdown caused by Soviet incompetence and the fallout from the tsunami-damaged Fukushima power plant in 2011 led governments to close existing nuclear reactors and foreclosed the building of new ones.
The stagnation in global nuclear policy has occurred alongside an increase in climate change concerns.
While nuclear power is a proven, viable alternative to fossil fuels, a meaningful increase in nuclear power would require a significant change in political policies, as well as investment in next-generation energy infrastructure. These may be wise policies for the future, but they are not practical for those demanding a radical shift away from fossil fuels within the next decade.
For context, to replace fossil fuels with nuclear energy in twenty-eight years, four one-gigawatt nuclear power plants would have to be built every day. In the last thirty years, four gigawatts of nuclear capacity have been created only every 540 days.
Other alternatives to fossil fuels and green energy have been considered as well, including hydroelectric, geothermal, hydrogen fuel cells, and biomass.
None of these are in a position to replace fossil fuels within the next few decades. All of them have been the subject of additional objections by various interest groups that are concerned about global warming. For example, environmentalists have raised concerns about the impact of building hydroelectric dams.
Most importantly, the innovation required to come up with a new energy source that has fossil fuels’ benefits and little impact on emissions requires a very unique natural resource: human genius.
Only in a society that prioritizes human creativity and entrepreneurship can individuals make the sorts of breakthroughs necessary to revolutionize energy production. Yet it is precisely this human element that is ignored, and often explicitly demonized, in favor of “the end is near” hysterics.
The result is an intellectual environment that makes it difficult to seriously discuss the tradeoffs inherent to energy policy and environmental protection.
Far too often, the discussion over “energy” begins with a variety of assumptions that go unchallenged. The first is that energy policy should first and foremost be about environmental impact. The second is that traditional fossil fuels are obviously bad for the environment. This leads to the third, that society must obviously change its energy usage to stop an environmental disaster from happening.
These assumptions are so ingrained in the conversation that even opponents of green policies often base their arguments on them. Team blue may say that we need more taxes and regulations to force a change in energy use. Team red may argue that only by getting the government out of the way will business innovate its way out of fossil fuels.
What everyone seems to agree on is that fossil fuels are a bad thing and that transitioning to alternatives is a necessary part of a better future.
But what if these assumptions are wrong?
Should energy concerns be focused primarily on the environment rather than human well-being? As we’ve noted, the environmental impact of so-called green energy is greater than many believe, but even if this were not the case, would an energy source that is unable to support as many people as fossil fuels but is less environmentally harmful necessarily be “better” for society?
Proponents of the energy revolution argue that environmental crises will prevent human thriving. They warn of violent weather and destroyed farmland. Yet this is not what we’ve seen. In fact, climate deaths have declined over time, despite the media’s attempts at rebranding extreme weather events as modern phenomena. Farmland and food supplies have increased. Interestingly, many of the same individuals concerned about global warming and rising sea levels are continuing to buy houses and property on beautiful coasts.
In fact, the actual findings of the institutions that push the hardest to change our energy consumption do not match the severity of their rhetoric.
For example, government officials looking to promote alternative energy celebrate the work of Nobel Prize–winning economist William Nordhaus. While Nordhaus will often talk about the need for an energy revolution, his own work tells a different story.
A 2018 United Nations report he assisted with outlined a variety of global polices—such as phasing out fossil fuels—needed to limit global warming to 1.5 degrees Celsius.
While the headlines lauded the report as clear evidence of the need for a green energy revolution, a careful analysis of Nordhaus’s economic model revealed just the opposite. As economist Bob Murphy has noted, Nordhaus’s own findings show that the economic costs of achieving the report’s policy goals would be greater than the projected damage done by a higher rate of global warming.
To recap, the UN’s own analysis, conducted by a Nobel laureate specializing in the economics of climate change, shows that its policies would be more detrimental to the economic well-being of society than they would be beneficial to the environment. This is without question what would happen if the UN’s goals became reality. Many nations, such as China, seem to understand this and have made it clear that they will not be complying with these policies.
The hysterical nature of contemporary energy discussions has been great for the activist class, but it has had terrible consequences for intellectual debate, government policy, and the economy. The justification for this aggressive approach is the repeated warning that a failure to act will result in global catastrophe. In our next video, we will look at the poor track record of doomsday environmentalist prophecies.
