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Not terribly far from where these words are written one can find farms and fields tilled by the Amish, individuals who have largely avoided the advantages of modern living. No TVs, light bulbs or computers can be found in Amish households. They are, as the expression goes, "off the grid" -- a fate shared by many in the Northeast and Canada during the past few days.

There are certainly lessons to be learned from the blackout of '03. We're lucky this hasn't happened more often, it's obvious it could happen again and if we don't change our energy policies then the blacked-out house-of-the-future with all it's electronics and appliances will not offer much comfort or advantage when compared with homes from the 1880s.

The value of what we call real estate -- meaning houses, condos and such -- is that it represents better living then caves, tents, and lean-tos. Some of that value is in the form of shelter, but there is a huge difference between bare-bones housing and a place with a clothes washer, dryer, microwave, air conditioner, central heat and a home office. Those conveniences, those necessities, bind us to the power system. If the local power system is unreliable or fails, people will move elsewhere and property values will decline -- a matter of great importance to anyone who owns a home.

We have a growing need for energy at the right place, at the right price and with suitable environmental standards. If cost were not an object, we could convert coal into oil -- we have about half of the world's supply. We could obtain energy from Colorado shale -- during World War II the Japanese navy was fueled with oil from Manchurian shale. Canada could supply vast quantities of energy from oil sands. We have enormous volumes of methane in the form of pressurized brine under the Gulf of Mexico. And, amazingly, we are a major producer of oil in our own right.

But there are problems.

  • We consume more oil than we produce and the same may be increasingly true with electricity -- witness the California brownouts, as an example.
  • We have both a growing population and a growing need for electricity -- just look at the new power requirements for so-called telco hotels and server farms, massive buildings filled with computers that consume many times the electricity of a standard office building with the same square footage.
  • It takes years to build a generating station and transmission lines, too long in the face of rising populations and demand.
  • A single Mid-East oil well may produce as much as several thousand U.S. wells, thus the cost to extract oil in the Middle East is cheap -- pennies per barrel (there are 42 gallons in a barrel, but when refined an entire barrel of oil will yield less than 42 gallons of gasoline). It doesn't make financial sense to extract oil from sand, coal or shale as long as the price of crude is below the production cost of artificial oil.
  • There are environmental costs associated with energy extraction -- drilling waste, mining waste, and what the EPA calls produced waters.
  • Some forms of energy extraction raise major health issues -- think of underground coal miners.
  • Much of the work done by the environmental community should be applauded -- but some is plain wrong. The idea of getting cancer from high-voltage electric lines, as one example, has been repeatedly disproved ( Real Estate Forum Discussion Board Expert Advice Help Tips Post Questions Answers ).
  • Energy extraction, storage and production are major industrial efforts, things most people don't want down the street.
  • Our need for energy has reduced our political independence -- thus our national reluctance to criticize oil-producing nations that support and finance terrorists.

    We need more electrical generation, greater transmission capacity and increased energy efficiency. We can't create generating stations overnight, but we must accept the reality that either more power plants will be built and more transmission lines will be strung or our standard of living will decline.

    Delays in building electrical generating stations occur in large measure because of worries about the environment, fears regarding nuclear energy and the NIMBY factor -- not in my backyard.

    But now we have a new worry, one that is real, the possibility of limited power or even no power for days on end and the disruptions such events can produce.

    When important industries and labor unions fight, we stick their representatives in a room and tell them not to come out until they have a settlement. It's time for the energy industry, environmentalists, regulators and anti-nuke folks to sit down and work out the compromises needed to assure our future power needs. And if they can't figure it out, then the government will have to step in -- just as it would with a major labor dispute.

    It's possible, at least, that the Northeast blackout will not only stimulate increased energy awareness, but that it will also do something else: We now have a high level of unemployment and we also have millions of people who are underemployed. A national commitment to rebuild and expand the power system could employ enormous numbers of people nationwide, something which would be good for the economy, our political independence and those of us who like things to work with the flip of a switch.

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