Politicians Can't Get Enough Energy Cronyism

From solar to coal, politicians love to subsidize power production.

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Solar panels at Nellis AFB
USAF/Wikimedia Commons

Despite the breadth of the current political divide, it appears that there is at least one thing that all politicians can agree upon: energy sector cronyism. The only real dispute is over the preferred beneficiaries.

Under President Barack Obama, green energy subsidies were given out like candy. The failure of solar panel company Solyndra is well-known, but the problem extends well beyond the shady loan deal and its half-billion-dollar cost to taxpayers.

Between 2010 and 2013, federal subsidies for solar energy alone increased by about 500 percent, from $1.1 billion to $5.3 billion (according to the U.S. Energy Information Administration), and all federal renewable energy subsidies grew from $8.6 billion to $13.2 billion over the same period. Congressional Budget Office testimony before Congress further reported that 59 percent, an estimated $10.9 billion, of energy-related tax preferences in 2016 went to renewables.

Subsidies have come down from their 2013 peak, thanks to the expiration of some of the post-financial crisis "stimulus" programs, but so-called green energy—solar in particular—still receives vastly higher subsidies on a per- kilowatt-hour basis. However, that didn't stop the largest U.S. solar panel manufacturer, SolarWorld, from filing for bankruptcy earlier this year despite $115 million in federal and state grants and tax subsidies since 2012, along with $91 million in federal loan guarantees.

SolarWorld and fellow bankrupt manufacturer Suniva are now begging for even more government assistance, in the form of a 40-cent-per-watt tariff on solar imports and a minimum price of 78 cents (including the 40-cent tariff) a watt on solar panels made by foreign manufacturers. Without that help, a Suniva executive argued, the company would "go extinct." So basically, these companies can't compete despite all of the taxpayer dollars they've received and have petitioned the United States International Trade Commission to further punish consumers on their behalf by banning them from buying cheaper and higher-quality panels abroad.

Green energy companies aren't the only ones who think that the Trump administration will be receptive to handout requests. Shortly after West Virginia Gov. Jim Justice used a recent Trump rally to announce that he would be switching from the Democratic Party to the Republican Party, he began negotiating the price for his defection. Namely, he wants federal tax dollars thrown at the Appalachian coal industry, which is losing market share to cheaper energy sources, such as natural gas.

Gov. Justice ambitiously hopes that utilities will rake in $15 in federal subsidies for every ton of Appalachian coal burned. He'd be on much more solid ground if he simply demanded an end to subsidies for coal's green energy competitors. But in the world of politics, saving taxpayer dollars—as opposed to giving handouts to corporations and preferred industries—is never the chosen path.

Sadly, it's not just our own politicians who enjoy meddling in American energy markets. With all the hoopla regarding Russia's role in influencing the presidential election, little attention has been paid to the much more established case that Russian President Vladimir Putin has attempted to influence our energy policy.

A recent report published by the Center for Freedom and Prosperity, called "Russia's Ties to U.S. Environmentalist Groups," lays out how Putin cronies bundled millions for radical left-wing environmental groups determined to stop oil and natural gas development in the United States. As the report reads, "evidence shows that a complex network of offshore firms has intimate ties to the Kremlin and connections to U.S. based anti-fracking and anti-oil lobbies."

The fracking boom has been great for American consumers and the economy. It is also one of the main factors behind the fact that the United States' level of emissions of carbon dioxide per capita is at its lowest since 1959. That should be cause for celebration here, but not in Russia, as the country's own oil-driven economy is suffering from cheap natural gas competition. The millions funneled into domestic environmental groups represent a roundabout subsidy to Russia's own oil industry insofar as the money leads to increased resistance—through lawsuits and the spreading of misinformation aimed at producing a public groundswell calling for tighter regulations—to the oil and gas exploration of its U.S. competitors.

But it doesn't just represent government cronyism in the Russian energy market; it also represents interference in our own. Unfortunately, U.S. politicians have given up the moral high ground needed to credibly criticize Putin by so often meddling in their own energy market.

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  1. Can we put the pandering politicians on a treadmill, AND tap all of their hot air, as sources of energy?

