Clean Power

Published on September 1st, 2012 | by Stephen Lacey

Why Do We Hold Renewable Energy to a Different Standard than Fossil Fuels & Nuclear Energy

September 1st, 2012 by Stephen Lacey

Now that renewables are receiving some of the same incentives that fossil fuels have enjoyed for nearly one hundred years, we’re suddenly being inundated with calls for a purely “free-market” approach to energy development from politicians on the right and companies concerned about the growth of clean energy.

Their arguments make for good sound bites. But if we take a look at the history of energy development in the U.S., it’s very clear that we’ve never had a truly “free” market. In fact, all of the technologies that dominate our energy system today were given special incentives by the government in order to get them to commercial scale.

According to a recent report from the venture capital firm DBL Investors, the U.S. coal, oil, gas, and nuclear industries have cumulatively taken in more than $630 billion in tax credits, land grants, R&D programs, and direct investments from the government. That far surpasses the roughly $50 billion in government renewable energy investments (wind, solar PV, solar thermal, geothermal, biofuels) through these same mechanisms over the decades, according to the report.

But when renewable energy is given similar incentives — helping double the penetration of non-hydro renewable electricity since 2008 — the energy free-marketeers come out of hiding and lament how we’re supposedly “picking winners and losers.”

The Republican party’s platform released this week is a perfect example:

Unlike the current Administration, we will not pick winners and losers in the energy market-place. Instead, we will let the free market and the public’s preferences determine the industry out-comes. In assessing the various sources of potential energy, Republicans advocate an all-of-the-above diversified approach, taking advantage of all our American God-given resources. That is the best way to advance North American energy independence.

Sounds pretty straightforward. However, the RNC’s platform is very bullish on maintaining use of coal, a resource that is declining in the U.S. because of … current market forces.

According to the Energy Information Administration, we’ve seen a 20 percent drop in coal generation over the last year. That decline has been “primarily driven by the increasing relative cost advantages of natural gas over coal for power generation in some regions,” wrote EIA.

But when market forces move in the wrong direction for coal supporters, that is apparently when it’s okay for government to intervene. According to the RNC’s platform, the party wants to use the strength of government to “encourage the increased safe development in all regions of the nation’s coal resources.”

So there you have it. When the government encourages renewable energy, that’s called picking winners and losers. But when the government encourages coal — an increasingly-expensive resource that has become an environmental nightmare — that’s “the best way to advance North American energy independence.”

And the picture becomes even more complicated when looking at the forces behind the boom in gas production. In fact, the fracking technologies people love to hold up as a miracle of the free market were made possible through years of government investment.

A 2011 investigation from the Breakthrough Institute showed that the natural gas industry was able to commercialize fracking technologies only after decades of tax credits, government R&D programs, government assistance with mapping, and partnership with companies entering commercial scale.

A geologist from Mitchell Energy, a leading company that pioneered fracking put it this way: “I’m conservative as hell. But the “[Department of Energy] did a hell of a lot of work, and I can’t give them enough credit for that.”

The examples of government assistance to help commercialize energy technologies goes on and on.

And most people only know about the ones that are easy to track. There are other imbedded subsidies — things like land give-aways to coal companies or tax exemptions — that are hidden below the surface. Here are a few examples, as illustrated by this subsidies iceberg infographic from Earth Track:

This long history of assistance to energy technologies is completely lost in the current debate.

The latest political dust-up is over support for wind through the production tax credit, a performance-based incentive crafted by Iowa Republican Senator Chuck Grassley that provides wind farm owners with a credit of 2.2 cents for every kilowatt-hour of electricity produced.

The credit is set to expire at the end of the year. Since it was introduced, the U.S. wind industry has been able to drop costs by 90 percent. However, because of suppressed natural gas prices (again, helped by decades of tax credits, commercialization partnerships, and R&D programs) the wind industry says it needs the tax credit for a couple more years in order to give investors certainty. If the credit expires at the end of the year, the industry could shed up to 37,000 jobs, according to a report from Navigant Consulting.

Extending the credit has very strong bipartisan support. After all, 81 percent of wind is installed in Republican districts nationwide. But there has been growing resistance from a band of free-marketeers who claim that the tax credit distorts the market, thus preventing Congress from extending the incentive for a year or two more. (Ironically, many of these same critics consistently vote to preserve permanent tax credits worth billions of dollars for the most profitable oil companies in the world).

At the same time, companies like the nuclear-heavy utility Exelon are pushing Congress to abandon the tax credit. Here’s what the company’s CEO said in a recent statement:

“These groups agree that it is now time for federal government to stop picking energy technology winners and losers through subsidies like the PTC and to allow market forces and state and local renewable portfolio standards to work.”

Exelon has a pretty substantial wind portfolio worth 900 megawatts of capacity. However, most of its portfolio — 93 percent — is made up of nuclear power plants. But if it were not for the immense support for nuclear through loan guarantees, government-backed insurance, waste containment programs, and cost-recovery allowances for cost overruns over the last five decades, we wouldn’t have much of a nuclear industry in this country.

But here’s something more remarkable: even while warning about “picking winners and losers,” Exelon executives have gone to the government to request loan guarantees and tax credits for its other operations.

