Port: Shortages were an inevitable outcome of politicized energy policy

MINOT, N.D. — Rarely do things end well when the politicians take it upon themselves to dictate a market's direction.

Once upon a time, about a generation ago, the political class decided that homeownership was a thing worth promoting. They observed that homeowners tended to be prosperous taxpayers and supposed that if they gamed the system so that more people owned homes, we'd have more prosperous people.

The logic was specious. Homeownership is a product of prosperity, not a cause. Still, the argument was a plausible enough veneer for policies that promoted a boom in the housing market and made many people rich.

Banks gave loans to people who couldn't get them before. Homes were built and purchased. For a while, it seemed to be working fine, until suddenly it wasn't. What we got was the subprime mortgage market, a teetering house of cards built on top of loans to people who had no business getting them. When it collapsed, it hurt us all.

Lesson learned?

Not so much.

The wizards of smart in the political class still think they can direct markets with impunity. It's happening in the energy industry, and I'm afraid, as we see headlines about energy shortages and rolling blackouts, the bill is coming due.

For decades, politicians have promoted "green" energy initiatives that focused on punishing energy sources like coal even as sources like wind enjoyed massive subsidies and even mandates for its use. Not surprisingly, this has resulted in closed coal-fired power plants and a booming wind industry.

But when a boom is built on demand driven by subsidies and mandates, is that a good thing?

Many, including this humble columnist, have warned that replacing reliable baseload coal-fired power with intermittent wind energy, or even dependence on the volatile natural gas markets, is folly. The mouthpieces for the wind lobby have countered by suggesting coal's demise is just a product of the markets at work and that concerns about grid reliability are nonsense.

“We don’t have the concern because we know we have both resource adequacy and reliability,” Carlee McLeod, president of Utility Shareholders of North Dakota, told reporters just last week . “We feel these fears at this moment are unfounded.”

Unfounded?

All morning I've been getting calls and emails from readers who are losing powers due to rolling blackouts ordered by the Southwest Power Pool, one of the two power grid operators which serve North Dakota.

This is the first time in its history that SPP has had to order blackouts.

The same wind promoters who have told us that grid reliability is not a thing to worry about have also told us that they no longer need the massive subsidies provided by the production tax credit. And yet every year, that subsidy is quietly renewed by Congress.

It's almost as if the wind industry isn't being truthful with us.

Before the collapse of the subprime mortgage market, the politicians and the financial experts told us there was nothing to worry about. Things were fine.

Until they weren't.

The people who supply Americans with energy are in the thrall of politics. They have been making their decisions based less on real-world considerations about what works than on the perverse incentives created by politics. They've been collecting massive subsidies while working to avoid the acrimony of environmental activists. Their duty to provide us with reliable and affordable energy has taken a back seat.

Let's hope this moment in time serves as a wake-up call.

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Rob Port, founder of SayAnythingBlog.com, is a Forum Communications commentator. Reach him on Twitter at @robport or via email at rport@forumcomm.com .