Allan Sloan, in A Good Energy A Good Energy Strategy Doesn’t Fit in a Slogan (Washington Post, July 13, 2010), states “So now, you ask, since I don't believe in a magic solution, what should we do? It's easy, though not politically palatable. You put a heavy tax on electricity, gasoline and other energy sources whose use you want to discourage.”
While a coherent energy policy is critical for America, heavily taxing electricity would have a disastrous effect on US manufacturing.
Think for a moment of the manufacturing operations we’ve retained in the United States: industry verticals like plastic film, wire and cable, petroleum refining, glass, chemicals, steel and aluminum to name a few. When the cost to produce an energy-intensive product like chemicals rises because the cost of energy rises, corporations evaluate lower-cost locations for production. We all know pricing for energy is extraordinarily complicated, but a wholesale increase across the board will affect a large user of power like Alcoa or ADM much more than it will affect a household. It will affect a college campus or research hospital much more than a car dealership. A large Google data center must have consistent, redundant power to operate. A large pharmaceutical manufacturing facility also needs high quality, redundant power: an outage can trigger product destruction and the need for plant revalidation. Sloan’s prescriptive may have the unintended consequence of further driving US manufacturing offshore.
He ends the article by stating, “Of course, nothing like that is likely to happen. Because ‘Raise prices, support some energy research, but don't shove solutions such as compact fluorescent bulbs down consumers' throats’ doesn't make for a good bumper sticker or sound bite. It's not magical. It's just right.”
Well… it may not be right for US manufacturing.
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