Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, February 10, 1991 TAG: 9102110256
SECTION: EDITORIAL PAGE: B-3 EDITION: METRO
SOURCE: JULIAN L. SIMON
DATELINE: LENGTH: Medium
But the nuttiest are those who use transitory price increases as the hook on which to hang the call for a return to a "simpler life" in order to conserve the supply of energy.
A clutch of well-known biologists and "ecologists," and even a few economists, would have us waste our time and effort, slow the progress of civilization, and cripple the economy in order to mitigate a shortage of energy that they speculate will begin to finish us off perhaps 7 billion years from now. (That's right - 7,000,000,000 years.)
Yet over the decades and centuries, energy has become less rather than more scarce, as have other raw materials. And there is no reason to believe that that trend will ever reverse. Instead, it can go on forever. Governmentally mandated conservation of energy would only be a drag on human progress.
The historical facts entirely contradict the commonsensical Malthusian theory that the more we use, the less there is left to use, and hence the greater the scarcity. Through the centuries, the price of energy and its sources - coal, oil, and electricity - has been decreasing, not increasing, relative to the cost of labor and even relative to the price of consumer goods. And nuclear energy costs less than either coal or oil.
In economic terms, that means energy has been getting more available, rather than more scarce, for as long as we have been keeping records. The rate at which our stocks of resources increase or our increasingly efficient use of resources, or a combination of the two, has overmatched our exploitation of resources.
For perspective, reflect on the history of another resource that people have worried about since time immemorial: land. It has always seemed as obvious as the nose on your face that the supposedly fixed supply of agricultural land must eventually limit the growth of population and make food increasingly expensive. But lo and behold, The nuttiest are those who use transitory price increases as a hook on which to hang the call for a return to a `simpler life.' just the opposite has happened. Food has decreased in price, nutritional quality has improved, and hunger and famine have diminished worldwide, even as population has grown. The explanation lies in advances in our knowledge of how to produce food.
Just as people throughout history have said that the supply of land is limited and cannot be increased, many people have said that the energy-cost trend must turn around because the supply of energy is "finite." And they have gone on to assert that we should build a new system of economics that uses energy as a standard of value.
Energy differs from other resources in that it is "used up"; it cannot be recycled. Energy apparently trends toward exhaustion. It seems impossible to keep using energy and never run out of it, or even reach a point of increasing scarcity.
But as is the case with land and copper, there are other forces at play that make it possible for us to have increasing amounts of the goods and services we need and desire at the same time we boost the demands we make on the supplies of resources. The prices of energy and other natural resources decline as technology advances.
We are using less energy to produce more goods and services. Consider the steam engine, which at first operated at perhaps 1 percent efficiency. Today's engines operate at least 30 times more efficiently. That is, they use a thirtieth as much energy to do the same work.
When someone finds a way to increase the efficiency with which we use a resource by, say, 1 percent, the discovery not only increases the efficiency of our use of the resource this year, it also increases the effective stock of that resource - both known and as yet undiscovered. In just the past 16 years, the U.S. industrial sector has learned to produce 60 percent more output with the same amount of energy. That process could continue for a long time, perhaps indefinitely.
Also important are increases in the supply of energy, and oil in particular. We learn how to dig deeper and pump faster. And we invent new sources - oil from coal, shale, tar sands, and the like. We can "grow" oil substitutes as long as there is sunlight to raise plants. And nuclear fission will produce power at constant or declining costs practically forever.
Who knows: Nuclear fusion, or even another sun, may take care of our future needs. We've got 7 billion years to discover solutions to the theoretical problems that we have been able to cook up in only the past few centuries. It's reasonable to expect the supply of energy to continue increasing - forever.
by CNB