Guest Post by Willis Eschenbach
On April 18, 1977, President Jimmy Carter announced his new energy policy. His speech included the following predictions of a dire future unless we repented of our evil ways:
I know that some of you may doubt that we face real energy shortages. The 1973 gasoline lines are gone, and our homes are warm again. But our energy problem is worse tonight than it was in 1973 or a few weeks ago in the dead of winter. It is worse because more waste has occurred, and more time has passed by without our planning for the future. And it will get worse every day until we act.
The oil and natural gas we rely on for 75 percent of our energy are running out. In spite of increased effort, domestic production has been dropping steadily at about six percent a year. Imports have doubled in the last five years. Our nation’s independence of economic and political action is becoming increasingly constrained. Unless profound changes are made to lower oil consumption, we now believe that early in the 1980s the world will be demanding more oil that it can produce.
The world now uses about 60 million barrels of oil a day and demand increases each year about five percent. This means that just to stay even we need the production of a new Texas every year, an Alaskan North Slope every nine months, or a new Saudi Arabia every three years. Obviously, this cannot continue.
…
Now we have a choice. But if we wait, we will live in fear of embargoes. We could endanger our freedom as a sovereign nation to act in foreign affairs. Within ten years we would not be able to import enough oil — from any country, at any acceptable price.
If we wait, and do not act, then our factories will not be able to keep our people on the job with reduced supplies of fuel. Too few of our utilities will have switched to coal, our most abundant energy source.
…
Inflation will soar, production will go down, people will lose their jobs. Intense competition will build up among nations and among the different regions within our own country.
If we fail to act soon, we will face an economic, social and political crisis that will threaten our free institutions.
SOURCE Carter’s Speech
His conclusion was that “We must start now to develop the new, unconventional sources of energy we will rely on in the next century.” So he started throwing money at the problem. His “solution” involved inter alia:
• A “gas-guzzler” tax on automobiles
• A rebate on electric vehicles
• A gasoline tax
• Subsidies to buses
• Taxes on aviation and marine fuel
Sound familiar? It should, as these are all parts of the current war on fossil fuels.
A year and a half from now, it will be the 40th anniversary of President Carter’s prophecies of catastrophe. And it will also be the 40th anniversary of the start of the subsidization of the solar and wind power sectors. These subsidies have currently reached astounding levels. Table ES2 from the US Energy Information Agency gives the subsidies of all types (direct expenditures, tax expenditures, R&D, rural utilities subsidy) for 2013, the most recent year available. Here are the results:
In 2013, coal was subsidized about a billion dollars. Natural gas and oil, about $2.3 billion. Nuclear got about $1.7 billion. Total, about $5.0 billion dollars.
Now, how about renewables? Solar energy alone, at $5.3 billion, gets more subsidy than all the fossil fuels put together plus nuclear. And wind energy alone, the recipient of an even larger $5.9 billion dollar subsidy, also is larger than all fossil plus nuclear. In total, the renewable sector got about $15 billion dollars in subsidies, three times that of fossil fuels plus nuclear. More than two-thirds of that went to wind and solar.
And it is getting worse. Despite years of people saying that the solar and wind power were market ready and competitive and all that, in 2010 solar and wind got a total of $6.5 billion dollars in subsidies … and by 2013, the subsidies were up to $11.2 billion dollars.
$11.2
Billion.
Dollars.
Note that this $11+ billion dollar subsidy was just for 2013, and does not include the billions and billions of the past 36 years of solar and wind subsidies since Jimmy Carter. It also doesn’t include the billions upon billions of dollars that the Europeans have poured into solar and wind subsidies of all types. And importantly, it doesn’t include the subsidization of expensive renewable energy sources through “renewable energy mandates”. It also only includes US Federal Government programs, so it doesn’t include any State programs.
It also doesn’t include the implicit subsidy of renewables from the penalties imposed on fossil fuels (Carter’s gasoline taxes, “cap-and-trade” programs, the Kyoto Protocol, “carbon taxes”, and the like).
So we’re talking a playing field which has been tilted in favor of solar and wind energy by something on the order of at least a hundred billion dollars … how’s that going?
