Texas and California are currently facing energy crises, struggling to meet the increasing demand for power. These crises are not the result of natural disasters, but rather flawed energy policies that have left these states powerless.
Texas, known for its vast energy reserves, is now struggling to keep its air conditioners running. The state’s energy grid is unable to handle the peak demand, prompting authorities to urge residents to conserve energy. California, another state rich in oil reserves, is also facing similar challenges, with many resources remaining untapped due to restrictions.
The root cause of these energy crises can be traced back to flawed policies enacted over the past half-century. The concept of an Energy Policy, passed into law in 1954, provided tax subsidies to companies involved in natural resource extraction. However, the assumption that these resources would eventually deplete has proven to be false. Instead, politicians have used energy management as an opportunity to gain credit and portray themselves as problem solvers.
This approach of government intervention in energy allocation mirrors tactics used by the old Soviet Union. In the United States, the system of efficiently allocating resources and capital has been replaced by a legal and political framework. Energy allocation is now determined by laws rather than consumer demand. This creates a situation where changing laws is necessary to meet energy demands during times of crisis.
Previously, capitalism provided a reliable method for resource allocation. Entrepreneurs driven by profit would step in to meet energy shortfalls in a truly capitalist country. The role of the government should be to set and enforce standards related to environmental, safety, and air quality concerns. However, when governments subsidize certain energy sources at the expense of others, they cross the line and disrupt market functions.
Renewable energy sources, in particular, receive heavy subsidies that distort their true worth and contribution to the energy grid. Despite the unreliability of renewables, such as wind turbines that only generate electricity when the wind blows, substantial subsidies hinder an accurate assessment of their effectiveness and reliability.
The solution lies in eliminating all energy subsidies to provide a more accurate understanding of our energy system. This transition would be challenging, but it would ultimately bring energy demand and supply into balance, eliminating shortages. By freeing the market from governmental intervention, we can restore the price mechanism that is essential to the effectiveness of capitalism. Only then can we achieve a sustainable and reliable energy future.
Overall, to address the energy crises in Texas and California, it is crucial to release the free market from government intervention. Governments should not dictate which energy sources we use or subsidize one source over another. Eliminating subsidies will restore the price mechanism, enabling a comprehensive understanding of our energy system and paving the way for a sustainable future.