In 2007, Exelon President Christopher Crane testified to Congress in favor of new loan guarantees for the nuclear industry. Of course, without these loan guarantees and government-backed insurance programs, no private investor would finance a nuclear plant in this country.

And just this year — two days after saying the production tax credit for wind should be ended — it was reported that Exelon would receive tax credits for two hydropower projects it had under development.

We desperately need an honest conversation about energy incentives.

In order to smooth out this complicated picture, there are some analysts and political leaders who say we should get rid of all subsidies to all technologies and let the free market hash it out. That’s an appealing argument to many. But it completely ignores the embedded impact of a century of support to fossil fuels and 50 years of support to nuclear.

It also ignores a more fundamental problem: Our climate is reaching a tipping point and we don’t have time to waste in transitioning away from carbon-based fuels. Period.

Most supporters of clean energy agree there will be a time to phase out incentives that are currently helping boost the industry. There are a lot of disagreements about exactly how and when it should be done, but that conversation is well underway as the cost of renewables continues to fall.

As we drudge through this political season and listen to the calls from selective free-marketeers on “picking winners and losers,” let’s remember how we got to where we are in the first place.

And more importantly, let’s remember where we’re trying to go.

This post was originally published on Think Progress. It has been reposted with full permission.

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Tags: Energy Subsidies, Fossil Fuel Subsidies, nuclear subsidies, renewable energy subsidies

About the Author

Stephen Lacey is an editor at Greentech Media. Formerly, he was a reporter/blogger for Climate Progress, where he wrote about clean energy policy, technologies, and finance. Before joining CP, he was an editor/producer with RenewableEnergyWorld.com. He received his B.A. in journalism from Franklin Pierce University.

Andrew Diamond

The fact that they are bullish on coal, means they are picking winners and losers.
T Adkins

Since I dont think either set of subsidies is going to be going away soon, how about we try to cut back on one of the biggest oil/energy users in the US. I speak of the US military. Military spending we basically spend more than the next 26 nations spend on military put together 25 of them are our allies. Even if we cut this spending in half we are still the number one spender. Yet as one of the biggest users of oil/energy cutting the military size should cut the oil/energy use.

This should weaken big oil, and free up money for research into alternatives, if this move can also get oil to under $65-$70 a barrel then it will also have a good shot of taking oil sand out of the market place, as last I saw they need the price to be $80 a barrel to do business.

Oil use cut backs also mean less money leaving the US and with more money in the US to spend we could get more done here.
thesafesurfer

Some more facts about renewable energy.
http://www.cbsnews.com/8301-505263_162-57358484/tax-dollars-backing-some-risky-energy-projects/?tag=mncol;lst;7

Sunpower is in charge of the California Valley Solar Ranch Project and received $1.2 Billion in loan guarantees from the taxpayers compliments of the Obama administration. The company’s latest filing with the SEC shows it owes more in liabilities than all of its assets. This situation is referred to as bankruptcy.
First Solar received $3 Billion in loan guarantees from the taxpayers. No stock in the entire S&P 500 companies lost more value in the last year than First Solar.
Five renewable energy companies that received taxpayer backed loan guarantees from the Obama administration have already gone bankrupt. Beacon, Evergreen Solar, SpectraWatt, AES’ subsidiary Eastern Energy and Solyndra.

The author of this piece has the gall to falsely state that renewables are just now receiving the same subsidies as fossil fuels. When you compare the money given to renewable energy for the amount of energy they produced with that money the subsidies to renewable energy dwarf anything given to fossil fuel companies for the amount of energy they supply to the taxpayer.

We all know what path is lined with good intentions for renewable energy, but a journalist ignoring the facts is disgraceful.
thesafesurfer

Another subjective piece of journalism catering to the economically unviable solar and wind special interest.

Study after study shows that solar and wind received 82 times the subsidies of fossil fuels.

http://www.cbo.gov/sites/default/files/cbofiles/attachments/03-06-FuelsandEnergy_Brief.pdf

http://www.eia.gov/forecasts/aeo/er/early_fuel.cfm

These two documents show that solar and wind received 82 times the subsidies given to fossil fuels per quadrillion BTU’s.

How Lacey can fabricate this story defies any standard of a search for the truth based on verifiable fact.

Another case in point from the REAL world. Germany is warning its customers of 30% increases in electric bills and unpredictable energy outages when the sun doesn’t shine and the wind doesn’t blow. Duh!

Claims based on falsehoods do not change the facts, but they do influence intellectually lazy individuals to believe the myths perpetuated by authors like Lacey.
- Bob_Wallace
  
  You know, it’a already September. Christmas is closer than you think.
  Santa is in a really, really crappy mood this year. Someone has melted his home. His reindeer are getting bogged down in melted permafrost.
  
  You might want to work at being more honest or Santa is likely to bring you some coal.
  
  And he’s likely to stuff it somewhere other than in your sock.
  - thesafesurfer
    
    Bob, I’m sorry the fact really blew you away. Sorry dude.
    - Bob_Wallace
      
      No, dude, it was the ignorance.
      
      I’m sure you don’t realize that we’ve been subsidizing fossil fuels for 100 years and their prices keep on going up. Heavily subsidized oil has gone from cheap to $100/barrel.
      
      We’ve only been subsidizing wind and solar for about 30 years.
      