Well, yesterday I noticed that the new 2015 BP Statistical Review of World Energy had been released. So I thought I’d investigate the massive progress that the hundreds of billions of dollars of solar and wind subsidies in the US and other countries had bought us. Here’s the latest global data, read’em and weep …
Figure 1. Global consumption of all forms of energy (blue line) in millions of tonnes of oil equivalent (MTOE). SOURCE: 1.6 Mb Excel workbook
I bring all of this up for three reasons. The first is to show just how little our ~ hundred billion dollars in solar and wind subsidies has bought us. If that was supposed to be our insurance policy, it’s not only a failure, it’s a cruel joke. It’s cruel because that amount of money could provide clean water for everyone on the planet …
The second reason is to highlight the continuing failure of these “We’re all DOOOMED!! We’re running out of energy!” kind of prophecies. President Carter was neither the first nor the last of these serial failed doomcasters.
The third reason is to highlight the ludicrous nature of the claims that solar and wind are making serious inroads into the global demand for energy. They are not. Solar and wind are a rounding error. Despite almost forty years of subsidies, despite renewable mandates, despite carbon taxes, despite cap-and-trade, despite a hundred billion dollars spent on this Quixotic quest, solar and wind have barely gotten off the floor. Look at that chart, and give me a guess for how long it will take for solar and wind to catch up with fossil fuels.
Then give me a guess how long it would take if we removed all subsidies as we should.
Here’s the bottom line. It’s not just that solar and wind can’t replace fossil fuels.
It’s worse than that. Solar and wind can’t even keep up with just the increase in fossil fuels … fail. Massive fail.
As far as I’m concerned, giving one more dollar to either solar or wind subsidies is a crime against the taxpayer, as well as against the economy … after almost forty years of fruitless subsidies, they’ve had their chance and they still don’t measure up. Time to stop throwing good money after bad.
Best regards to each of you,
w.
My Usual Request: If you disagree with me or anyone, please quote the exact words you disagree with. I can defend my own words. I cannot defend someone’s interpretation of my words.
My New Request: If you think that e.g. I’m using the wrong method on the wrong dataset, please educate me and others by demonstrating the proper use of the right method on the right dataset. Simply claiming I’m wrong doesn’t advance the discussion.
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For once, it really IS worse than we thought…
Add to the gloom and doom the fact that a $20 Trillion National Debt is 20,000 BILLION DOLLARS we’ve overspent and it seems hopeless. It’s as if this administration wants to destroy this once-great country through every means possible and by golly, they’ve done it.
It’s much worse if you look at subsidies per kilowatt of energy produced.
That’s the “crux of the biscuit” (if you’re a Zappa fan).
They do want to destroy.
https://libcom.org/library/manufactured-scarcity-profits-deindustrialisation
well worth the read. normally the market economy results in the lowest prices to the consumer. However, the “green” economy turns this formula on its head by creating artificial scarcities.
Companies that realize this (Enron showed how) stand to make vast fortunes by cutting back on supply, similar to what was done by OPEC in the oil crisis. As can be seen with the current low oil prices, even a small change in supply can have a huge impact on prices. By cutting supply via “green” legislation, producers increase their profits far more than if they increase supply.
In other words, we end up with mercantilism in place of capitalism. Competition is minimized via regulation rather than maximized. Rather than a race to the bottom (lower prices to consumers) to meet demand, the green economy becomes a race to the top (higher prices to consumers) by cutting supply.
Ferd said:
“Rather than a race to the bottom (lower prices to consumers) to meet demand, the green economy becomes a race to the top (higher prices to consumers) by cutting supply.”
This is the path to “planned austerity”, is it not?
It is. We survived Cartah..I am not sure we are surviving this admin.
There was a choice: develop our own resources or keep sending money to despot nations and chase windmills.
.
Imagine if we had not sent $78.9 billion a year to the Middle East for 40 years.
Imagine if we had spent that money here.
.
Agree with you Willis.
You wrote above:
“Here’s the bottom line. It’s not just that solar and wind can’t replace fossil fuels.
It’s worse than that. Solar and wind can’t even keep up with just the increase in fossil fuels … fail.
Massive fail.”
