The Climate Needs Low Interest Rates

The Green New Deal — so-called — evidently cannot endure elevated interest rates.

Barron’s:

Solar and wind projects, and new electric-vehicle plants, demand heavy upfront investments… With the cost of corporate debt doubling in the past two years, from 3.2% to 6.4%… it’s a bad time to be taking out new loans to finance capital projects. “It was an industry whose economics rested on low rates,” says Bobby Tudor, CEO of Houston-based Artemis Energy Partners, which invests in traditional and clean-energy companies. “When you have your cost of debt effectively doubling, it sort of wipes out your equity return.”

C’est dommage… as the English say.

Why should sand castles endure when the tide transitions?

And why should industries endure when interest rates transition?

If their foundations are firm they will withstand the attending blows.

Here is a fact, an elemental and fundamental fact:

“Green” energy — wind power, solar power, electric vehicles and the rest — remains vastly inefficient.

It cannot endure absent heavy government subsidy. For example, the electric vehicle industry…

$17.33 a Gallon

Our scientific men inform us that the American taxpayer extravagantly subsidizes the electric vehicle industry. By how much?

They inform us these subsidies will near $400 billion in coming years.

What Ukraine would not give to receive that $400 billion! What Israel would not give to receive that $400 billion!

What Raytheon would not give to receive that $400 billion!

Alas it will be unavailable to them. It will go to the subsidization of electric vehicles.

Our sister publication, The Paradigm Pressroom, recently cited a study by the Edison Electric Institute.

From which:

EV advocates claim that the cost of electricity for EV owners is equal to $1.21 per gallon of gasoline, but the cost of charging equipment and charging losses, averaged out over 10 years and 120,000 miles, is $1.38 per gallon equivalent on top of that.

“So $2.59 per gallon? I could live with that!” said colleague Emily Clancy.

As could your editor — and very likely you.

Regular gasoline presently trades at $3.34 the gallon. Premium gasoline presently trades at $4.14 the gallon.

Seen in this aspect $2.59 is lovely.

The Green New Dealers, its idiots useful and unuseful, its buglers in the media and the business concerns receiving the subsidies will tell you it is in fact lovely.

Yet let us peer within this sweet, sweet bargain. Let us glance the fine print within the contract…

What does it read?

Adding the costs of the subsidies to the true cost of fueling an EV would equate to an EV owner paying $17.33 per gallon of gasoline.

$17.33 the gallon! How do you like it?

Yet you cannot see it because it does not strike your eye at the charging station.

It requires a more sensitive and penetrating ophthalmological apparatus to detect it.

It requires a finer vision. Most — alas — do not have it.

How to Buy a $102,698 Car for $54,000

More from the abovesaid Edison Electric Institute:

The average model year (MY) 2021 EV would cost $48,698 more to own over a 10-year period without $22 billion in government favors given to EV manufacturers and owners.

When we add up these hidden costs, we find that the lifetime cost of a typical EV is far greater than that of an [internal-combustion engine vehicle].

Without government subsidy the $54,000 electric vehicle would have been yours for $102,698.

The additional $48,698 is handsome — even across 10 years. It is nearly $5,000 per year.

How many electric vehicles that sold for $54,000 would have remained unsold at $102,698?

We hazard the answer is very high. Comes the retort:

“But we need these subsidies to increase EV usage. We have to transition away from fossil fuels in order to save the planet.”

Well then, in order to save the planet you must wreck the planet — if you believe fossil fuels wreck the planet.

That is because the charging stations required to fuel these vehicles themselves run largely on fossil fuels.

Want More Green Energy? Drill Baby, Drill!

Fossil fuels generate some 60% of United States electricity.

And if you wish to expand electrical vehicle use you must expand the number of charging stations to fuel them.

That of course means you must expand your consumption of fossil fuels.

If you do not you cannot keep these vehicles going.

Meantime our men inform us that:

If the standard American household transitioned to electric vehicles… the additional electrical consumption would equal 25 refrigerators.

The standard American household stables one refrigerator unit.

Now imagine an additional 24 such units ensconced within each home… devouring electricity… from midnight to midnight… seven days of the seven… 365 days of the 365.

Is this the picture of energy conservation? Or is it the picture of energy gluttony?

And if you cling to the belief in climate Armageddon… is this not its author?

A related question arises:

How could the existing electrical grid possibly take the load?

It cannot. It is not possible.

Yet we are told we must drive electric cars if we are to conserve the planet.

More Subsidies

What then is required?

The answer is an expanded energy grid — and $760 million in subsidies to install it.

Reports the International Energy Agency:

The U.S. Congressional Budget Office estimates that total support from the Inflation Reduction Act of 2022 (IRA) and the Infrastructure Investment and Jobs Act of 2021 will surpass $430 billion from 2022 through to 2031, of which the IRA provides $760 million in grants to siting authorities to facilitate the siting and permitting of transmission projects. The National Renewable Energy Laboratory estimates that the U.S. IRA could enable… a 16% increase in total installed capacity relative to the current level.

Of course a 16% increase in total installed capacity will remain vastly inadequate to needs — if each American is to wheel around in an electric vehicle.

Yet the businesses that receive the subsidies will roll in clover.

Their hands will extend — deeply — into taxpayer pockets.

What of wind and solar energies? They too receive vast subsidization.

They too cannot subsist without it.

Yet do they hold out hope against the “climate crisis”?

The subsidization may, in that instance, prove worthy.

Yet the answer — evidently — is no.

Wind and Solar Aren’t the Answer

Wind and solar hopes must go dashing against the rocks of fundamental physics…

Fundamental physics?

Mr. Mark Mills co-directs Northwestern University’s Institute on Manufacturing Science and Innovation.

He says, as we have noted before:

All sources of energy have limits that can’t be exceeded. The maximum rate at which the sun’s photons can be converted to electrons is about 33%. Our best solar technology is at 26% efficiency. For wind, the maximum capture is 60%. Our best machines are at 45%. So we’re pretty close to wind and solar limits. Despite big claims about big gains coming, there just aren’t any possible.

If this fellow is correct — our minions inform us he is — we must conclude we are being taken for a sleigh ride.

Wind and solar energy are vastly inadequate to energy needs. And they will likely remain inadequate to energy needs through the end of the chapter.

The physics, after all, is the physics.

And the physics places harsh constraints upon them.

Yet the businesses that traffic in them are extremely efficient absorbers of capital — capital that could be dedicated to productive use in other industries.

If it is crony capitalists you seek… here you have them.

They could not endure absent taxpayer subsidy.

Get Your Hands out of Our Pocket

All this we confront because of a claimed climate crisis that finds little excuse in the observable facts.

Our scientific men inform us there is no credible evidence indicating that carbon dioxide constitutes an environmental menace whatsoever.

It is simply not sufficiently formidable.

Our men further inform us that climate forecasting models are pure botchwork.

Each of these models has vastly exaggerated the degree of actual warming. Each of them.

That is, they stand discredited by the actual record.

Yet there are those who continue to cite them — among them those who gain most from the subsidies.

If the world prefers wind over oil, if the world prefers solar over coal… let the world have wind and solar over oil and coal.

It is all one to us.

And if the world wishes to roll around in electric vehicles, let it roll around in electric vehicles.

We simply ask to be excused.

Let the world do it on its own dime.

Leave ours out of it…