      Wind has dropped from around $0.30/kWh to $0.05/kWh. A 6x decrease.
      
      Solar has dropped from $100/watt to less than $1/watt. More than a 100x decrease.
      
      Bet the folks who sold you that bogus oil/coal propaganda didn’t tell you that, eh, dude?
      - thesafesurfer
        
        No dude, it was black and white facts from government documents. You can ignore it and talk about a century ago and hide all you want.
        
        In 2011 wind and solar got 80+ times the subsidies of fossil fuels and the entire article is based on a a blatant falsehood.
        
        I bet you didn’t even have the intellectual guts to look at the material. No wonder liberals need so much help from the productive class. They are too lazy and too intellectually inept to help themselves. Rant on dude.
      - Bob_Wallace
        
        Let’s take a minute to talk about why a government might subsidize an activity.
        
        1) To make a critical commodity/service available to those who could not otherwise afford it.
        
        For example, the Mexican government used to subsidize corn tortillas and powdered milk as a way to help their poorest feed themselves. Some governments (Iran, in particular) subsidize gasoline, selling it at less than cost.
        
        2) To help an emerging activity gain a foothold so that it can compete in the open market.
        
        Think of this sort of subsidy as an investment in the future. The federal government heavily subsidized the mini-computer and that lead to the chip which allowed Wozniak to create the first Apple and launch today’s computerized world.
        
        Now fossil fuel subsidies have been ongoing for one hundred years. The fact that the price of fossil fuels continue to rise should tell you that government investing in fossil fuels hasn’t been working too well.
        
        On the other hand we’ve been investing only marginally in renewables for the last 30 years. Fossil fuels got 5x as much help in their first 15 years as have renewables.
        
        But even with that relatively small amount of assistance the price of renewables has moved down very rapidly and extremely.
        
        Wind down 6x. Thirty cents to five cents.
        
        Solar down 100x. One hundred dollars to less than one dollar.
        
        Now you’ve got your baggies all waded up in your crack over the ratio of subsidy dollar to power produced to date, but you’re looking at it all wrong.
        
        Think investor. Not Mitt–clean out the cash-vulture/investor, but Warren Buffet/George Soros investor.
        
        You put money into something in order to make you money down the road.
        We’ve invested in wind and solar, brought their prices down an incredible amount so now we will be able to produce cheap electricity from wind turbines and solar panels from now until the Sun blows up.
        
        It does not at all matter that we’ve gotten more power per dollar to date from fossil fuels. Fossil fuels are done. What matters is that we have opened the cheap power pipe and we’re going to enjoy cheap, clean, safe power for friggin’ ever.
        
        Probably the smartest money we have ever spent.
        
        Quit smoking the crap weed that the fossil fuel industry gives away. That stuff will wreck your health.
      - thesafesurfer
        
        False assumptions and misrepresentations do not make a persuasive argument.
        
        Subsidies are given to the politically connected by corrupt politicians no matter what energy source we are talking about-wind, solar, geothermal, tidal, oil, gas, nuclear, coal, etc. etc. etc.
        
        There is no critical shortage of energy that wind and solar address. The fact they need subsidies is proof of this. If there was a critical shortage people would demand and pay for wind and solar in the competitive marketplace.
        
        You make the classic mistake in your characterization of subsidies supplied by the Mexican government. Those subsidies are captured by the tortilla makers and the dairy farmers and not by the poor. Just as housing subsidies go to construction companies and medical subsidies go to hospitals and other providers.
        
        Subsidies for wind and solar benefit the makers of wind turbines and solar panels and don’t reduce the cost to the consumer, who paid the taxes for those subsidies in the first place.
        
        You write as if subsidies have no cost. The money does not fall from the sky. Taxpayers pay for the subsidy or the debt increases and taxpayers pay for the interest on that principal as well as the principal in the end.
        
        You should include time to study basic finance in your future.
        
        Again, subsidies are given to the politically connected by corrupt politicians.
        
        The iPad needed a subsidy to compete in the competitive marketplace? The iPhone needed a subsidy to compete?
        
        Bad products need subsidies.
        
        The claim that government subsidies are an investment in the future is also a false claim. Government subsidies are an investment in the political process.
        
        An elected official or bureaucrat picking winners and losers in the energy marketplace is a sure sign for disaster.
        
        CBS News counted 12 clean energy companies that are having trouble after collectively being approved for more than $6.5 billion in federal assistance. Five have filed for bankruptcy: The junk bond-rated Beacon, Evergreen Solar, SpectraWatt, AES’ subsidiary Eastern Energy and Solyndra.
        
        Those companies weren’t chosen because of careful studies or evaluations of sound business practices. They were chosen because their owners were connected political insiders and $6.5 billion dollars in precious taxpayers funds that could have relieved REAL PAIN AND SUFFERING is wasted.
        
        Again subsidies go to politically connected politicians from corrupt politicians.
        
        Claiming that wind and solar will produce power forever is another totally false claim.
        
        Wind turbines only work when the wind blows and solar only works in the daytime when the sun shines.
        
        So basically wind and solar are vehicles for connected business owners to get tax payer money compliments of corrupt politicians.
        
