Smart Grids And Fracking: How Sweet To Do Nothing

05-Aug-2015 Trying to track down the origin of the phrase “Don’t just do something, stand there!” is amusing, since it is one of those quips that didn’t seem important enough to make the Lives of Plutarch, but good enough to become a standard of wit. Of course, it could be argued that the true origin was in the doctor’s adage, “First, do no harm,” which is at least a few centuries old. (Yes, something that the Simpons didn’t say first.)

My take on this has always been that America is better off with energy policy than with Energy Policy. Probably the best energy legislation passed was George H. W. Bush’s Energy Policy Act of 1992, which attempted no massive revision of our energy system, but included a number of technical fixes and minor but logical policies. It was so unexciting that most Americans were completely unaware of that.

Rather like the curse of negative results in research, there is a huge bias against doing nothing as a policy. For many, this is the same as not having a policy, but this is erroneous. By choosing to eschew petroleum market interventions, Ronald Reagan did something important, just not Jimmy Carter’s Something Important. Carter, it will be recalled, attempted to micromanage oil and gas markets by estimating appropriate prices that would maximize consumer welfare (economist speak for voter happiness) while providing incentives for the industry to invest enough to meet demand. Turned out markets were better at estimating “correct” prices than government (or academic) economists. Who knew? (by Michael Lynch, Forbes)