Back when I was manufacturing novelties in 1979, the Second Oil Crisis prompted a Eureka moment. Like the Arab Oil Embargo of ’73-’74, it created long gas lines over night. In anticipation of a reprise, I concocted the Gas Line to give expression to people’s frustration.
This brainstorm was inspired by the tongue-in-cheekiness of the Pet Rock which was one of the top 10 toy crazes of all time. The Gas Line was an 18” length of nylon rope tied in a noose that came in a box designed like a gas pump. Like the Pet Rock, there was an instruction manual: “Burned up because some car just cut in front of you on the gas line? Stick one end of the Gas Line in his gas tank, light the other end and watch him burn up.” Thousands of Gas Lines were noosed up and ready to be hung from rearview mirrors across America when, as quickly as the ’79 gas lines appeared, they disappeared. I wasn’t the only one stuck with inventory; the U.S. government was obliged to shred five billion unused gas rationing coupons.
Between the two oil crises of the ‘70s, the price of oil jumped from $3/bbl to nearly $40/bbl, a level that would not be exceeded, adjusted for inflation, until 2008. Various energy remedies were engaged, from solar panels on the White House to Jimmy Carter’s cardigan sweater. The most sweeping systemic prescription was offered by an Oregon senator: “Set up a capability in government to budget according to flows of energy rather than money…. Energy is the currency around which we should be basing our economic forecasts, not money supply.”
This proposal was not unprecedented. In the depths of the Great Depression with oil going for 10¢/bbl, a group of industrial engineers proposed that currency be based on units of energy, like a joule, which is the amount of energy required to lift the weight of one Newton, i.e. a small apple, one meter. Commodities were to be priced according to the amount of horsepower or kilowatt hours of energy expended in producing them. Energy cards would be punched based upon the energy content of commodities purchased. Consumption would balance production and depressions and unemployment would be avoided. Or so the thinking went in the Era of Grand Designs.
The Federal Nonnuclear Energy Research and Development Act of 1974 called for an economy based on the “potential for net energy.” As market pricing insufficiently internalizes externalities such as pollution, net energy analysis factors for the thermodynamic potential sequestered in materials and the energy embodied in capital. Net energy analysis lays the groundwork for a balanced playing field by measuring, projecting and mitigating emissions from smokestacks, tailpipes and production.
Economists have not been so hot to trot with the energy theory of value. The gloomy scientists view net energy analysis on par with the labor theory of value, Carnot and Kelvin substituting for Marx and Engels. Most economists posit that the market price system is most suited to provide mechanisms and incentives for optimal deployment of variable inputs, including energy in its commoditized form.
Energizers would respond that while a dollar is worth more or less any given day, a unit of heat or work is the same in 1933, 1974 or 2011. Energy is present in all processes and minimizes the ‘apples to oranges’ conundrum by juicing and weighing variables of impacts, material, and capital. Energy equivalents for human activities such as major surgery would have to be gauged. While piezoelectric can harvest motion in surgery to recharge an i-Pad, that is hardly compensation for the surgeon.
Cap & trade (C&T), or cap and dividend, its populist variation, are trading regimens or schemes, as the Europeans call them. C&T is modeled on the successful mitigation of acid rain during the administration of Bush Senior. It is designed to be a market maker for the cost of carbon embodied to one degree or another in all generation and production. Detractors of C&T say, among things, that it would become another murky trough for the giant vampire squids of Wall Street. Thus, last year, C&T got knee-capped by the fossil fuel shills in Congress flying under the anti-tax flag.
The Regional Greenhouse Gas Initiative (RGGI) is a C&T program that joined ten Northeastern states. Beginning in 2008, carbon credits auctions have financed clean energy programs like Green Jobs/Green NY. Recently it has come under assault and been abandoned by New Jersey, other states to follow, perhaps. The harbinger of this fallout came last fall when Koch Bros-financed Americans for Prosperity bused Tea Baggers from Jersey to lower Manhattan to protest a periodic carbon credits auction. Given that carbon dioxide was fetching a measly $1.86 a ton, the Kochs clearly have no compunction about pulling the plug on life-support for energy efficiency.
How receptive would the Kochs and their fossil fueler cohorts be to the monetization of energy? Fellow Libertarians like Ron Paul have been urging for decades that we bring back the gold standard. But energy is far more fungible and, unlike gold, available in ample quantity to supplant trillions in paper currency.
To show support for Crown Joules, how about a hangman’s noose for your rearview mirror? I happen to have some ready to go.