In 1968, two Stanford professors, Paul and Anne Ehrlich, wrote a book at the suggestion of the executive director of the Sierra Club, a prominent environmentalist organization. Titled The Population Bomb, the book warned that increasing birth rates—helped by the abundance of energy—would become a species-level crisis. Too many people would mean too little food, water, and land.
Chaos would erupt.
Doom would follow.
All of this would happen in the coming decades.
The book’s ideas were not new. They were a modern repackaging of the economics of Thomas Malthus, who warned that an increase in economic growth would inevitably lead to a higher population than natural resources could sustain.
What both Malthus and the Ehrlichs failed to foresee was the degree to which human ingenuity would lead to innovations that would meet growing human needs. The result is that even though the population is larger than ever, the world’s food production per capita has never been higher than in modern times.
But tragically, fallacious Malthusian ideas have had a real-life impact on government policy. For example, lingering concerns about the population bomb led to horrific population control programs in countries around the world. Most know about China’s one-child policy. Less known is that the Peruvian government used US foreign-aid money to sterilize indigenous women involuntarily. Other population control policies were implemented around the world
The failure of these predictions has not disgraced the Malthusian worldview, however. In fact, its advocates continue to be treated as respected leaders in their fields. In 2023, Paul Ehrlich appeared on 60 Minutes to offer new warnings of extinction, despite a fifty-plus-year track record of being wrong.
The unfortunate reality is that predictions of environmental doom are useful for those that desire power. The greater the threat, the more power is needed. As history has shown, the government grows in times of crisis and rarely ever shrinks once the emergency has passed.
Even as concerns about global cooling have transformed into worries about global warming, the underlying need for power remains: the government needs to regulate, tax, and enjoy generally greater control over the organization of society.
This does not mean, of course, that all warnings about pollution and other negative externalities are not justified. What it does mean is that politicizing science is extremely dangerous. Whether it’s climate change, foreign policy, or covid-19, the unfortunate reality is that those that argue for aggressive state intervention are often rewarded with increased government funding. We pay for it with taxes, higher prices, and a loss of liberty.
The incentives of institutional research matter. In today’s world, they are too often guided by politics, not science.
In 1944, F.A. Hayek published The Road to Serfdom, a book warning about the dangers of normalizing wartime planning in the West.
The book, dedicated to “The Socialists of All Parties,” became a great commercial success, particularly among business leaders in the United States who were resisting the radical policies of President Franklin Delano Roosevelt.
It begins with government leaders who can convince large portions of the population to adopt regimentation in the pursuit of utopian national goals, like a society without want.
The issue is that these utopian plans cannot be maintained. As the government falls short, interest groups compete for political power.
Divides within society create unrest that is met with brutish force. Society finds itself under increasingly tyrannical control. To maintain unity, the government regulates speech. The result is the rise of a total state.
Hayek was writing about the authoritarianism affecting all the nations involved in World War II. But his warnings have renewed relevance today because of the utopian dreams of the modern political Left. Climate change has given political actors a justification for seemingly unlimited power. Politicians have argued that a government response requires everything from global carbon taxes and bans on fossil fuels to control over the most minor decisions we make, such as what we have for breakfast and how often we flush our toilets.
Environmental doomsday warnings have proven to be successful in modern democracies. This has been particularly true in Europe, where explicitly green political parties have won parliamentary seats in a number of countries.
Other political parties have adopted these groups’ policy aims out of their own interest, resulting in deindustrialization policies that have made their economies less prosperous and more fragile. But the damage isn’t simply done through bad government policies.
The underlying message of the green energy revolution is that human existence is a plague upon the world. There are additional social costs to this demagoguery. These ideas have bred a social environment of nihilism and self-destruction. These results can be seen in activists’ attempts to destroy priceless historical artifacts or in increasing numbers of young people’s choice not to have children in the name of the environment.
These people are all victims of a relentless propaganda campaign by universities, media outlets, celebrities, and others to promote an agenda that simply isn’t compatible with human thriving. This campaign has created an ethical ethos that seeks human destruction.
People who have no hope for the future tend to be those most easily manipulated and controlled by those in power. Demoralizing a population is one of the most effective ways to undermine resistance.
