Energy Prosperity Is Prosperity
We don’t focus enough on how correlated kWhs are with GDP
To me, the correlation between energy use and wealth is obvious. In fact, it was someone pushing back on me that had me do some researching, otherwise I wouldn’t do any research. As you can see from ChatGPT’s assembled information in a scatter plot, there is clearly a relationship. No formal correlation number is needed. The cloud tells the story. I think Nassim Taleb would approve. Lower energy prices, hence increased use, give your country better odds at a higher standard of living for your people.
I don’t have any grand theories as to why this relationship is true. My hunch is a form of the Jevon’s Paradox. The cheaper energy is, the more of it we are bound to use doing something. If energy were free, we’d have unlimited fresh water, desalination is easy. If we think of each country as a house in the neighborhood, all with the same tools, same materials and same skill sets in the house, if one house gets free electricity and another pays an extreme amount for each kilowatt, which house do you think is going to produce more physical items in a competitive world market?
https://ourworldindata.org/grapher/energy-use-per-person-vs-gdp-per-capita
Clearly there is some correlation. Maybe it’s causation, but given how tight it is, you’d think people and politicians would be clamoring for cheaper energy all the time. But that’s not what I hear and see on political ads. That’s not what I read in forums and on Reddit. People want to talk about unions. They want to talk about “energy independence”. They hate wind farms. No, they hate solar. No, they hate natural gas. No, they hate coal. They want to talk about taxing the rich. They want to talk about lowering taxes on companies to make them more productive. They want to stop data centers from driving up prices! Perhaps I’m misguided, but what we should be talking about is “how do we produce as much energy as possible?”
I feel that a chief example of failure in this realm is the United Kingdom. Obviously Brexit was a vote to be poorer, but they’ve also failed at energy policy.
https://ourworldindata.org/profile/energy/united-kingdom
This failed policy helps explain the cost of living issues they are having, their global competitiveness at manufacturing and their constant turnover on Downing Street. I’m being a little simplistic here, but I bet if that graph turned up to 40,000 kWh per person next year, energy prices would fall and the PM might start lasting longer than a head of lettuce!
I’d love to see someone run for President of the US on the platform of pro wind farms, pro solar farms, pro battery storage, pro fossil fuels, no wars against oil producing countries. A full out plan to make energy as abundant as possible.