  2. Thank you! All energy types get subsidies and it needs to stop.

    1. Your prices will also go up.

  3. You can’t talk about energy subsidies and crony capitalism without mentioning the biggest pig at the trough – nuclear.
    .
    The recently cancelled Vogtle plant in GA means taxpayers will likely be out $6.5 billion in federal loan guarantees. That’s 13 Solyndras. On top of that, taxpayers are also at risk for another $1.8 at the troubled Summer plant in SC, which will probably be cancelled in the next few months.
    .
    And that’s just the tip of the iceberg. Before these recent nuclear handouts, taxpayers had already paid out over $80 billion in nuclear subsidies according to Taxpayers for Common Sense:
    http://www.taxpayer.net/librar…..-subsidies

    1. The biggest pig is undeniably wind/solar. You didn’t even bother reading the article. Last year alone they got 11bb in subsidies. And don’t get me started on the subsidy per unit of energy let alone the regulatory costs on nuclear.

      And for the greentards out there this is not an endorsement of any subsidies, merely a statement of facts.

      1. Electric utilities are capital intensive. In order to encourage investment where the country needs it, then different gov. inducements are used for the good of everyone.

    2. Modern modular nuclear is just about here and it should be cheap. It has been used for decades in nuclear subs.

      Nuclear costs so much because we are country of scientific ignoramuses who do not understand that nuclear is safe and it is efficient and potentially inexpensive.

      Because we are nuclear deniers we impose huge regulator and environment costs on nuclear plants.

      Solar and wind is wasteful and it is destructive to our environment. After all things are factored in it is questionable how much CO2 reduction comes about using “renewables”.

  4. Robert Bryce at the Manhattan Institute writes excellent articles about the futility of wind/solar vs. fossil fuels and the ridiculous amount of subsidy it takes just to this point to keep wind/solar/alternatives in the discussion.

    Much less the futility of wind and solar as a diffused energy source.

    The obvious answer is no subsidy whatsoever for any of them and let the most economic one provide the best product to the consumer at the most competitive price. That would be oil/coal/nat gas.

    Let the tards at the universities focus their time and our money on battery technology and nothing else.

    1. Carbon based energy is sin! Don’t you know anything? Carbon is sin! So what if it’s the building block of life as we know it? It’s fucking sin! Carbon will create Hell on Earth if we keep sinning! Literally! As in the planet will perish in fire! That’s why we must subsidize green energy! To save the planet! If we don’t then everything will die in fire!

      1. Yes you are correct. CO2 warms the earth creating problems that makes life more difficult.

        1. Why is there no theory that explains how such a ridiculous proposition could be physically possible?

        2. CO2 (but mostly water vapor) keep the earth warm, and relatively constant temp, and make life possible.

    2. EIA estimates wind power density at 3W per sq. meter. Total insolation at the earth’s surface is about 700W per sq. meter. The rest is left as an exercise for the reader.

      1. Only 1% of the earth’s surface is needed to power the whole world. Saving billions in health and climate costs at a ratio very favorable to the investment.

    3. https://goo.gl/muiisk

      By investing in solar and wind we reduce costs of health. Renewable energy is the best bargain yyou will ever get.

      The researchers found that the US saved between $35 billion and $220 billion in that period because of avoided deaths, fewer sick days, and climate-change mitigation

    4. Fossil fuel is no longer the low-cost electricty source. Unsubsidized wind has overtaken nat gas and is now the clear low-cost leader. Unsubsidized utility scale solar is not far behind. The outlook for renewables in the US market and Europe is distorted from all the subsidies, but if you look at what countries in the Middle East, Asia, and South America are doing, you can get a better sense of the competitive landscape.
      .
      The best place to get the unvarnished truth on the economics of renewables is Wall Street. The investment banking firm Lazard publishes a widely respected annual survey of the cost of various generation sources that can be found by googling “Lazard Levelized Cost of Energy Analysis 10.0.”
      .
      Today, fully free market wind and solar projects around the world get financed at crazy-low interest rates because these projects have almost no risk. Unlike natural gas, the profitability of wind and solar is not dependent on future fuel costs and project owners can pre-sell future output at fixed prices using power purchase agreements to further minimize investment risk.