        End all energy subsidies of all kinds to everyone in every industry. NO MORE SUBSIDIES.
      - Bob_Wallace
        
        “False assumptions and misrepresentations do not make a persuasive argument.”
        
        Correct. And bullshit stinks. Please quit trying to shovel it onto this site.
        
        “Subsidies are given to the politically connected by corrupt politicians. ”
        
        Sometimes. Did you pay attention to how Bush and Cheney operated when they were in office and how their friends made out like bandits?
        
        “There is no critical shortage of energy that wind and solar address. The fact they need subsidies is proof of this. If there was a critical shortage people would pay for wind and solar in the competitive marketplace”
        
        There is a critical need for clean, non-GHG producing energy.
        
        “You make the classic mistake in your characterization of subsidies supplied by the Mexican government. Those subsidies are captured by the tortilla makers and the dairy farmers and not by the poor. ”
        
        That’s an enormously ignorant statement. I spent considerable time in Mexico when their food subsidy was in place and subsidized foods were dirt cheap.
        
        “Subsidies for wind and solar benefit the makers of wind turbines and solar panels and don’t reduce the cost to the consumer, who paid the taxes for those subsidies in the first place.”
        
        That’s nothing but a blatant lie. A very clear example – put panels on your roof and take 30% off your federal tax payment.
        
        “You write as if subsidies have no cost.”
        
        That’s a stupid claim. I spoke very specifically about subsidies as investments.
        
        “You should include time to study basic finance in your future. ”
        
        Been there, took the classes, started the business, made a bunch of money, retired young, doing well off of my investments.
        
        “The iPad needed a subsidy to compete in the competitive marketplace? The iPhone needed a subsidy to compete?”
        
        Apple needed the ‘computer on a chip’ to get started. That innovation came mostly with federal assistance.
        
        (I’m skipping stuff because it’s just too dumb to merit a comment.)
        
        “Claiming that wind and solar will produce power forever is another totally false claim. ”
        
        Yes, here you are correct. When the intensity of the Sun increases to the point at which it cooks Earth then solar panels and wind turbines will also cook. That’s a few billion years away.
        
        “Wind turbines only work when the wind blows and solar only works in the daytime when the sun shines. ”
        
        There is not one single generating technology that operates 24/365. That’s why we build extra capacity into our grid system.
        
        Wind and solar are more variable that other types of generation and will require storage. Wind + storage and solar + storage are going to be cheaper than either new coal or new nuclear.
        
        BTW, are you aware that we built over 20GW of pump-up hydro storage in order to make nuclear work on the grid?
        
        “End all energy subsidies of all kinds to everyone in every industry. NO MORE SUBSIDIES.”
        
        Fine. Those who have been receiving subsidies the longest and whose prices are rising in spite of subsidies need to go first. When you fossil fuel industry people give up your public teat get back to us.
      - thesafesurfer
        
        It’s getting impossible to understand what you are talking about as you ramble incoherently.
        
        So I’ll get back to the basics that you’ve wandered so far away from.
        
        Solar and Wind are unreliable by their nature.
        The subsidies given to them for the power they produced was 82 times that given to fossil fuel.
        
        The subsidies given by the Obama energy department went to connected political insiders and the results are that the 12 biggest recipients who got $6.5 Billion are either bankrupt, insolvent, or in severe financial distress according to their own filings.
        
        So feel free to ignore whatever you want and supply some generic, pointless rant.
      - Bob_Wallace
        
        Right.
        
        As I take your fossil fuel industry talking points one by one and show others why you are wrong, I’m wandering.
        
        Got it. So now I’ll play Whack-A-Mole with your foolishness some more.
        “Solar and Wind are unreliable by their nature.”
        
        No. Solar and Wind are variable by their nature. Because they are variable our future grid will make use of much more storage, more dispatchable generation and more load-shifting than our historical/past grid.
        
        In addition, our 21st Century grid will give us cheaper and
        cleaner electricity than what the 20th Century gave us. If we’re lucky we’ll get enough of our new grid in place and cut back on fossil fuel use quickly enough to keep from totally wrecking our planet.
        
        We just don’t need more of the floods, droughts, heat waves, and massive snowfalls that oil and coal have been bringing us.
        
        We invested a lot in fossil fuels and those investments are not paying off. Those investments are not only not returning dividends but they are costing us in terms of health and environmental costs. They are dragging us into oil wars and getting our junk fondled when we travel.
        
        We have invested a small amount in renewables and those investments are paying off massively.
        
        Now, head back to Koch U. and see if they’ve got some fresh bogus talking points. You’re repeating yourself.
      - thesafesurfer
        
        You don’t seem to grasp my point, and I’ll take responsibility for that. I’m not advocating fossil fuels. I’m advocating plentiful, cheap energy produced in the marketplace free of subsidies and crony capitalism.
        
        The idea that entrenched entities are impregnable in the market is not supported by the evidence. Ask record stores or video stores. If someone developed new energy that was cheaper and more efficient than coal, nuclear, gas, etc. people would shift in a heartbeat.
        
        Wind and solar are not those.
        
        There is no morality involved. There is no good or evil. There is the demand for energy and the supply of energy and the development of new technologies.
        
        Here is some food for thought, the subsidies to wind, solar, oil, gas, nuclear keep real advances from being undertaken. Who can afford to compete in a already unlevel playing field.
        
