Mr. Obama, Tear Down This Wall!

Published September 1, 2009

As President Ronald Reagan famously called upon Mikhail Gorbachev to do to the Soviet Union’s oppressive policies toward Eastern Europe and elsewhere, President Barack Obama should tear down the wall of taxation, regulation, and government-sponsored litigation that prevents American free enterprise from creating the domestic energy production that our nation needs.

But instead of restoring freedom in energy production, the Obama administration and its congressional retainers are now busy building this wall of oppression even higher.

Making Obstacles Worse

To be sure, this administration did not create this problem, but it is pursuing policies that will make it much worse. Under the edicts of their predecessors over the past several decades, a vast system of taxation, regulation, and government-sponsored litigation has been imposed on our energy industries.

Cap and trade is just more of the same. Much more! These policies have created a business climate in the United States that is unfavorable for the production of energy, so most new energy production has been located abroad. Americans therefore now import 30 percent of their energy—a luxury they can no longer afford.

Importing Energy

How much energy does the United States import? While many eyes glaze over during discussions of “gigawatts” and “zillions” of dollars, most of us have seen or read about Hoover Dam—the great engineering miracle that harvests energy from the Colorado River.

Today the three-reactor Palo Verde nuclear power station near Phoenix, Arizona produces six times the electrical energy of Hoover Dam—electricity that powers Los Angeles. Palo Verde was supposed to have 10 reactors, but the other seven were stopped by anti-nuclear propaganda in the 1970s and 1980s.

The actual replacement cost of the three-reactor Palo Verde power station in 2009—leaving out the extra costs imposed by government—is about $6 billion. So, the capital cost of nuclear equipment to replace the electrical output of Hoover Dam is about $1 billion.

American energy imports currently cost about $1 billion per day.

Every day—every 24 hours—the energy policies imposed by Washington, DC destroy an amount of capital that could build the electrical generating capacity of one complete Hoover Dam.

Could Be Exporters Instead

If one 10-reactor Palo Verde nuclear power station were built in each of the 50 states, the United States could be a net exporter of $200 billion per year of energy, instead of a net importer of $300 billion per year.

Actual exports would probably be lower than that because, as energy prices dropped several-fold in response to the end of foreign dependency and installation of the best new technology, U.S. energy use—and concomitant prosperity—would markedly increase.

While not as clean, safe, and inexpensive as nuclear power, a similar scenario would apply to hydrocarbon power development.

A market-based solution to our energy problem would involve the construction of large amounts of both nuclear and hydrocarbon capacity, with each technology built for those specific applications where it is most useful.

Solar Inefficient, Impractical

Energy “expert” Obama spoke recently at Nellis Air Force Base, where government has caused the construction (completed in 2007) of a 140-acre solar array at a cost of $100 million to produce 14 megawatts of electricity when the sun is brightly shining. Nellis AFB reports power output of 30.1 gigawatt hours (gwh) per year for this array.

Obama lauded the Nellis plant as an example of taxpayer-subsidized energy production. He opposes free-market hydrocarbon and nuclear power.

The cost to build (completed in 1988) the three-reactor Palo Verde nuclear power station was $5.9 billion. It produced 26,782 gwh of electricity in 2007. Correcting costs by the U.S. consumer price index, Palo Verde cost $4.35 billion per reactor, and Nellis cost $106 million, in 2009 dollars.

Therefore, each reactor at Palo Verde cost 41 times as much as the Nellis plant and produces 297 times as much electricity while occupying far less land than the Nellis solar array.

That means the capital cost of electricity from the solar array at Nellis is 7.2 times higher than at Palo Verde. With modern designs (the Palo Verde plant is 1970s and 1980s technology) and fuel reprocessing, the 2009 cost of a Palo Verde equivalent is estimated to be about half that of the original plant.

That makes the solar power Obama praised at Nellis 15 times more expensive than nuclear power.

Net Consumer for Decades

Moreover, the Nellis solar power facility actually has not produced any energy at all! The construction of a power plant requires energy and energy equivalents. Until the plant has produced the amount of energy that was required to build it, it is not a net energy producer.

The Nellis solar array required $100 million worth of energy of various forms to build. A large portion of this was in the form of electrical energy. With its current maximum output, this $100 million of capital will be returned at the rate of about 2 percent per year. This assumes a price of 12 cents per kilowatt hour for electricity and 8 cents accounted as return on capital. The remaining 4 cents is needed to pay for operational costs, base load power, grid changes to accommodate the intermittent supply, and other items.

This estimate may actually be overly optimistic, since Nellis Air Force Base advertises the power plant “saves” the base $1 million per year. That’s a return of just 1 percent per year.