We wrote in 2002 during our debate with the Pembina Institute, when we opposed the Kyoto Accord.:
“The ultimate agenda of pro-Kyoto advocates is to eliminate fossil fuels, but this would result in a catastrophic shortfall in global energy supply – the wasteful, inefficient energy solutions proposed by Kyoto advocates simply cannot replace fossil fuels.”
We also wrote in the same debate:
“Climate science does not support the theory of catastrophic human-made global warming – the alleged warming crisis does not exist.”
All of our 2002 predictions have now materialized except one. Our sole remaining prediction from 2002 is for global cooling to commence by 2020-2030. We now think cooling may be apparent by 2020 or sooner.
Bundle up!
Regards, Allan
Don’t forget aside from all that you mentioned Carter started that bureaucratic nightmare money hole known as the Department of Engery.
There really is an engery crisis and maybe trash can solve it:
Could Trash Solve the Engery Crisis?
http://abcnews.go.com/Technology/AheadoftheCurve/story?id=7422453&page=1
The 1970s called, they want their headline back.
There is no energy crisis, and people have been burning trash forever.
Trash-to-energy was a cornerstone of the Syn-Fuels Corp, and a HUGE debacle.
See below as KevinK takes us on a walk down memory lane to revisit the Syn-Fuels mess and, especially, MEOW.
Een if Obama really believes that fossil fuels must go, his chosen replacements (renewables) are a bad joke. Obama is just stupid. Really stupid. Molten salt reactors are the future and every energy expert with a brain knows it. The Chinese govt just announced a new crash program to commercialize the technology within a period half that they previously wanted. American companies Transatomic Power and Terrestrial Energy are both nor very far away from commercialization – probably less than 7 years. And Transatomic Power’s funding comes from private investors and is in the few millions of dollars. What a missed opportunity from our lop-eared lop-sided President.
Want to see how well “Renewables”really perform?South Australia,has lots of bird mincers and last week had a major power black-out,caused by an “Inter-connector”from Victoria failing.South Australia relies on their power coming from Victoria when it is needed,because their “Bird Choppers”can’t seem to cope very well.
Oh yes, I loved that.
http://www.abc.net.au/news/2015-11-02/electricity-interconnector-fails-power-blackouts-south-australia/6904062
And Victoria’s electricity is generated at places like Loy-Yang with brown coal. Brown coal. 🙂
All those sanctimonious crow-eaters think they are holier than us. No wonder industry is leaving South Australia as fast as it can find the back door.
Green left governments. Vote for them and you get a lesson in stupidity.
and theyre shutting pt augusta down?
how clever…
wonder what pollies got shares in a candle company?
The chart provided by Willis (Thanks, W.), herein called Figure 1, shows red and a green lines supported by various investors (amount unknown) and tax payers (known amount ~~hundred billion dollars).
For your suggested alternative you seem to agree with the statement there will be commercialization in “probably less than 7 years.” Is that from one of the companies? Let’s assume the output of this source will be plotted along with the 3 existing lines, maybe in the color orange.
Can you give an idea of what this orange line will look like (beginning whenever the 7 years is over) after 5, 10, and 20 years. With great luck and good doctors, I may still be around to check your guesstimate. I’ll give a WAG that the orange curve will not have surpassed the green or red ones.
And I’m an optimist.
Good one Willis!!! I was wondering what you were working on…
Willis – Thank you. One component you left out of the analysis. Corporate income taxes paid. Exxon/Mobil is the largest taxpayer in the US. In 2013, Exxon paid $31 billion in taxes. Chevron was #2 at $20 billion. ConocoPhillips was #7 at $7.9 billion. Needless to say, no solar or wind company was anywhere need the top of the list.
I wonder what the taxes-minus-subsidies numbers would look like. #B^)
The “subsidies” to the oil companies are just lower taxes in some form. It is kind of like saying a mugger gave you something when they only took half of your cash.
The “subsidies” of oil companies are nothing more than depreciation allowances. Similar to the depreciation allowances every other company in the country gets.
BTW, every other business expense gets deducted in the year in which it occurred. Depreciation requires that these business expenses get deducted over a number of years, which actually costs the companies compared to being able to deduct it immediately.
