Energy Markets

In their article on energy investment (Opinion, Dec.22) H. Richard Heede and Seth Zuckerman propose “a gradual and orderly weaning of the entire energy sector from the subsidies to which it has become accustomed.” They suggest that free-market forces would be a better form of regulation and guidance. The goal of the authors is that the U.S. economy “regain its health and its competitive posture in world trade.”

A good side to this idea is that it would encourage more economically efficient energy production. Say, for example, that the nuclear industry had remained entirely free of government support. It might be a smaller but healthier industry today.

Yet relying on market forces to guide our energy policy is a bad idea in that the issues are not purely economic. The free market does not voluntarily address issues such as pollution and non-renewability. Similarly, if we ran our foreign policy on purely economic grounds, concern for human rights might fall off the agenda.

My point is that the exploitation of natural resources is too important and complex an issue to be left to the economy. Is it really the wisest thing to do to use up all the world’s petroleum reserves in a matter of centuries? Can we help ourselves? Don’t look to supply and demand for answers.