        Saying that one group had subsidies so another group deserves subsidies is absurd when the truth is subsidies lock in entrenched entities, and only the end of subsidies will truly unleash innovation.
      - Bob_Wallace
        
        ” You don’t seem to grasp my point, and I’ll take responsibility for that. ”
        
        Your point is bogus. That, you fail to grasp.
        
        Take responsibility for not understanding how smart investing works.
        
        The subsidies we are providing wind and solar are causing their costs to drop. Drop very significantly. Drop very rapidly.
        
        The subsidies we are giving oil and coal are not causing them to drop in price.
        ———————————————————————————————–
        You want the free market to solve our problems. It will not.
        
        Read some history. Read about monopolies. A truly free market will give us one oil company in a matter of a couple of years through mergers and acquisitions. There is no reason why oil companies should spend redundant money except for regulations that keep them from joining up into one massive World Oil Company, eliminating advertising, extra gas stations, etc.
        
        Within a couple of years we would be paying $15 to $20 a gallon and lining up for hours, waiting on our turn at the pump.
        
        A couple of years to create World Oil Co., to create WallyAmzWorld Co. and another short wait until they merge into The Company, Inc.
        
        A totally free market is extremely dangerous. The market must be adequately regulated in order to keep the greediest from ruining the lives of the rest of us.
        —————————————————————————————————-
        The free market will not develop new technology which
        requires significant research and development and will not be profitable in a short period of time. This quarter’s bottom line is what counts.
        
        Garmin did not develop GPS and put the satellites in orbit to make it work.
        Apple did not develop the chip that made the personal computer.
        
        The US government has played a very significant role in every major technology we enjoy. Corporations get in the game once the route to profit is clear.
        ———————————————————————————————
        Here’s a fact for you to chew on. The US taxpayers have provided subsidies for coal, oil, natural gas, wind, solar, tidal, geothermal, nuclear, hydro, cold fusion, and any other type of electricity generation you can think of.
        
        Sometimes the subsidies have been in the form of research, sometimes in market support.
        
        Wind and solar subsidies are paying off. Wind and solar are bringing down the price we pay at the meter. Hydro helps keep our electricity costs down, as does geothermal.
        —————————————————————————————–
        Try dumping the right-wing, pro-coal talking points….
      - thesafesurfer
        
        The free market always has and always will solve problems better than any form of central planning has or ever will because the free market draws on the collective brain power of everyone involved in the market while central planning draws on the thinking of a much smaller group that invariably is involved in government, but not intimately in the market they plan for.
        
        Invariably champions of central planning and government intervention that determines winners and losers can’t live up to the standard they demand of the free market.
        
        The central planners demand that the free market solve all problems without suffering, an intentionally impossible standard.
        
        The choice is which system solves problems better and the evidence is clear and overwhelming, the free market employing the collective actions of millions of participants invariably finds solutions through the process of creative destruction that has moved mankind forward and a previously unheard of pace for the last three hundred years while central planning has visited more suffering on more human beings around that globe than is truly impossible to grasp.
        
        Arguments that champion small groups of bureaucrats in control are always easily banished to the pile of utter nonsense.
      - Bob_Wallace
        
        I agree that the free market will often solve problems. On the other hand, basic research – the building blocks on which our knowledge is based is not carried out by free market/private enterprise. This is something that we do at the government sponsored level.
        
        Now I guess you’re moving on to central planning because it’s starting to sink in that our subsidies for renewables are paying off and our subsidies for fossil fuels aren’t.
        
        But you know what? I find it a waste of time to argue with you. You’re all pumped through with libertarian/right wing talking points and you’re slow to understand facts when someone hits you in the face with them.
        
        This is a site about renewable energy and clean tech. If you want to have a philosophical discussion about right wing beliefs, please take it elsewhere.
        
        Have a nice day….
      - thesafesurfer
        
        Government and central planning are synonymous. The premise that government is crucial to basic research is totally false. The only role that government plays in basic research is to take money from private sector taxpayers and transfer it to politically connected special interests in the private sector is the way that government carries out basic research.
        Government makes every single process it touches less efficient and more costly.
        The subsidies to wind and solar are a perfect example. 12 wind and solar companies receiving $6.5 Billion going bankrupt is an example of the waste of government funding by special interests.
        
        This article promoted falsehoods about the subsidies to wind and solar throughout.
      - Bob_Wallace
        
        Your BS needs to go to some anti-factual site….
      - http://cleantechnica.com/ Zachary Shahan
        
        Completely, completely ridiculous… (as you write on the internet and a computer, which came about through government research).
        
        Please refrain from trolling this site and have a nice day.
      - http://cleantechnica.com/ Zachary Shahan
        
        the free market is an illusion. if you don’t get that, there’s no helping you. there are several key assumptions to a ‘free market’ that are pure fantasy. so you’re starting from fantasy land. no wonder we can’t have a reasonable discussion.
        
        really, please just go sit in on some college-level economics courses.
      - http://cleantechnica.com/ Zachary Shahan
        
        this is complete nonsense, i’m sorry.
        
        for one, you continue to ignore the fact that externalities are a form of subsidy, and a huge one. that military protection of overseas oil is a subsidy, a big one. and that, yes, 100+ years of subsidies equals an uneven playing field that needs to be leveled.
        
        the idea that there should be no subsidies is completely idealistic and unrealistic. it’s simplistic thinking that would lead this country to total ruin if it were followed.
      - thesafesurfer
        
        No, actually there are no direct subsidies to candy makers, pencil manufacturers, software developers, and on and on and on.
        
