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Private Innovation Versus Government Centralization, Part 2

For real technological progress, government can’t dictate it. Only private initiative, coupled with secure property rights, the rule of law and a free market, will deliver innovation that matters, commercialization that succeeds and the freedom to benefit from the fruits of one’s labor.

The area of energy illustrates these divergent models of private sector-led versus government-controlled progress. In the late 19th century, Thomas Edison worked to commercialize direct current electricity. DC uses lower voltage and is safer. But DC is more expensive and limited to very short distances from a central power generator, making it less attractive.

DC went up against alternating current and AC’s proponents Nikola Tesla and George Westinghouse. AC operates on much higher wattage and can be distributed great distances more economically. Eventually, the market chose AC for electric energy, which supplanted gas lighting due to being cleaner.

The U.S. government didn’t select the commercial winner and loser; market competition did, on private investors’ dimes. The private investment that fueled R&D and commercialization of DC and AC was made because of secure, reliable, enforceable patents.

Today, shale drilling technology fuels the U.S. oil and gas boom. Before the pandemic, it made America a net energy exporter. “Black gold” makes economic sense because the United States enjoys an abundance of petroleum and can extract it cheaply and safely.

Unfortunately, command-and-control is raising its ugly head. California, which resembles a zoo run by poisonous snakes and drunken hyenas, is outlawing the sale of gasoline-motored automobiles by 2035. This Left Coast state can’t even ensure basic electric service. The Golden State has become the Blackout State, its citizens increasingly living like people in a Third World dictatorship.

Nationally, wild-eyed zealots aim to abandon our oil and gas industry for a highly aspirational “green” revolution. Unlike the innovation-driven, private-sector-led electricity revolution of Edison vs. Westinghouse, Green Raw Deal dogma relies on government force and subsidies. This in spite of the fact that government stinks at picking winners and losers.

For instance, the U.S. House passed H.R. 2, a command-and-control, government-central-planning agenda in lieu of a highway bill. This legislation attempts to speed the displacement of gasoline and diesel automotive engines with electric vehicles and alternative fuels. It overlooks the abundance of oil and gas here, their significant contribution to the U.S. economy and jobs, and their strategic benefits against rivals such as Russia and Iran.

Abandoning our oil-and-gas industry on a pipe dream of wholesale automotive shifts is like walking a tightrope across the Grand Canyon blindfolded and without a safety net. It will weaken our economy and our competitiveness against an aggressive China. There’s also the extreme vulnerability to our national security such foolish government fiat would cause. We’d quit exploiting our abundant natural resources, forego the competitive advantage and rapidly switch to a technology whose batteries would rely almost entirely on rogue states including China to supply the rare-earth minerals.

The bill, which died in the Senate, skirts competitive forces for encouraging innovation in new technologies and forms of energy. It throws gobs of taxpayer money at subsidizing electric and hydrogen fueling stations and infrastructure. Obviously, government precipitating big change that the market hasn’t adopted means inefficiency, inferior quality, huge expense and costs us waste, fraud and abuse. These risks are gravely concerning.

H.R. 2 substitutes politicians’ and bureaucrats’ fiat commands for the wisdom of consumers and the market. There’s little evidence of consumer demand or that they’ll adopt unproven, expensive vehicles. Auto makers are researching and developing electric and hydrogen vehicles, but American consumers love their gasoline-fueled cars, trucks and SUVs.

American drivers will likely reject having to buy an expensive vehicle that takes far longer to refuel than a quick pit stop at the gas station. Those who shell out big bucks for a Tesla car must wait 10-12 hours to recharge their batteries. If they can get access to a proprietary supercharger, they’re still stuck in “park” for an hour or so, versus a couple of minutes pumping gasoline. Teslas can only carry you between 300 and 400 miles on a battery charge, so it wastes a whole lot of people’s time waiting to get back on the road. That’s probably an unacceptably exorbitant cost in lost productivity and convenience.

Pickups and SUVs dominate the market. And gas and diesel vehicles cost significantly less than alternative vehicles. Some 124 million of the 134 million U.S. cars, pickups, trucks and SUVs run on gas or diesel. The 10 million alternative energy vehicles include the largest subset of 4 million electric-gasoline hybrids. These facts call into question the market viability of government-dictated energy sources and government-favored automotive technologies.

A transportation sector report acknowledges the necessarily long-range timeline to EVs' commercial feasibility. "Diesel’s dominance will continue for years to come, especially in longhaul, irregular-route trucking operations that require the range and flexibility currently provided by internal combustion engines."

To be sure, private-sector R&D into electric vehicle technology is underway and growing. Risking massive private investments into uncertain, novel technologies is the appropriate route through the many expensive dead ends, unknown hurdles and bankruptcies ahead.

H.R. 2, the Green Raw Deal and other “virtue-signaling” socialism borrow the failed, wasteful government approach that pales beside successful private-sector solutions, such as to electrification and to manned flight.

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