Friday, September 7, 2012

Has the Wind Industry become a Hi-Tech Welfare Program?

As reported by:
http://www.windaction.org/opinions/35947

High-skilled, high-tech welfare


 We cannot evaluate the efficacy of federal spending programs by asking the recipients of federal largess whether they are happy with the money. Of course they are happy! The real issue is whether American taxpayers and electricity ratepayers should be happy.

September 4, 2012 by Bruce M. Everett in Cape Cod Times

In an Aug. 23 front-page column, Sean Gonsalves claims Cape Cod Community College's recent decision to install solar panels and wind turbines validates both the stimulus bill and the green energy jobs program. He is wrong on both counts.

Renewable energy is expensive. Onshore wind power costs at least three times as much as electricity produced from natural gas. Offshore wind costs six times more, and solar 10 times more. Renewables are forced into the marketplace by a complex web of federal and state subsidies that hide their true cost. The federal tax credits mentioned in the article are one subsidy; others include renewable energy standards, net metering, federal loans to manufacturers, production tax credits and local property tax relief, all of which disguise the true cost of renewable energy.

Cape Cod Community College has every right to seek federal and state support for its budget, but remember that the college is a public institution. The question is not whether the college saves money on solar energy but whether the public saves money. The renewable energy savings claimed by the college are an illusion. If we took $1 from every Cape Cod resident, we could buy the college a couple of S-class Mercedes cars. The college, the Mercedes factory in Alabama and the local car dealer might be thrilled with this arrangement, but the rest of us should object - and strongly.

We all understand that renewable energy subsidies provide jobs for people like Mr. Giles and his employees at Turning Mill Energy in Sandwich. We must remember, however, that the high costs of solar and wind energy are paid by someone else, and those lost dollars would have created jobs somewhere else in the economy.

We cannot evaluate the efficacy of federal spending programs by asking the recipients of federal largess whether they are happy with the money. Of course they are happy! The real issue is whether American taxpayers and electricity ratepayers should be happy. When the federal government is running deficits north of $1 trillion a year, Turning Mill Energy's federal tax credit has to be borrowed from China and paid back with interest by future generations.

I am happy for Mr. Giles and his colleagues, but they are enjoying a kind of high-skilled, high-tech welfare at our children's expense.

In its current form, renewable energy is simply too costly to make a meaningful contribution to our energy balance. After all the federal dollars and all the hype over the past four decades, wind energy accounts for 1 percent of U.S. energy use today, and the Department of Energy projects growth to only 2 percent by 2035. Solar accounts for 0.1 percent of our energy today and is expected to meet less than 0.5 percent in 2035. Research may yet produce technological breakthroughs, but subsidizing the current generation of technology impedes rather than facilitates progress. Why spend research dollars on improved technology, when you can sell the current inferior stuff at a profit?

The U.S. economy cannot grow by forcing high-cost energy into the marketplace. Those who produce this high-cost energy will gain, and the public will lose.

We have recently discovered in the U.S. vast new reserves of natural gas - a cheap, clean and efficient option. Massachusetts needs to tap into this low-cost, environmentally friendly option and forget about wind turbines, solar and - oh yeah - that monstrous dirty fuel oil power plant on the canal. If we do, we'll get lower taxes, lower electricity bills and more jobs.

Mr. Everett of Chatham teaches graduate-level energy economics at the Fletcher School at Tufts University.

Web link: http://www.capecodonline.com/apps/pbcs.dll/article...


3 comments:

  1. The natural gas reserve you mention can be accessed without controversial
    fracking. The stalled pipeline project that will access the Canadian reserve will produce thousands of jobs and cut our dependency on Middle Eastern oil by an estimated 20%. Obama's recent cafe standards designed to increase milage /less oil consumed will not happen until 2020. (footnote to this story is GM has ceased production on the Volt, which was included in the reduction statistics.) And finally, today is the 1 year anniversary of Solyndra's bankruptcy......560 million tax dollars gone. As usual, Eldon is correct in his post. The silly season of politics is doing more harm than good. Just something else to think about when you push that button on election day.....

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  2. I understand it ain't wise to buy into a system of support that is costly and not effective. However, I did not read Bruce nor Tom nor Eldon mentioning the staggering $$ passed out to subsidize the oil and coal industry, nor the consequences to the air and water and land and human health these forms of energy cause & cost, and the long-term cost of things like using the dirty oil from Tar Sands, and the utterly foolhardy nature of its line adjacent to major fresh water aquifer--try cleaning up a ruptured pipe in an underground aquifer!!(An aside: the wars of the future will be over fresh water.) And all this, without tossing in the global warming issue and its possible incomprehensible costs if the oceans do rise a foot and the plants begin to not be able to perform as we are used to and count on them doing for us. I recognize we need to transition from one source to another (Amory Lovings’ talks about wind and solar supplementing that transition and Natural gas being the primary new source) and there's potential corruption in all walks of life, whether free markets or federal programs. But the talk radio shouting about a political football of a few thousand jobs strikes me as terribly "short-minded" and disregards the health and environmental impacts of continued development of dirty energy sources.

    So to me, yes, in a sense the fed. promoting solar and wind is like dealing with a tax supported welfare/addiction and risking shifting one welfare/addiction for another, but even so, it is my understanding that wind, solar and natural gas, as well as plain old "better efficiency" regarding every system that uses these resources are all still better long-term than pouring billions in subsidies toward oil & coal.

    Being from an art background, I would add that like the Apollo program, in what some might call an "impractical" argument, there is an important element of "inspiration" in seeing a vast grid of wind turbines in the factory farm corn fields of my home state of IN (a good use of this otherwise monocultured land). Such a sight prompted in me, my 19 yr. old VT engineering program son, and my younger nieces and nephews, a spontaneous excitement from the undeniable awareness in seeing concrete possibilities for energy that was "out of the locked box" of oil and coal that we have created. Yes, Eldon you are wise that we retain vigilance in accountability for our tax monies, but the lesser of the evils in this time of transition seems to me first shifting the subsidizing of oil and coal funding toward efficiency and research, even while supporting sun & wind in the right measure.

    Are either of you aware of Amory Lovings 40 (or is it 50?) year plan to eliminate all oil, nuclear, & coal as energy sources in the US without any federal support to make this happen? [See A.Lovings TED talk]

    A last question: Perhaps obviously, I'm not an expert in any of these realms, but Germany seems to be making solar work at a much higher percentage already--I don't understand why we cannot move faster in a similar direction than the almost negligible percentage Bruce quoted in 2035?

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    Replies
    1. Hello John,
      Comparing subsidies between wind and fossil fuels requires a little more understanding than you've offered.
      Coal and natural gas fuels are used to generate 68.6% of the total of our nation's electricity. Wind is used to generate 2.3% of the total. Oil is used to generate 0.9%
      The Institute for Energy Research decided to calculate the federal subsidies and support per unit of electricity production from the information provided in EIA’s 2010 report and the generation data in its Monthly Energy Review.[iii] The ratio of dollars to production is given in the following figure. As can be seen by the figure, solar is being subsidized by over 1200 times more than coal and oil and natural gas electricity production, and wind is being subsidized over 80 times more than the more conventional fossil fuels on a unit of production basis. http://www.eia.gov/analysis/requests/subsidy/pdf/subsidy.pdf

      I am aware and have read some of Loving's work and I agree eliminate that vast majority of these subsidies.

      And incidentally, the Apollo program was accomplished by a scientific team at NASA and not politicians and lobbyists in Washington.



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