When you hear that energy prices are about to increase, your home electric bill should be the least of your concerns, though still a substantial one.
In a 2010 study on energy use in food production, the USDA painted an important picture of how much energy it takes for mixed salad greens to appear on a consumer’s kitchen table. Gas or diesel powered tractors and trucks are responsible for tilling the land, planting seeds, spreading fertilizer, pesticides, and herbicides, delivering crops to farm supply wholesalers, and taking local farmers to the wholesalers.
Electric powered irrigation equipment must be used throughout the growing season, and once harvested workers will pack crops into cardboard boxes manufactured at a paper mill and load them into yet another truck to be delivered to the grocery store. The grocery store must use electricity to refrigerate the product until the consumer arrives in their gas-powered vehicle ready to make their purchase and use their refrigerator.
All along the way energy is used. The plastic box your spring mix comes in was manufactured using fossil fuels as was the cardboard box created by the paper mill. The nitrogen based fertilizers were created using natural gas and electricity.
Because energy is in everything, regulating its consumption or how it is produced affects everything down the line. Oftentimes – most times – government regulations seeking to solve one problem causes an unintended problem elsewhere.
For example, when the United States set the renewable fuel standard in 2007 mandating increases in the mix of ethanol used in gasoline, prices for corn increased four fold in 2008. This did not happen in a vacuum. Prices for livestock feed rose, which in turn saw prices in beef, poultry, and pork rise along with by products like milk and eggs.
While the simultaneous and prolonged drought that occurred would have seen sharp price increases by itself, the U.S. fuel policy forced competition between food producers and fuel producers. This unnecessary competition caused calamitous results for developing nations that rely heavily on corn as a staple of their diet. The victim of the American desire for “renewable” energy, many of these third world countries were unable to afford or replace a necessary facet of their diet.
Dictating the fuel mix has proven foolish, yet the EPA, through the Clean Power Plan (CPP), does this on a much grander scale. Their Plan will force coal-powered electric generating plants to shut down and will mandate that Texas install over twice its current renewable generation in order to reduce CO2 emissions.
ERCOT’s recent study estimates that the costs of implementing the CPP alone will increase consumer’s electric bills by sixteen percent – an amount they arrived at before contemplating costs such as stranded assets costs, or early retired coal plants, or infrastructure costs of new renewable electric generation or transmission lines. To estimate those additional costs ERCOT used the EPA’s Regulatory Impact Analysis to come up with an estimated total of $31 billion.
That’s $31 billion on top of the 16 percent increase in utility rates that will certainly be passed on to Texas consumers. And that’s only counting the regions of the State served by ERCOT, which is 75 percent of the State and 85 percent of the total generation.
The cost of everything will increase when the cost of energy does. Your end utility bill, your salad, your taxes – because every governmental light switch turned on will now cost more, and you will be expected to cover it.
Do not be fooled, we are not struggling or paying for a better future, a better tomorrow, a better anything. The reduction in global temperature estimated by the EPA under the CPP is only 0.018ºC by 2100.
Whether or not you believe in anthropogenic global warming is entirely beside the point – because the Clean Power Plan isn’t about that.
Leigh Thompson is an attorney with the Center for the American Future and policy analyst with the Armstrong Center for Energy & the Environment at the Texas Public Policy Foundation.