        The truth is exactly the opposite. The idea that subsidies are mandatory and and unavoidable part of life is idealistic and completely disconnected from the truth.
      - http://cleantechnica.com/ Zachary Shahan
        
        To skip over key purposes of subsidies and mention irrelevant industries is pure nonsense, and a clear sign that you can’t address the issue at hand.
      - http://cleantechnica.com/ Zachary Shahan
        
        “Solar and Wind are unreliable by their nature.
        The subsidies given to them for the power they produced was 82 times that given to fossil fuel. ”
        
        Wrong.
        
        solar & wind are intermittent. they are quite predictable.
        
        the subsidies given to them in one short timeframe? seriously? cherry picking is cherry picking, no matter who does it.
        
        The Obama part: bs. over a year of witch hunting has come up with nothing. it’s total bs. please stop with that nonsense if you want to be taken half-seriously.
      - thesafesurfer
        
        The math is simple, straightforward and totally undeniable. For the amount of energy produced the subsidies given to wind and solar were 82 times that given to fossil fuels.
        
        A refusal to accept the truth does not alter the truth. The inescapable fact is that solar and wind cannot produce cheap, reliable energy no matter the wants and desires of their supporters.
        
        The fact that the defenses of these failed energy systems become more and more extreme indicates the emotion and passion invested by their supporters instead of logic and reasoning.
      - http://cleantechnica.com/ Zachary Shahan
        
        it’s as simple as you want to make it, or as comprehensive as you want to make it. simple math doesn’t necessarily equal good math (and certainly not in this case!).
        
        “A refusal to accept the truth does not alter the truth.”
        -ditto.
        
        more and more extreme? no idea what you’re talking about.
      - http://cleantechnica.com/ Zachary Shahan
        
        you’ve really skipped over a whole ton of important here, and repeatedly.
        and the claim that all these companies are just tied in to politicians is complete bunk. no proof, and a tremendous amount of assumptions here.
        
        wind and solar only generate electricity when they do. coal and nuclear the same. countries are now hitting really high percentages of wind and solar with no problem. in fact, they’ve driven down the cost of electricity.
        but currently, entire electricity industries are used to one thing and hesitant to change, even if the change is better for everyone in the world. hence, a little hand-holding needs to be done.
        
        studies have also found that payback on renewable energy subsidies is greater than the subsidies themselves. that’s a rather important thing to skip over.
        
        lastly, for now, you continue to skip the fact that fossil fuels benefit from tremendous subsidies (externalities) that won’t go away without government intervention.
      - thesafesurfer
        
        The idea that energy companies are resistant to change is preposterous. Energy companies constantly try to find new ways to accomplish their mission with more efficiency and better cost containment because that increases their profit and value. They have massive incentives not to stand still.
        
        How do fools think that innovations in fracking and horizontal drilling were made. By the energy companies themselves investing in research and development driven by competition in the market place.
        
        Every energy company in America knows that to become entrenched and incapable of rapid change is a recipe for disaster and bankruptcy.
        
        The truth is that wind and solar companies are the ones going bankrupt in the first place.
      - http://cleantechnica.com/ Zachary Shahan
        
        not sure where this is coming from, been awhile since i checked in, but there’s a difference between accommodating change within your industry and being resistant to overall change in the energy industry as a whole that boots you out.
      - http://cleantechnica.com/ Zachary Shahan
        
        there’s also the fact that we have HUGE externalities that need corrected for. unless we properly price GHG emissions, we must subsidize cleantech to correct for that.
        
        that’s really not complicated, but is very popular for one side of the debate to ignore.
      - thesafesurfer
        
        Here is the exact math. The CBO study here
        http://www.cbo.gov/sites/default/files/cbofiles/attachments/03-06-FuelsandEnergy_Brief.pdf shows that in 2011 the renewable tax preferences totaled $12.9 Billion and fossil received $1.7 Billion in tax preferences. Renewable produced 7.52 quardrillon BTU’s in 2011 and Fossil produced 81.08 quadrillon BTU’s according to the date here
        http://www.eia.gov/forecasts/aeo/er/early_fuel.cfm
        
        So for every quadrillion BTU produced by renewable the tax preference was $1.7 Billion. It’s simple math. 12.9 billion divided by 7.52=1.7
        
        For every quadrillion BTU produced by fossil the tax preference was 21 million.
        
        So in 2011 the tax preferences given to renewable energy was 82 times that of preference given to fossil fuels.
        1.7 Billion compared to 22 million.
        
        The author’s statement “hat renewables are receiving some of the same incentives that fossil fuels…” is completely false and disproven by the facts in the government records.
        
