California's Power Crisis: A Warning to All

California's continuing power crisis has been widely blamed on a failed deregulation process -- along with a regional water shortage (reducing the flow to hydroelectric generators) and an unusually high number of plants undergoing repairs.

These factors do indeed bear considerable responsibility for the crisis. But there is another, deeper cause at work -- an insatiable demand for energy that no combination of technology and regulation can meet.

Spurred by a strong economy and the spectacular expansion of the Internet, electricity consumption in the United States has been growing at a heady pace -- up nearly one-fourth between 1990 and 2000, according to the Department of Energy (DoE). The added amount -- some 660 billion kilowatt hours -- is equivalent to the combined current consumption of Canada and Mexico. California, with its large cities, suburbs, and computer industries, has accounted for a significant share of this increase.

Nationwide demand for electricity will likely continue to grow in the years ahead. Between now and 2020, the DoE predicts, U.S. consumption will grow by another 1,000 billion kilowatt hours -- the total current consumption of China. Of course, other industrialized and industrializing nations will also be expanding their electricity consumption over the next two decades -- in some cases, at rates much greater than those in the United States.

What is more, the growing demand for electricity is only one facet of the worldwide thirst for energy. All over the globe, people are buying new cars and appliances, driving greater distances, and using computers for an ever-wider range of functions. As a result, global consumption of all types of energy -- oil, natural gas, coal, hydropower, and nuclear power -- will grow by 50 percent over the next twenty years. This will require an unprecedented increase in production of primary energy supplies. Oil production, for example, will have to rise from 77 to 110 million barrels per day, while natural gas production will have to almost double.

Even with massive investments in new oil wells, gas fields, coal mines, dams, nuclear reactors, refineries, pipelines, power plants, and electrical grids, it is not clear that we can develop the necessary infrastructure. As California demonstrates, a wide range of political, economic, and environmental roadblocks stand in the way of rapid infrastructure growth. A new regulatory environment could eliminate some of these roadblocks, but not all of them.

In short, attaining a 50-percent increase in worldwide energy production over the next 20 years is probably beyond human capacity.

President Bush seeks to overcome this dilemma by digging for oil in national wilderness areas and by increasing domestic coal production. No doubt we will also hear more about the benefits of nuclear power generation, despite the fact that no solution has yet been found to the problem of storing highly radioactive wastes.

But all such measures will not satisfy the nation's ever-growing demand. In this sense, the blackouts and shortages now being experienced in California provide a foretaste of the years to come.

Ultimately, reforming the regulatory system and building new power plants will not solve the energy crisis. Sooner or later we will be forced to adopt a different strategy altogether. Only by slowing the growth in demand can we hope to find a lasting solution to the problem.

President Bush should be speaking about energy conservation and the development of super-efficient technologies, tax savings and other economic incentives to households and companies that significantly reduce energy use -- and higher rates for those that fail to do so. Applied judiciously, measures of this sort can lower demand to sustainable levels.

For now, California's leaders must concentrate on meeting the state's basic requirements. Once the immediate crisis has been overcome, however, the priority should be switched to demand reduction and the development of energy-saving technologies. By suffering now, California can spare us all from an even greater crisis in the future if it elects to lead the way in forging a new, sustainable energy strategy.


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