So, the Nellis 140-acre solar array is actually a very large battery. It stores the energy required to build it and returns that energy at a maximum rate of 1 to 2 percent per year over a period of 50 to 100 years.

Only after it has returned the $100 million worth of energy does the plant become an energy producer.

Nuclear, Hydrocarbon Efficiency

The cost of Palo Verde, by contrast, was $13 billion in 2009 dollars. Assuming a price of 12 cents per kilowatt hour, Palo Verde produces $3.2 billion per year worth of electricity. Allotting 8 cents to capital return, Palo Verde returns $2.1 billion per year and pays back the entire capital investment in six years.

That means Palo Verde functioned as a battery for six years and then became a net producer of energy.

If we assume a 50-year lifetime for both plants, Palo Verde will produce about $100 billion worth of net energy during that 50 years.

The Nellis installation will never produce any energy at all because the entire 50 years will be spent in replacing the energy used in building the plant.

A small part of the Palo Verde operating cost is storage of spent nuclear fuel—the famous nuclear waste problem. But this problem was entirely made in Washington by onerous regulations that prevent the use of breeder reactors and nuclear fuel reprocessing. When these technologies are employed, as they are in other countries, residual nuclear waste is negligible.

Regarding hydrocarbon power plants, our rulers and their favorite climate Rasputins claim hydrocarbon use causes global warming. Never mind that there is no experimental or observational scientific evidence whatever to support this claim, and that more than 31,000 American scientists have petitioned the U.S. government against those claims.

Solar’s Environmental Destruction

Our 104 remaining nuclear power plants, mostly built with 1970s and 1980s technology, still produce more than 8 percent of the energy of the United States, safely, cleanly, and inexpensively. Their total actual electrical power output in 2008 was 806,665 gwh. This is the equivalent of 3.75 million acres or 5,862 square miles of solar cells like those recently installed at Nellis Air Force Base and lauded by Obama as the advanced technology he plans to force upon us.

To provide 100 percent of U.S. energy needs through Nellis solar power would require installation of about 70,000 square miles of solar panels and equipment at a cost of about $30 trillion, an unobtainable amount of capital.

The 70,000 square miles of solar panels would cover an area the size of Maryland, Hawaii, Massachusetts, Vermont, New Hampshire, New Jersey, Connecticut, Delaware, Rhode Island, and Washington, DC, combined. Those are relatively small states; Oklahoma or Michigan alone would be sufficient, or half of California.

Wind power suffers from the same disadvantage as solar—very large capital costs for very small amounts of energy.

These boutique methods sound fine during televised speeches, but the only methods that actually produce net energy at a reasonable cost are hydrocarbon and nuclear. Hydroelectric power is also practical, but most available U.S. sites are already developed.

Disastrous Government Intrusion

The market, even hampered as it already is by government meddling, knows these things. That’s why less than 1 percent of U.S. energy is generated by wind, solar, and other boutique methods. The windmills and solar arrays sprouting on the American landscape are unsightly reminders of governmental waste of taxpayer dollars, and they are not net producers of practical power for an increasingly energy-starved people.

There is no solution to America’s energy problem other than repeal of the excessive taxation, oppressive regulation, and onerous, government-sponsored litigation that prevents private enterprise—with private, voluntarily invested capital—from building the additional energy production capacity that we require to remain an independent and prosperous nation.

Free enterprise built our energy industries, and only free enterprise can build the new energy capacity we need. It cannot do this, however, unless the enormous burden of taxation, regulation, and litigation (and subsidies of favored industries) Washington has placed on the backs of American workers is removed, not increased by the additional oppression of “cap and trade.”

Resources Available, Suppressed

There is no resource problem. The United States is awash in essentially unlimited quantities of all the fuels—uranium, coal, oil, natural gas, and methane clathrates—these industries require. The Obama administration and its congressional retainers insist, however, that these fuels not be used.

The people of the United States have a clear choice: Either continue to destroy the capital equivalent of the Hoover Dam every day, or get rid of the politicians in Washington who have caused and continue to cause this destruction. To force our engineers and industrialists to make useful energy without hydrocarbons and uranium is the modern equivalent of asking ancient Egyptian slaves to make bricks without straw.

If we continue to allow this, we will have fewer bricks and inferior bricks—less energy and less prosperity.

“Yes,” Mr. Obama, we know “you can.” Tear down the unconscionable and oppressive wall of taxation, regulation, and litigation that impedes the flow of American technology. Set our energy industries free.

Dr. Arthur Robinson is president and research professor of the Oregon Institute of Science and Medicine. An earlier version of this article appeared at WorldNetDaily. Reprinted with permission.