Rich Tucker

The United States is awash in energy.

“U.S. production of crude oil, along with liquids separated from natural gas, surpassed all other countries this year with daily output exceeding 11 million barrels in the first quarter,” Bank of America reports. Our country became the biggest producer of natural gas four years ago. Only one thing may stand in our way: Experts.

Last year, Forbes contributor Juston Gerdes lauded a proposal by a legislator in California aimed at reducing greenhouse gas emissions. The proposal would create a board that is, itself, awash in experts. “The board would include representatives from the CEC, CARB, California Public Utilities Commission (CPUC), California Alternative Energy and Advanced Transportation Financing Authority, California Environmental Protection Agency, California Independent System Operator, and the Governor’s Office,” Gerdes writes.

What’s likely to swim up out of that alphabet soup of experts? Plans, of course. Guidelines, no doubt. Effective state control of energy production and distribution, most likely.

So consider how such control works out in the real world.

In his classic, “The Road to Serfdom,” Hayek wrote about the inefficiencies of government monopolies. “Private monopoly is scarcely ever complete and even more rarely of long duration or able to disregard potential competition,” he wrote in 1944. “But a state monopoly is always a state-protected monopoly -- protected against both potential competition and effective criticism.” And so it is.

In Puerto Rico, the territory’s government runs the electric utility. And it’s teetering on the cusp of bankruptcy. PREPA, as it’s known, generates two-thirds of its power from fuel oil -- perhaps the most expensive fuel stock for generating electricity. The company cost Puerto Rican taxpayers some $275 million last year, and “its high prices serve as a tax on most economic activity,” as The Economist explained recently.

Mexico, too, has almost always meddled in energy policy. Almost all the electricity there has been generated by the Federal Electricity Commission. A huge amount of that is generated by burning coal. And until very recently, there was no alternative.

Rich Tucker

Rich Tucker is a communications professional and a columnist for