Both Oars In Time for a good shock to the System

Aug 12, 2011

Given the severity of our immediate economic situation, it may be difficult to look beyond tomorrow, let alone 2012. Even our ever optimistic, the sun-will-come-out-tomorrow President may be contemplating his future in shorter increments. However, there may be one bright, long-term play Mr. Obama can make that will lighten the national mood and swing support back his way: expedite the national electrical grid project.

When the economy needs more than just a jolt, the most effective type of government intervention is investing in infrastructure. Large public works projects stimulate the economy by creating broad based employment. Carefully chosen projects can also increase our nation’s competitiveness and productivity for when the world’s economy does swing back into action. Modernizing our nation’s electric grid fits the bill on both accounts.  

Moving more quickly on updating the grid will not only boost the immediate economy, it will make sure we remain an economic leader in the 21st century by allowing us to become a greener and lower cost industrial manufacturer. It will also decrease our energy footprint while increasing our quality of life by allowing consumers to access the cheapest and cleanest power available in the country at any moment of the day.     

Since 1960, per capita electrical consumption has tripled. While some of this increase is dubious in value, such as the power consumed to keep electric devices in stand-by mode and kids entertained on game boxes, much of it is a result of a cost-driven “power shift.” Due to the cost efficiency and practicality of electricity, 85% of the increase in power demand since 1980 has been provided through electricity. We are actually an electric dependent nation — even if oil gets more press.

The good news is that electricity is largely a domestic product. Less than 2% of US power generation comes from oil. By comparison, 10% comes from renewable resources. Since electrical power generation can draw on a wide variety of domestically available energy sources, anything that allows us to plug in more and pump less is in our national best interest. That fact alone should make us want to improve the grid and drive electric cars.  

Besides the immediate efficiencies in power transmission that will be gained, modernizing the grid will increase the intra-connectivity of the system. This will allow both commercial and private users to access the cheapest electricity available. Peak use, which is the most costly, generally moves across the nation with the sun. More and smarter connections in the grid will allow excess power generation from regions in “off-peak” mode to be transmitted to regions where demand is peaking, thereby cutting costs.    

Improving the connections within the grid will also allow for greater use of renewable energy. For example, wind power is generated most efficiently in the rural, unpopulated wind-swept regions of mid-America and just off our coastal shores. Being able to send this green, cheap power to areas most in need of electricity will maximize its economic and environmental impact. The same is true for solar and geothermal power.

Peter Huber, a Manhattan Institute fellow and widely published author on energy, provides an excellent explanation of why electricity is the future power play for America in his October 2008 article titled “The Million-Volt Answer to Oil.” It is a dense but rewarding read. He makes a clear argument for upgrading the grid and overlaying a coast to coast backbone grid to our existing system. He believes, “To get over $4 gas, we should let American capital, labor, and know-how get on with what they already do so well, and connect us to the 4-cent electricity.” I do, too.

Electricity has already proven to be cost effective and reliable. Because electricity is domestically produced, it is clearly more environmentally and politically manageable than petroleum based power. This makes electricity not only smart, but patriotic. Everyone, no matter on which side of the aisle they sit, should be able to get behind the President on the national grid project — now wouldn’t that kind of bipartisan support be electrifying right now.

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