Yesterday, I attended The Fourteenth Annual POWER Conference on Energy Policy and Research hosted by the Center for Study of Energy Markets (CSEM).

Suffice it to say that it was very high level.  Economists presented their findings including sophisticated regression analysis and lots of numbers, charts and graphs.  Wow, was it detailed and math heavy?

What was the takeaway?  There is much more to energy policy issues than is reported in the news, shown in oil and natural gas commercials or chanted in drill, baby, drill rallies.

Here is a video that shows every president from Nixon to Bush 43 talking about Energy Independence:

http://endependence.info/research/videos-c-12-v-65.html

Now, President Obama is making energy policy a major focus of his budget, intending to turn talk about energy independence into action.

When energy policy is being shaped by governments (local, state or federal) and public utility regulators, they need information about what works and what doesn’t work (or what might work and what might not work).  This is where the economists come in with their complex formulas and statistical analysis.

What question needs to be answered, what data is available, what data needs to be included in the study, what needs to be excluded, what time period is relevant, what was going on at the time that would skew the results, etc., etc., etc.  After they have that figured out, then they have to reduce it to a formula and use computers to run the data through the formula.  Here is a sample of the topics:

“Regulation, Allocation, and Leakage in Cap-and-Trade Markets for CO2“

“How Do Firms Exercise Market Power in Hydro Dominated Markets?“

“What Do Emissions Markets Deliver and to Whom? Evidence from Southern California’s NOx Trading Program“

Presentations were made by the economists and consultants and then “discussants” (other experts in the field) made suggestions for improvement or further study.  You should have been there.

Actually, we should be thankful that there are people working so hard on these and other energy issues.  Their work should lead to better decisions by policy makers, if they base their policies on science instead of knee jerk reactions and political expediency.  That is a big IF.

Start with the stipulation that the Cap and Trade policy being proposed for the President’s new budget is a politically expedient half-step.  The reality is that we need a carbon tax, but that won’t fly in Washington, so we’ll start with Cap and Trade.

Here is a video about how carbon dioxide is effecting the environment:

http://endependence.info/research/videos-c-13-v-82.html

Here is a video about a unique solution, nuclear explosivity:

http://endependence.info/research/videos-c-13-v-45.html

Now to the objections as voiced by the defenders of the status quo:

Cap and Trade is a burden on the economy, a hidden tax that will burden us all, blah, blah, blah.

I found out that when I sit in one place for hours blogging, my butt starts to hurt.  So every once in a while, I stand up, stretch, walk around, something to avoid the pain.

Is there some reasonable argument that a business will react differently?  If a company finds out that wasting energy is costing it more money, to the point where the cost becomes painful, won’t that company change its behavior?

Estimates are that we waste 30% of the energy we use in the U.S.  All experts agree that energy conservation is the cheapest form of energy policy reform, and the least painful way to achieve energy independence that ends dependence on polluting fuel.  But only some businesses stop wasting energy voluntarily.

A cap and trade policy would make wasting energy a real pain in the butt, and my bet is that almost every business will change its behavior to avoid the pain.