Discovery Institute
disco-tech | Discovery Institute's Technology Blog: Energy Archives

February 20, 2007
Friedman's reversal (continued)

Tom Friedman continues his reversal on oil prices. Last week he said we need lower oil prices to combat Iran's growing power. Now he says Russia would be better off with oil at $15 a barrel. But his new hope for lower oil prices contradicts his old hope for high oil prices in America -- a minimum of $40 to $50 per barrel, he has long said. Higher if possible. He wants high prices here to reduce consumption, and low prices abroad to reduce profits for Putin and Ahmadinejad. How to reconcile these views? It's impossible. He simply doesn't believe in the price system.

So here's my prediction: You tell me the price of oil, and I'll tell you what kind of Russia you'll have. If the price stays at $60 a barrel, it's going to be more like Venezuela, because its leaders will have plenty of money to indulge their worst instincts, with too few checks and balances. If the price falls to $30, it will be more like Norway. If the price falls to $15 a barrel, it could become more like America -- with just enough money to provide a social safety net for its older generation, but with too little money to avoid developing the leaders and institutions to nurture the brainpower of its younger generation.

Friedman is right that natural resource wealth can divert a nation's attention from more fruitful economic pursuits like entrepreneurship and technology. But intervening massively in the world energy markets, with price caps and floors and subsidies and taxes, isn't good for entrepreneurship and technology anywhere. These high-end pursuits need energy just like any other. Friedman's schizophrenic policies would throw energy -- and the world economy -- into disarray, thus setting back all the clean, green, technology-based eco-advances he celebrates.

-Bret Swanson

February 6, 2007
Friedman echoes Forbes

We noted a few weeks ago that New York Times columnist Tom Friedman had retreated from his previous moralism on the topic of alternative energy to embrace coal as a key future source of U.S. electricity. After years of AlGore-ithmic pie-in-the-sky pronouncements, it seems, reality knocked him over the head.

Now Friedman is back, echoing Steve Forbes and me. This time over the price of oil. In August I argued in The Wall Street Journal that high oil prices, caused mostly by an inflationary monetary policy, were fueling rogue regimes in Tehran and Caracas. Then in October Forbes was even more explicit: in ignoring the effects of monetary policy on the price of petroleum products, the U.S. was letting a "powerful anti-terror weapon" go "unused." Forbes and I agreed that if the Fed got control of the dollar and inflation, oil prices would fall substantially, and emboldened petro-pols like Ahmadinejad and Chavez would be put on the defensive.

Now comes Tom Friedman, arguing that cutting the price of oil is our most effective tactic against Tehran.

In short, the best tool we have for curbing Iran's influence is not containment or engagement, but getting the price of oil down....

This is welcome news because for years Friedman has been calling not for cheaper oil but just the opposite -- an oil price floor of $40 or $50 per barrel -- so that political energy schemes like ethanol and wind have a fighting chance against far more economical fossil and nucelar fuels.

Friedman doesn't get the centrality of monetary policy in all of this, but on both scores -- coal and the price of oil -- Friedman is now on the right track. It just shows that hard-headed analysis and economic reality -- not lofty uneconomic utopianism -- are the keys to our energy future, and our national security.

-Bret Swanson

January 10, 2007
Tom Friedman Gets Real

Tom Friedman of the New York Times has been on a moral crusade these past few years. An environmental crusade. A "geo-green" crusade to persuade you that you are destroying the planet with your cars and your electronic gadgets, which, respectively, consume oil and coal. These modern necessities emit carbon dioxide, as you do when you exhale. We are scorching, frying, boiling, cooking, broasting, and broiling the earth, he has told us, over and over. It is a moral imperative to conserve energy and to move quickly to alternative sources. Only alternative energy is acceptable -- indeed, ethical. Anything less is immoral and even unpatriotic because the environment is now the key geopolitical issue.

But today all of Friedman's moral posturing comes crashing down to meet reality. Coal is the answer, Friedman says. This "green lump" is now his favorite "'green' energy source." To meet our constantly rising electricity consumption, we'll need coal to do it. And we can use clean coal technologies -- from smokestack scrubbers to CO2 sequestration -- to reduce emissions. Welcome to the club, Mr. Friedman.

Everyone who really knows anything about energy science and economics has been saying this for years. Of course, our preferred source of future electricity is nuclear power -- lots and lots of it. It's the cleanest and cheapest of all. There are some 15 new U.S. nuclear plants at various stages of development and approval. But it will take years to build these new plants, and even then the currently planned nukes won't be able to keep up with our electricity needs, especially as many of them will only be replacing old nukes that will be going out of service. So inevitably for the next few years and even decade or two, we will need lots of new coal plants. We've got some 500 billion tons of coal right in the U.S. (Illinois and Montana might both have more coal than Saudi Arabia has oil). And we've got the technologies to make coal more efficient and clean.

Mr. Friedman still reverts to his old uneconomic ways when he endorses a dangerous $40-per-barrel price floor for oil and other government intrusions. But given his endless villifications of fossil fuels and alternative hypes de jour, at least he has admitted that coal is crucial in the short to medium-term. The moralist is getting real.

-Bret Swanson

Dotted Divider Line

Contact Us
Discovery Institute Logo

Click here for additional contact information