Monday, March 23, 2009

--The First Domino

The playing field was radically altered today--you just don't know it yet.

The Environmental Protection Agency has announced today that it will officially acknowledge the harmful effects of such greenhouse gases as carbon dioxide and methane. This will open the door for cap-and-trade and other increased forms of fossil fuel regulation.

Those bits of paper that come with your power bill every month? Start reading them. You'll find more inserts describing switchgrass and wind power. Instead of offering free electric water heaters, they'll soon be explaining why your power rate will be shooting up dramatically. Why will this happen?

For all our talk about solar power, wind power, nuclear power, hydroelectric power and other such renewable resources, fully half of the electricity generated in the US comes from coal. Alabama has long been below the national average in electric rates, but image how that cost would change if the EPA levied fines on coal-burning plants?

This blog does not seek to be political; both "liberal" and "conservative" sources are cited. The blog will not take a position on whether the EPA SHOULD impose such regulations. Rather, the blog assumes that the political and social climate of the coming years will ensure that such regulations ARE imposed. Based purely on that assumption, this blog endeavors to encourage the construction of homes and buildings that can cope with the increased fuel costs generated by these regulations.

Let's be clear: political wrangling will take place. One party will try to halt the imposition of these regulations, arguing that the increased costs of electricity will harm business interests and therefore cause the economy to stall. This argumentation won't triumph; the US suffered such image problems during the previous Presidential administration that both politicians and citizens are courting international favor by making the US a global leader in energy policy. Regulation is coming. Increased energy prices will follow.

(This is an aside, particularly for those concerned with urban sprawl. The current status of the Superfund legislation dictates that the present owner of an industrial site is responsible for any environmental cleanup required by that site. This means that if a substance used by an industry is later declared to be harmful, and if that site is now owned by a new business, the new business is responsible for cleanup on the site. Ever wondered why dry cleaners close up and leave abandoned store-fronts all around town? Because no one wants to buy a site that may later require expensive cleanup operations. Now, consider the invested infrastructure in present industrial sites. If the price of utilities increases such that the invested infrastructure is no longer cheaper to maintain than new infrastructure would be to build, then new factories will be favored by industry. But the present state of Superfund legislation ensures businesses will prefer to buy and degrade present virgin land rather than update old sites. This fact must be considered before the EPA creates sweeping regulations.)

How are you and your business planning for the coming increase in energy costs?

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