So declaring that depreciation is a subsidy is a double lie.
leon,
Good point. After income tax, the oil and gas industry are the greatest contributors to the US Treasury.
Does anyone in their right mind think that subsidized renewables will fill this void once the fossil fuel industry is put out of business?
These people are insane.
but fuel is not fossil
They are too full of themselves to understand concepts like money going from A to B and money going from B to A.
Subsidiesology (the science of subsidies) makes climatology looks good, almost hard science.
I suggest that we pay these people with “subsidies”, this goes like that:
– Hello Mr UN Greeny. I have news for you that will please you. Let’s say you give me 10,000 $.
– Why would I –
– Never mind. We imagine. We suppose you give me –
– But I really don’t want to gi-
– Shut up. I talk. You give me money, and then you actually don’t.
– So nothing really hap-
– Really. Shut up. I have just given you 10,000 $…
– You didn’t do –
– No. Shut up. I make the rules now. I allowed you to not give me 10,000 $. It’s a subsidy.
– But I wasn’t giving you any-
– Shut up. I just imagined you did that. In my mind, you really were giving me money. And then I refused to take your money! So now you are richer.
– But I have exactly as much…
– You don’t get it. Are you really qualified as an expert in – what is your field, again?
– The illegitimate ways government helps established energy prod-
– OK whatever, that sound boring and I don’t care. You would have given me 10,000 $ –
– But I never wanted to-
– I have never said you wanted to, but you might have.
– I would never give you money for no reason…
– You would have, believe me. It doesn’t matter anyway cause I give you back the money. It’s a gift.
– But this is my money I have given you, no, the money I never ga-
– You would have. Now I give it back to you. Be happy!
– But I don’t have more money than previously-
– You don’t get it. You are richer over possibility.
– I don’t feel richer…
– In an alternate reality there is a poorer you. You have 10,000 $ more than this guy.
– That isn’t very comforting.
– You have received a subsidy. You should thank me.
– All right, thank you, now when will I get my salary?
– You don’t. That’s the idea. You get subsidised. Why you also want a salary? Are you greddy?
– Well I don’t-
– And anyway your work is useless.
Simple-touriste-LOL
I suggest that you should take the current subsidies and print the amount in 1$ bills and burn the money as fuel for a power plant. Truly green energy and probably as efficient.
taz
Quite a lot!
didn’t spit wine on my monitor – quite!
Excellent.
Auto
Simple-t, that was a classic gleason/ Carney skit if I ever heard one.
Taz, they’re already printing money as fast as possible…
I also am curious how subsidies to fossil fuel were calculated by Willis.
We need to know two things IMV. Net taxes paid after so called subsidies, tax breaks whatever. ( Within Net taxes paid include state and Fed gasoline taxes, as well as industry employees state and Fed taxes paid ) Second we need to know how much energy was produced.
Bottom line, conventional energy producers pay X into the system for every unit of energy, and solar and wind leach X from the system.
Add to that the cost increase solar and wind impose on ALL energy production, and we have a problem.
Another +5 for you, Willis.
(And a proper directionalization of the old angrified blood.)
You have to subtract points for his repeating the lie that oil companies are being subsidized.
On a related note,
http://bishophill.squarespace.com/blog/2015/11/5/omg-moment.html
On a related note,
http://bishophill.squarespace.com/blog/2015/11/5/omg-moment.html
I’m a Limey, living in Limeyland. I’m pretty pi**ed about the way that our politicians are berating all of us about AGW. The winter hasn’t even begun yet, but yesterday we were warned that power cuts were possible. Why? Because we have shut down a number of coal-fired power plants(AGW mitigation), and the weather, the English weather, was preventing all of our green energy provisions from providing the energy we had all been told that they would provide. It was foggy(so not much from our hugely expensive solar provision), and it was still(no wind. No wind, No turbine power). It’s not even cold yet, so thankfully we didn’t need the energy as much as we certainly will when the winter arrives. It will happen; this winter, power cuts in the world’s fifth largest economy! Why? Blind ignorance and panic, from politicians with not an ounce of sense between them. Not one with his/her own brain, all of them entranced by the AGW religion. It’s gonna be a tough winter!
You may have to build a lot of guillotines come spring !! ;o)
No need with tip speeds of around 200mph, the spinning crucifixes of the New Religion will work just fine.
