First principle: preserve options

First principles are guiding ideas that prove valuable and relevant, no matter which future actions are taken. An example of a first principle: preserve options. That means having the option of taking action, but not exercising that option until it clear that it should be used. It's a nuanced version of "keep your options open" and it calls for having restraint. We use first principles in business all the time.

I hope Republican leaders who want to run government like a business will consider these principles as they plan North Carolina's future, especially when it comes to fracking, off-shore drilling, and alternative energy. There's a lot at stake.

  • The world's energy markets show no sign of stabilizing any time soon. Between slowing of China's economy, over-production, and the impact of hybrids and electric cars, investments in new production are more likely to spawn economic woes than social benefits. Energy states like Texas and North Dakota are watching their fortunes collapse into deficits and unemployment. Simply put, the future of oil is far from certain.
  • Governments that have invested over the long haul in solar and wind are accelerating toward renewables as their main sources of power.
    In the first quarter of 2014, renewable energy sources met a record 27 percent of the country’s electricity demand, thanks to additional installations and favorable weather. “Renewable generators produced 40.2 billion kilowatt-hours of electricity, up from 35.7 billion kilowatt-hours in the same period last year,” Bloomberg reported. Much of the country’s renewable energy growth has occurred in the past decade and, as a point of comparison, Germany’s 27 percent is double the approximately 13 percent of U.S. electricity supply powered by renewables as of November 2013. Observers say the records will keep coming as Germany continues its Energiewende, or energy transformation, which aims to power the country almost entirely on renewable sources by 2050.
  • The groundwater risks of fracking and the tourism risks of off-shore drilling are well known and potentially catastrophic. While a few thousand investors might gain economic benefits, more than 10 million citizens face risks and liabilities.

North Carolina has the option of exploiting oil and gas reserves in the year ahead. But rather than exercise those options, we should put them on hold until some future date where the options are either more valuable or more necessary.

I realize I'm beating my head against the wall, of course. There's no evidence that thoughtful deliberation has any role in today's policy-making agenda.



Buggy whips and solar cells.

It's interesting that we seem to think of corporations as leading the way in product development, but there seems to come a point in time when they stop leading and start holding back. Any change becomes a challenge, and challenges cost money. They'd rather maintain the status quo than adapt.

So instead of spending funds to adapt to change, they spend funds to influence legislators to prevent change from happening. That seems short sighted.

I have a vague memory from living outside Washington DC in the early 1960s of complaints about government subsidies for the buggy whip industry. The advent of the automobile threatened this vital part of our economy and the highly skilled industry that filled this need, so they had been receiving subsidies. If only I could also remember the outcome….