A CONSERVATIVE'S CASE FOR NEW ENERGY

The amazing thing about New Energy is its utterly post-partisan nature.

The Republicrats and Demmicans are strangling each other over the irrelevant issue of pointless drilling for a useless amount of oil that the public foolishly believes will make a difference in gas pump prices while the nation goes on consuming an absurdly excessive proportion of the world’s dwindling reserves.

What one conservative small business advocate wants to know is how his fellow conservatives came out on the side of Big Energy?

Byron Kennard, Executive Director, Center for Small Business & the Environment: “Large-scale technologies are, by definition, centralized. What's more, their social and economic effects are centralizing. Deploying more large-scale technologies means we will become even more dependent on remote energy sources. Why do conservatives, who are philosophically committed to decentralized, small-scale approaches, opt for just the opposite when it comes to energy technology?”

New Energy promises to move the benefits of energy production out of corporate hands and into the community but New Energy no longer comes from anti-growth tree-huggers. It comes from small business entrepreneurs just as likely to be Republicans as Democrats.

Big Energy is in its essence anti-entrepreneur. It was garage-tinkerers and wildcatters who built the U.S. auto industry, the U.S. oil and gas industry, the U.S. high-tech industry and are building the budding New Energy revolution.

Byron Kennard: “Entrepreneurial small firms actually produce five times as many patents per dollar as large companies and 20 times as many as universities…”

The rationale for conservatives’ rejection of New Energy in favor of an alliance with Big Energy seems to be a 2-step process. First, there is Big Energy’s inability to successfully cope with New Energy.

Byron Kennard: “Big businesses are exceptionally fond of the status quo, and not just because of the manifold subsidies they enjoy…[They] don't know how to get their hands on all these emerging small-scale technologies. These innovations are so numerous, so varied, and evolving so rapidly that no one can stay on top of them…[The] quickening pace of innovation puts big systems more and more at a disadvantage. No matter how quickly and how often big systems retool, something better comes along even before they finish…”

This leads to the way Big Energy defensively describes New Energy: “Since big businesses don't yet know how to control [or make money on] small-scale technologies...[they] pat them on the head, comment on how cute they are, and observe that in 20 or 30 years, when they grow up, such technologies might indeed be an option…”

By putting up barriers to conservative icon Joseph Schumpeter’s creative destruction, Big Energy obstructs New Energy at the cost of the essence of conservative values and at the cost of the economy itself.

Byron Kennard: “Creative destruction occurs when radical innovators devise new technologies that force large, established companies to adapt or die. Schumpeter argued that creative destruction periodically renews the economy…”

New Energy is creative destruction at work right now. It is at work in energy and in the economy and, despite conservatives’ disdain, everything about conservative values argues in its favor.

Byron Kennard: “…large, established companies don't like to be forced to adapt or die, especially when they are making money peddling the same old stuff. So they resist creative destruction…Republican politicians shower praise on small business but favor big business' old technologies when it comes to government subsidies and incentives? "Drill more, drill now?" Destructive, yes, but not creative.”

Seems like anybody interested in finance of any political stripe has to be interested in this trend. (click to enlarge)

The Wrong Energy Agenda; Conservatives should rethink their solution to our energy problems. Instead of more drilling, it's time for small-scale enterprises
Byron Kennard, August 29, 2008 (Business Week)

WHO
Byron Kennard, Republican for Environmental Protection/Executive Director, Center for Small Business & the Environment; Joseph Schumpeter, iconic conservative economist, Harvard University;

WHAT
A small business advocate argues that New Energy fits with conservative values because it is small-scale, decentralized, distributed generation.

A conservative's light reading? (click to enlarge)

WHEN
- The small-scale technological solutions immediately available: conservation and efficiency.
- 2006 to 2007: Capital investments in wind energy, solar energy, and biofuels grew 43%.
- 2006 to 2007: 40% revenue growth for solar photovoltaics, wind, biofuels, and fuel cells ($55 billion to $77.3 billion)

WHERE
- Distributed generation is energy generated from small-scale sources (solar, wind, fuel cells) and used on-site or nearby.
- Hundreds of small-scale, New Energy technologies are flooding the market.

WHY
- Conservation and efficiency make economic sense because they target Americans’ enormous and needless energy-wasting habits they could pay off big and fast.
- Conservation and efficiency = the conservative old-time virtues of thrift and prudence = tons of savings to consumers and businesses = conservative values.
- Big Energy is in its essence anti-entrepreneur because it cannot compete or adapt to the speed of entrepreneurial innovation.
- Schumpeter described creative destruction as a natural process that renews the economic system just as fires renew the forest.
- New Energy is the fastest growing form of electricity generation in the U.S. and around the world.

Listen to Schumpeter. Renew this economy. (click to enlarge

QUOTES
Byron Kennard, Executive Director, Center for Small Business & the Environment: “In response to the nation's energy problems, Republican politicians are calling for extensive and rapid deployment of large-scale technological solutions: drilling in the Arctic National Wildlife Refuge; offshore oil development; construction of scores of new coal-fired and nuclear power plants; and development of clean coal technologies (coal-burning power stations equipped with carbon capture and sequestration gizmos)...To meet the rhetorical standards of an American Presidential campaign, this large-scale technology agenda has been distilled into a single mantra: "Drill more, drill now." (Does this sound to anyone else like the business plan for a dentist?)”