We might worry that the American energy boom is creating too much prosperity, since we have bottlenecks in inadequate, ports, pipelines, rail and shipping. Of course, adapting to those things will create jobs based on REAL wealth.
We should also make the distinction between infrastructure that is real and that for show. The real infrastructure it built to satisfy needs created by tangible things like our American energy boom. We see that as wealth creating and good. So we are tempted to make bogus investments, that look like this but really don’t carry anything. Real investments raise the economic temperature. The bogus ones are more like lighting matches under a thermometer and hailing success. Glad to see real need which will create real wealth.
Speaking of the energy boom, the ingenuity of our fellow Americans is not limited to fossil fuels and our happy challenges will soon include how best to integrate abundant energy from alternative sources.
As solar and wind become cheaper and batteries improve, more people will be in the energy production business. However, the temptation to go it alone should be resisted. As the linked article says, “Distributed resources such as solar and storage can generate more value and have better economics for customers and society both if they are connected to the grid.” I think of it like the Internet. You CAN have a stand alone computer, but does anybody really want one?
This blog post explores why cost parity doesn’t necessarily equate to widespread customer defection, why defection would create a suboptimal electricity system, and why even the specter of customer defection is relevant.