Ask any big raptor.
To John Robertson….good point !! LOL…
To John Robertson. How high would the platforms have to be?
Well they ARE planning for those power cuts…..with backup diesel generators:
http://www.dailymail.co.uk/news/article-2362762/The-dirty-secret-Britains-power-madness-Polluting-diesel-generators-built-secret-foreign-companies-kick-theres-wind-turbines–insane-true-eco-scandals.html
I thought you folks were saving the planet by cutting down forests in North Carolina and shipping the wood chips to England to burn greenly in your converted coal plants. We’re the ships delayed or something? (It’s a shame Lewis Carroll isn’t around to treat us to a few paragraphs of parody of this whackiness).
I note that no one has said much about biofuels in this discussion. Probably a good thing. There may be a rock somewhere a long way from any other energy source where growing stuff, processing it, then burning the product for heat and or electricity pencils out. But I doubt there are many such rocks. Corn ethanol has proven to be a complete fiasco (subsidies there also) and I don’t think biodiesel is that far behind on the debacle scale. Burning used cooking oil in diesel engines works I’m told, and if so, it seems a fine idea. But even Americans can produce only so many liters (gallons to those of us who dwell here) of used cooking oil a year.
Um, as an American, I’m doing my best to keep up with the used cooking oil supply.
And I’m reminded of a local (now retired cartoonist who know one will know) Jake Vest (paraphrased) there are only 2 things in food that have any flavor: fat and hot sauce. Less of one you need more of the other.
You have the EU for coming up with that scheme.Just the “Transportation”alone,would produce more CO2 than using coal.
anyone worked out the nasty bunker fuel expelled by the woodchipships?
🙂
For clarification would you provide your definition of subsidize?
Thanks, mkelly. The definitions are in the cited data source document and in Table ES2.
w.
Hey, I thought a subsidy was money that you don’t actually pay to government (or in government-mandated costs) that special interest activists think you should be paying. Isn’t that the correct, progressive definition?
The table Willis linked to does include tax breaks as a subsidy, indeed this constitutes the vast majority of conventional power generation so called subsidies. In reality conventional receives almost zero subsidies.
In fact, not included in subsidies to solar and wind is the higher rate all consumers pay on ALL energy because solar and wind get first priority while conventional has to ramp down during high solar or wind production, and ramp up when the wind does not blow and the sun does not shine. Tbis, in conjunction with higher upfront costs for wind and solar, causes electricity prices to “skyrocket”.
Also not included in the subsidies is the increase in the cost of every product brought to market.
It us worse, much worse then we thought.
Willis, I thought you were big on checking sources and not repeating stuff just because someone authoritative declared it?
MarkW November 7, 2015 at 8:06 am
Thanks, Mark. I’ve used hundreds of sources in my posts, and no less than four cited sources in this post. So I have no idea which “sources” you are referring to, because you ignored the following request I made in the head post:
Next, if you think that I’m using the wrong data, please repeat the analysis using the figures of your choice so we can see what difference it makes. You’ve ignored the second of my requests above, viz:
Best regards, I await the analysis with your chosen data.
w.
The 1976 PNE prize home was called the Energy Conservation home.
http://files.channel9.msdn.com/avatar/c49b631c-f4ef-4134-97c2-79dc039e3d05.jpg
The 2015 version was all about Sustainability.
Let’s take it back to the old school. MIT Solar House 1939.
http://web.mit.edu/solardecathlon/solar1.html
Energy’s Building Technology Program as a “Milestone Building of the 20th Century”.
leads to… 404 (Page Not Found) Error
So bucky fuller is just chopped liver?
No, it’s past time to stop throwing any of our money at anything. The people doing the throwing, as enabled by the people doing the voting, are all just a gang of thieves.
A classic example of the Gell-Mann reading the newspaper effect.
I object to the concept of “renewable energy”.
I personally like ”nearly perpetual energy”, which of course can come from only one source: the ”Great Fusion Reactor” in the sky. #Sol#
From her fiery demeanor, comes the wind, the wave. From the oceans’ heated surface, comes water vapor, which dutifully condenses to rain and snow in the high mountains. Entrained and corralled, it generates copious power and waters our parched fields. Some cuckoos have felt opportunity in putting up grand windmills to tap the Sun’s windy zephyrs. All’s well until the weather’s good, or bad. Then it all goes to poo.
