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WILLIAM TUCKER: Federal Lands, Renewable Energy and the Two Economies

By William Tucker

Two weeks ago, Dan Henninger of The Wall Street Journal wrote about how under the Obama Administration the country is really splitting into two economies, one public, one private.  More and more the government is trying to replace private markets in the decision of what gets built, when and how.

Little did he know.  As if on cue, the Administration this week announced it will be starting a full-scale initiative to build wind and solar projects on federal Western lands, with contributions coming from both the Bureau of Land Management and the Department of Defense.  The Pentagon’s contribution will be 16 million acres.  In case you’re keeping score, that 25,000 square miles or the size of West Virginia.  Who knew they owned that much?  Yet the truth is, if you’re going to build wind and solar you’re going to that much space because both are hugely dilute and can’t be scaled up except by occupying more land.

Although landowning and private property have been foundation of American democracy since the time of the Revolution, in fact there huge amounts of land still belong to the government – much more even than in a place such as the United Kingdom, where large tracts are still owned by “The Crown.”  Things began to change in this country around the beginning of the 20th century.  Before that, the Homestead Act, adopted under Abraham Lincoln in the midst of the Civil War, had put land west of the Mississippi in the hands of small farmers and property owners.  Settlers were promised 160 acres if they lived on the land for five years and made improvements.  As riverbeds lands were exhausted, the allotment was increased to 320 acres in 1909 to encourage dry land farming.  With this acreage went the mineral rights.  

After 1900, however, Theodore Roosevelt and Gifford Pinchot became concerned that people were exploiting forest and mineral resources and decided to halt the giveaway.  The National Forests were created in 1905 and after 1916 homesteaders were no longer given the mineral rights to their land.  All the unclaimed lands were retained by the General Land Office, which merged with the Federal Grazing Service in 1946 to become the Bureau of Land Management.  When the Homestead Act was finally terminated in 1934, it had granted 420,000 square miles or1/10th of the United States in to private hands.  But the amount of land in the National Forest Service was 360,000 square miles, and the BLM retained another 400,000 square miles, meaning more than half the land west of the Mississippi is still owned by the federal government.  Moreover, the BLM also retains the mineral rights to a remarkable 1.1 million square miles, about 30 percent of the entire U.S.  

This continued federal ownership has created considerable conflict.  In western logging areas, for instance, private ownership was originally granted to the railroads in a checkerboard pattern to prevent the accumulation of contiguous territories.  This pattern still exists and assures that any effort to develop forest or mineral resources must take on the federal government as a partner.  The Forest Service was fairly cooperative until environmental groups gained control in the 1970s.  Then and logging was slowed and eventually brought to a halt in Oregon and Washington by the spotted owl controversy.  Federal ownership of oil and gas rights has proceeded in a similar way, once proceeding at a rapid pace but slowing to a crawl or even stopping altogether as the influence of environmentalists rises and falls in the government.  As has often been noted, natural gas fracking never would have gotten off the ground in the U.S. except that most of the reserves are the eastern half of the country where private ownership predominates.  

Now the tables are turning.  Whereas most of the pressure from environmental groups has been toward preventing the development of Western lands, now these seemingly endless tracts are being regarded as a field of dreams for environmentalists to carry on their experiments with wind and solar energy.  Last week President Obama proudly announced seven major projects on Western lands.  The largest will be a 3,000-MW-capacity wind farm covering 350 square miles of Wyoming.  The others will include a wind farm in the Mojave Desert and solar complexes in California, Arizona and Nevada.  

All these projects will suffer the intermittency problems that plague wind and solar energy everywhere.  They will create surges and voltage drops that destabilize the grid.  (Some solar plants are now developing thermal storage that can carry them through a few hours of the night, but this reduces their overall capacity.)  These projects will require hundreds of miles of transmission lines to bring them to areas where electricity is consumed.  And the electricity they produce will be ridiculously expensive.  

Yet all will move ahead because federal-and-state-sponsored renewable programs are being pursued without any regard for the economic consequences.  The electricity they produce will be guaranteed a market at a price that makes them profitable, whatever it may be.  As David Crane, CEO of NRG Energy, told The New York Times about California-sponsored solar project his company is building:  "I have never seen anything that I have had to do in my 20 years in the power industry that involved less risk.  It is just filling the desert with panels.”

So as Daniel Henninger says, we are moving toward two separate energy economies. One will be based on market forces and economic efficiency.  The other will be driven by the ideological certainty that renewable energy is the wave of the future and should be pursued at any price.  There is little question as to which will make a greater contribution to the nation’s energy budget.