Backgrounder

A Cos⁠t⁠-Effec⁠t⁠⁠i⁠ve Br⁠i⁠dge ⁠t⁠o Flor⁠i⁠da’s Energy Fu⁠t⁠ure

By: The James Madison Institute / September 1, 2009

The James Madison Institute

Backgrounder

September 1, 2009

A decade from now, Florida's energy options may well differ from today's. Indeed, several trends are already evident. For instance, emerging technologies may make biomass a feasible and cost-effective source of energy. And for the first time since the 1970s, there has been progress in Florida toward eventually tapping the demonstrated potential of nuclear power –although the lengthy permitting process now in place will mean that 2019 is likely the earliest that a nuclear power plant proposed for Levy County can begin producing electricity.

Meanwhile, Florida and the nation as a whole face some immediate and crucial choices regarding energy. These choices can make or break our economy for decades to come. Affordable, abundant energy has long been a cornerstone of our economic well-being. Conventional sources such as oil and natural gas have dominated electricity production and transportation because they have been much less expensive to turn into usable power. If there is to be an efficient transition to other energy sources, then the economic consequences and the real-world feasibility of switching to those sources must be taken into account.

However, if government intervention in the marketplace prematurely restricts conventional sources in favor of sources that are neither cost-effective nor practical, the price differential could jeopardize Americans' economic well-being. Florida, in particular, could suffer if intrusive government policies result in a greater reliance on wind and solar power, the two alternative energy sources most commonly promoted by environmentalists. Contrary to common misperceptions, Florida has extremely limited wind-power potential and merely average solar-power potential. Therefore, Florida would pay a steeper price than most other states if government policies dictate an overreliance on wind and solar power.

Conversely, during the transition to practical alternative sources such as nuclear power, Florida could benefit from a relaxation of the limitations on the recovery of oil and natural gas from the Gulf. Indeed, a conservative estimate suggests that allowing exploration and production there could yield from $2.2 billion and $12 billion a year for the state government and would add more than $7 billion a year to Florida's economy, creating no fewer than 40,000 jobs.

Assertions that environmental concerns justify the substantial additional costs of wind and solar power fail to withstand objective analysis. All energy sources, including wind and solar, create certain negative environmental consequences. Meanwhile, technological innovations in the use of conventional energy sources have yielded substantial and ongoing improvements in air quality. Therefore, on balance, the negative environmental impacts of wind and solar power may very well outweigh the minimal air pollution from conventional power sources.

As we prepare to enter the second decade of the 21st century, those states that recognize and encourage the free-market principles that reward efficient energy production and distribution will be the states with the healthiest economies and the most rewarding standards of living.

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