A consistently intelligent voice on energy, Mark Mills writes a column for Forbes. Though he did write for AmSpec during the Gilder years, I actually met him at Cornell, and even had him debate an environmentalist professor. His column today has the classic Nostradamus quality that is so good, it will obviously be ignored by those hoping to just slap more regulations on our problems.
Forget oil. Electricity prices are going to start climbing:
Coal is cheap, but it has no friends. Anticoal activists brag that 59 coal-fired plants were canceled in 2007. Nearly 50 more in 29 states are being contested. Recall how the private equity buyers of Texas utility txu agreed last year to cancel eight power plants to defuse environmental opposition. It takes years to plan and at least six years to build a large power plant.
Also playing into this is the possibility of a carbon penalty. Whether taking the form of a visible tax or imposed through a cap-and-trade scheme, a $30-per-ton tax on carbon dioxide could propel a 60% to 150% rise in the cost of electricity, even without further price hikes in raw fuel, according to the Department of Energy.