        Now I’m sorry you believe a myth. I’m sorry you hate math and reality and truth, but all of your ranting and raving and wishing and dreaming doesn’t change the truth, the facts, or reality.
http://www.facebook.com/matthew.t.peffly Matthew Todd Peffly

And since we are talking “Different Standard”, why is it that no one every talks about the cost to build 2GW of backup power for a 2GW Nuclear power. When it is turned off, for scheduled maintenance, or unscheduled, or overhead cooling water. The grid looses 2GW. But coal and nuclear both get to claim 24/7/365, and never add in the cost of there being extra plants to cover when one plant can’t run.
- http://cleantechnica.com/ Zachary Shahan
  
  exactly.
- Bob_Wallace
  
  No one seems to talk about the 20+GW of pump-up hydro storage we built in order to incorporate nuclear onto the US grid. Reactors can’t be turned off at night when demand drops so the extra power had to be stored for peak hour use.
  
  That cost is also ignored.
  - http://cleantechnica.com/ Zachary Shahan
    
    So many costs ignored…
jeremy

“god given resources” huh, fine, but who says god wants us to burn oil just because she gave it to us? Maybe god intended for us to not kill to gain access to oil too? Or maybe the republicans know god wants to support increased profits for oil companies too?
Anne

Natural gas will NOT reduce CO2 emissions. It will only slow down the increase. Unless the USA can magically flatline its energy consumption (unstoppable growth has been the norm for centuries), natural gas is not a panacea.

Climate change demands that we completely eliminate CO2 emissions. Natural gas is not CO2 free, so it is in no way a solution for averting climate change. We must aim for zero CO2 emissions. Merely reducing them is not good enough.

Finally, the shale gas boom may be a devil’s bargain. Only decades from now we will know the true effects of the chemicals pumped underground today. The only thing we have is hope that it will not turn out as badly as some think it will.
mk1313

Natural gas is a stopgap measure that will follow the pattern of oil becoming more expensive quickly and will still result in global warming. It may be reducing CO2 emissions but it is still adding them to the air faster than can be taken out and so is still a bad choice.
Bob_Wallace

Natural gas will certainly play a role in our move from coal and oil to renewables. How large a role will depend on how large the supply is and how quickly we burn through that supply.

Conservative estimates of supply are as low as 20 years. Optimistic estimates run as high as 100 years. One problem with the 100 year estimates is that there is a lot of speculation about what may be underground and what is “technically recoverable”. We all know that speculation is speculation. And what might be technically recoverable is not necessarily economically recoverable.

Furthermore those estimates are based on 2010 burn rates. If we use natural gas to fuel cars,pickup trucks, vans, buses, long haul trucks, dump trucks, locomotives, aircraft, ships etc., to make electricity and as an export we will increase the 2010 burn rate and shorten the 20 – 100 year supply.

From 2010 to 2011 we increased the amount of NG used for electricity by 3% and I would bet that 2011 to 2012 is going to be quite a bit higher. Start powering a lot of vehicles and that 20 – 100 years drops to 10 – 50 years.

Furthermore, the cost of NG is artificially low at the moment. We had a drilling stampede a few years back, wells were drilled at too high a rate and now we have a glut of NG that is being sold off at bargain prices. As soon as we burn through the surplus and start drilling new wells the price will jump up. Current prices will not pay for a new well.

Natural gas, IMO, is a short term replacement for coal. If we can get it out and burned without too much leaked directly into the atmosphere and without screwed up the aquifers too much then it’s an improvement over coal.

But transportation, forget NG. Go straight to electricity from renewable technology. We don’t need to get there by going the NG route.
rkt9

This is a very good article! I would like to see some statistic on how much energy we get from each dollar of subsidy.
I realize to some degree it is an apple and oranges issue, but the argument I always get from fossil heads, is that we get way more energy from each dollar of fossil fuel subsidy than from renewables. Is there a way to break it down?
- Bob_Wallace
  
  That’s not a reasonable comparison. You are asking how much energy/subsidy dollar we get from a mature technology which used public money to reach maturity as opposed to the energy/subsidy for an emerging technology.
  
  Better, take a look at each of their early years. Over the first 15 years of each energy source, oil and gas got 5 times what renewables got (in 2010 dollars) and nuclear energy got 10 times as much.
  
  http://www.think-energy.org/index.php/articles/16-renewables/clean-tech/287-oil-gas-over-13-times-more-in-historical-subsidies-than-clean-energy
  
  The question from fossil heads is something like asking how much money we currently spend each year to subsidize the development of aspirin vs. how much we spend looking for a treatment for drug-resistant TB.
  - rkt9
    
    I agree, it is not a reasonable comparison, but since when have fossil fuel proponents ever been reasonable?
    Their argument is that for every dollar subsidy for fossil fuels we get 100 marbles, and for renewables we get 1 marble. It is very frustrating to fight this mentality, but yet we must somehow make a persuasive case for renewables.
    - Bob_Wallace
      
      Try pointing out the true cost of fossil fuels.
      
      If you haven’t read it work your way through the Harvard study…
      http://onlinelibrary.wiley.com/doi/10.1111/j.1749-6632.2010.05890.x/full
      Point out to them that while they might argue with the actual amount of the external cost of burning coal, the fact remains that they are paying some amount of money over and above the meter price of coal through their tax dollars and insurance premium payments. (Spending tax dollars usually gets their attention.)
      
      Burning coal costs us about a billion dollars a day. Those are coal subsidies.
      