This is precisely the sort of dangerous social dynamic Hayek warned about. In our next video, we will look at the Green New Deal advocated by the American Left and see how a “green revolution” will lead directly to an authoritarian state.
Disastrous economic interventionist policies in the early 1900s helped spark a devastating global economic depression starting in 1929. President Franklin Roosevelt came to power during this time and used the Great Depression as a justification to mount a progressive coup against the political traditions of America.
It is with this same ambition that his successors in the Democrat Party have sought to leverage concerns about global warming and fossil fuels to wipe out what remains of the American market economy.
While the “Green New Deal” label has been attached to a variety of policy proposals over recent years, all of them share several common characteristics.
First, the cause of the “environment” and boosting “alternative energy sources” allows for a takeover of almost all aspects of the American economy. Agriculture, for example, must be regulated to limit the bio emissions of crops, cattle, and other livestock. Building equipment must be controlled due to its impact on energy demands. Transportation isn’t only a multibillion industry in itself, but indirectly impacts the employment of everyone in society.
Of course, in the modern political environment, environmentalist concerns must also take into account intersectionality and social justice, incorporating race, gender, sexuality, and all the rest into proposals of job guarantees, subsidies, and other forms of wealth redistribution baked into the specific proposal of the day.
How would such a Green New Deal be financed? As was the case with the New Deal, the answer is through debt and central bank inflation.
In fact, the size and scale of modern proposals have resulted in a renewed interest in what is called modern monetary theory, which contends that governments are free to spend and print as much money as they desire. In practice, similar policies have resulted in hyperinflation and economic devastation in nations like Argentina and Venezuela.
Another common feature of Green New Deal proposals is how obviously unserious they are about actually dealing with climate change and carbon emissions.
And this is the problem, the underlying agenda of the campaign to radically shift away from fossil fuels is not to protect the environment. It is to reform almost every aspect of modern society for political gain.
Given the foundational role that cheap, dependable, accessible energy has played in cultivating both human liberty and human thriving, defending the energy sources the world relies on every day is directly related to defending civilization itself.
Defending fossil fuels is one of the hardest positions to take in modern discourse, but it is a necessary one in a time when ideologues advocate for creeping authoritarianism in our daily lives without considering the real consequences of their ideas.
We must shift the conversation away from climate hysteria and toward human flourishing. So what does a pro-human energy program look like?
First, we must recognize that the true threat to civilization is a lack of reliable energy, not its production. Ideology masquerading as science has resulted in decades of red tape and regulation leading to massive investments in solar panels, windmills, and other energy sources that have proven to be unreliable.
The construction of oil and gas refineries and the production of other infrastructure necessary to grow energy production requires a tremendous amount of capital and time. So long as the shadow of major regulatory uncertainty and privileges for so-called green energy looms over the energy sector, we will not see the improvements necessary to better utilize our reliable energy resources.
We shouldn’t simply rely on traditional energy sources, however. Nuclear is an incredible energy source, with the capacity to provide clean and reliable energy at a low cost. It is a truly viable alternative to fossil fuels. Unfortunately, fear campaigns have built a labyrinth of red tape around nuclear too, effectively criminalizing nuclear power development. This has made the nuclear power that is produced more expensive.
Allowing a market in nuclear power to flourish could achieve the energy revolution so many allegedly desire without sacrificing human thriving.
Responsible civilizations seek serious solutions to the problems they face. Instead, the modern-day environmentalist movements have created death cults that have traumatized new generations.
A 2020 survey found that 71 percent of US millennials and 67 percent of Generation Z feel climate change has negatively affected their mental health. This is the direct result of the teachings of corrupted institutions
, with a long record of promoting false alarmism to gain political control. The battle for liberty rarely enjoys such institutional support.
Telling the truth is often lonely and unpopular.
But we all suffer the consequences of living in a society guided by lies and propaganda.
In the words of Ludwig von Mises, the heroic Austrian economist:
Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way for himself if society is sweeping towards destruction. Therefore everyone, in his own interests, must thrust himself vigorously into the intellectual battle. No one can stand aside with unconcern: the interests of everyone hang on the result. Whether he chooses or not, every man is drawn into the great historical struggle, the decisive battle into which our epoch has plunged us.