  5. “Between 2010 and 2013, federal subsidies for solar energy alone increased by about 500 percent, from $1.1 billion to $5.3 billion”

    400%

    1. This is true.

  6. Brother of Buford T. Justice?

  7. And then there’s those communist Iowans and their ethanol subsidies.

    1. Why limit it to just Iowa? The democratic ppls republic of MN has the most e85 pumps in the nation. And we have a state-determined social cost of carbon.

      1. 100% renewable energy skippyy will do a body good.

  8. Every time the government appears to give you something, the odds are that that is a byproduct of a much bigger deal in which the government took a lot of money from a lot of people and gave it to their pats. The ‘something’ you got is only a side-effect.

    1. Bootlegger and Baptists.

      If you don’t know what that means, google it.

  9. I’m not sure what any of this has to do with white supremacists.

    1. President Trump will come up with something in good time.

    2. Climate change causes more people to become white supremacists.

      1. As climate change disrupts societyy in more and stronger ways, people like trump will ahve a better toe hold to get into politics.

  10. Oil and gas get subsidies too. Not sure this article is unbiased but there are a lot of subsidies to go around

    https://en.wikipedia.org/wiki/Energy_subsidies

    1. Wall Street Journal article about lopsided treatment (vs. other industries) for Oil and Gas companies. L

      https://tinyurl.com/y9ubzo8b

  11. Uh, other forms of energy have been subsidized, one way or another, over the years. Subsidizing energy that can save the world from a hellish future is worth spending “other people’s money”.

  12. A recent report published by the Center for Freedom and Prosperity, called “Russia’s Ties to U.S. Environmentalist Groups,” lays out how Putin cronies bundled millions for radical left-wing environmental groups determined to stop oil and natural gas development in the United States. As the report reads, “evidence shows that a complex network of offshore firms has intimate ties to the Kremlin and connections to U.S. based anti-fracking and anti-oil lobbies.”

    Really?

  13. Is it your position that fracking in the US is good because Putin opposes it? That is rather shallow.

    We need to leave at least 80% of known fossil fuel reserves in the ground to avoid global heating disaster. We can’t be sure exactly how far we can go without causing disaster, so the wise course is to be conservative about burning them. Fracking leaks methane, so it is not a way to reduce global heating. There are only two ways: more renewable energy supply, and using less energy.

    I don’t like the dictator Putin one little bit, but surely we should cut our throats to spite him.

    When avoiding global disaster at stake, we should spend our funds without hesitation to achieve it. What good will holding on to our wealth do us, or our descendants, if they don’t have a civilization in which to use it?

  14. Is it your position that fracking in the US is good because Putin opposes it? That is rather shallow.

    We need to leave at least 80% of known fossil fuel reserves in the ground to avoid global heating disaster. We can’t be sure exactly how far we can go without causing disaster, so the wise course is to be conservative about burning them. Fracking leaks methane, so it is not a way to reduce global heating. There are only two ways: more renewable energy supply, and using less energy.

    I don’t like the dictator Putin one little bit, but surely we should cut our throats to spite him.

    When avoiding global disaster at stake, we should spend our funds without hesitation to achieve it. What good will holding on to our wealth do us, or our descendants, if they don’t have a civilization in which to use it?

  15. I think a more interesting question for libertarians is “What would you recommend if it turned out that global warming was human-caused and is a near-to-medium term threat?” Would they still recommend no collective action? Do they have a theoretical position on that, or do they simply insist that the scenario is impossible and therefor any consideration is pointless?

  16. Nevertheless, against the background of all these problems, the cost of clean energy is falling around the world. The price per kWh reaches 2 cents and continues to decline. The main role in this process was played by state subsidies. Since the 2000s, many countries have begun to introduce preferential programs for energy companies working with renewable sources. As a result, this led to lower prices for equipment and infrastructure construction. To understand the physics of processes and how such equipment works, you can go to assignment.essayshark.com/physics-help.html.
    In some countries, solar energy is cheaper than energy from coal thermal power plants, even without subsidies. According to Iberdrola, this has been achieved in countries of South America, Mexico and California. By 2025, the United States, Canada and Mexico will switch to clean energy by 50%. In the United States, network parity has already been achieved – the energy of the sun and wind in the country costs less than nuclear, coal and gas, even without government subsidies.

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