      Then point out to them that the reason we sent our troops to war in Kuwait was to protect oil wells from Saddam. And the reason that terrorists flew planes into the World Trade Center and Pentagon was because they were pissed at our troops being in their ‘holy lands’. And the reason for going into Afghanistan and the excuse for going into Iraq all goes back to that First Gulf War in Kuwait.
      
      So far about $9 trillion it has cost us. Those are oil subsidies.
      
      Then point out why we are spending billions and billions on Homeland Security and getting our junk fondled at the airport goes directly back to the First Gulf War which was all about protecting oil wells.
      
      Point out to them that world demand for oil is increasing. Those countries which continue to use lots of oil might find themselves sucked into more oil wars in the near future.
      
      Ask them if a wise business person might invest a relatively small amount of money in order to avoid a huge cost later on.
      
      The subsidies for renewable energy now promise enormous returns in a very few years. It’s just wise investing.
      - rkt9
        
        Thanks for the link, i will work my way through it, also thanks for the great ideas, I will use them.
      - Bob_Wallace
        
        Give them one more argument.
        
        Yes, we have supported oil, wind and solar with subsidies. Look how that’s played out.
        
        Wind, 30 years ago, produced electricity at $0.30/kWh. Now it’s producing at $0.05/kWh and on its way down to $0.03/kWh in the near future.
        
        Solar panels, 30-40 years ago cost as much as $100/watt. Solar panels are now being manufactured for less than $1/watt.
        
        Oil, in 1946 was $18.89 a barrel (2012, current dollars) and in 2012 it’s running about $100 a barrel.
        
        Wind has gone down to 1/6th its early price, solar to 1/100th, and oil has risen by more than 5x. Exactly how has that oil subsidy worked out for us?
        —
        
        (Those early days prices for wind and solar are from memory. I’ll try to look them up or perhaps someone has a good link.)
      - rkt9
        
        OH! I like those arguments even better, not so political, and just plain common sense! I am working my way through the study now, excellent, thanks!
      - Bob_Wallace
        
        And point out to them that there is no way to drill our way to cheaper oil, “Baby”.
        
        We’ve burned the easy and cheap to get to stuff. We’re now going farther out to sea in to much deeper water to find oil. We’re using more and more energy to turn crappy Canadian tar sands into oil. And we’re getting ready to start drilling where the Arctic sea ice used to be – and that won’t be cheap.
        
        Best we can hope for is that we find some expensive oil.
        
        Or we could just say “Screw it, Baby, screw it” and quit using oil. We’ve got cheaper options.
      - Bob_Wallace
        
        ”
        An economic breakthrough occurred in the 1970’s when Dr. Elliot Berman was able to design a less expensive solar cell bringing the price down from $100 per watt to $20 per watt.”
        
        http://www.makeitsolar.com/solar-energy-information/01-solar-history.htm
        
        Since 1980 the average cost of electricity from wind in the United States has decreased from over 30 cents per kilowatt-hour to less than 5 cents/kWh.
        
        http://www.masstech.org/offshore/CapeWindFAQs/financial.html
        
        Here’s the oil data source I used…
        
        http://inflationdata.com/inflation/Inflation_Rate/Historical_Oil_Prices_Table.asp
        
        As an investor (which the taxpayer has been) does it make sense to invest your money into energy sources that save you money or that cost you more and more money as time goes along?
      - http://cleantechnica.com/ Zachary Shahan
        
        The historical subsidies stuff should definitely be hammered home, too.
      - Edward Kerr
        
        Interesting analysis Bob,
        Only one issue on which I might take a contrary point of view. Though this may not be the best venue to mention this point, there is a tremendous amount of evidence that it wasn’t “terrorists” that flew planes into the World Trade Center. Nor was it a plane that hit the pentagon. (I won’t belabor the points here as anyone can research the issue for themselves) However, your main point that the wars were fought over oil is completely valid.
      - Bob_Wallace
        
        ” there is a tremendous amount of evidence that it wasn’t “terrorists” that flew planes into the World Trade Center. Nor was it a plane that hit the pentagon ”
        
        (Bob’s eyes start rolling out of control…………..)
http://www.facebook.com/Solarfarm Marco Bonvini

Great post! Finally a good piece on why renewables have been, currently are – and likely will be for the future – less expensive to be developed to commercial-scale for the taxpayer.
I guess two other points need to be fully exploited to stand against the fossils’ lobby and the GOP campaign: [1] the job-creation benefits in the renewables are higher in absolute figures of jobs, grow at a faster rate, generate skills with higher funcionality compared to the jobs created in the oil&gas sector and [2] the cost of the energy for solar and wind in terms of Total Lifecycle cost is cheaper than any other source and in certain conditions (above 1.500 kWh/sqm irradiation and above 2.000 yearly hours of wind) solar and wind do not require any subsidy to compete effectively with gas and coal.
- http://cleantechnica.com/ Zachary Shahan
  
  Thanks! And will do our best to keep hammering home those 2-3 key points!
http://www.facebook.com/matthew.t.peffly Matthew Todd Peffly

If the US would cut all the specials it give to coal, gas, oil; then at least you might think they were just ignoring the role the government has played in energy production, ports, transportation, etc. But as is …