Solar – of any ‘direct’ type (PV, ST, you name it) is our one and only perpetual energy source. At least on human timescales. It would be well to tap it – especially if #and when# we find a way to contour civilization’s demand for her powerful rays to match when they’re available. Or store the stuff someway practically. But we also must not expect #too# much from Ol’ Sol.
Ra takes a good slumber every evening, putting out the fire to have a nice nap. This – to me – is where the #other# near-perpetual energy sources come into play. Yep, #hydro# is good – if there’s opportunity ~and sufficiency~ to make use of it. But so’s #nuclear# and of somewhat more rare provenance, Zephyr power. They’re quite good, along with other (ultimately) sun-driven reservoirs. But really, in the end … we should just quit wasting (“perpetually investing”) money in research that goes essentially nowhere, and tap more of what’s coming down ”for free” every minute of the year. Concentrate the investment into finding ways to losslessly (and inexpensively) transmit the power ’round the world’, and even direct-solar becomes compelling.
Perpetual power.
Sol.
(And yes, I fully expect to be dissed mercilessly. Yet it remains: even #coal# is most probably stored #Sol# power, from millions of years ago. Perpetual!!!)
And I object. Again.
The energy coming from the Great Fusion Reactor can be labelled “nearly perpetual” or “free” or “fatal” or “no faster depletion” energy, but these labels apply to the solar rays only.
The “tapped” energy (heat in a fluid or electric current) depends on tapping system: a collecting device exposed to the insults of nature, plus a (usually expensive) converting device. The making, monitoring, cleaning, and repairing of these devices require materials, energy and workers. The building or mining of materials require energy and materials, etc. (I don’t want to back to the bronze age, but I guess morally I could.)
Not only all these transformations used “fossil fuels”, they also involve other irreversible transformations of the environment. Of course, none of these has any impact on the depletion rate of the Great Fusion Reactor (but burning fuel (fossil or “biomass” ie “renewable carbon”) could theoretically impact transparency of the atmosphere or cloud formation and the amount of light arriving on the surface), justifying the “renewable” label.
I can’t decide if the ecoloons are getting that when they exclude (or put appart) “big hydro” from “renewables”. Dams can have a large impact on the local fauna, on the dynamic of sand, of the distribution of heavy metals naturally transported by rivers, etc. (I am not mentioning the million people displaced by Three Rivers because ecoloons don’t care about people, except as PR expandable tools.)
The impact of large dams is hard to ignore. They are big objects. (It’s easier to ignore many small objects or events even if their cumulative effect is much larger.)
So they don’t ignore these effects, which apparently cancels the “renewable” label. But the logic behind this is never explained: knowing that big dams are “bad” isn’t useful, we need to know what is and isn’t “bad”. There is no “approved” bad renewables vs. good renewables scale.
I can’t disagree, Willis, particularly with Figure 1 staring me in the face.
Just to update your data – the cost of the clean water is $24.6 billion according to WHO. Thanks for the reminder, by the way. The challenge is that the beneficiaries of the wind and solar are rent-seekers and politicians and the beneficiaries of the clean water are poor people, (and some rent-seekers in foreign lands). Here is the link to the WHO estimates: http://www.who.int/water_sanitation_health/wsh0404summary/en/
Per annum.
coal was subsidized about a billion dollars. Natural gas and oil, about $2.3 billion.
***************************
iirc most of this includes physical/plant depreciation which many people like to count as a subsidy even though its same tax writeoff every company can use.
I, too, would like to see a breakdown of so-called oil, gas, coal and nuclear subsidies. If they include the depletion allowance which is, as dmacleo points out, the equivalent the capital depreciation allowance every business in America enjoys, it should not be classified as a subsidy comparable to the investment tax credits and souped up, five-year-accelerated-depreciation that renewable energy projects enjoy.
One other thing that is often inappropriately cited as a subsidy for oil is allowing companies to write off unrecoverable costs of drilling, such as chemicals, mud, labor, fuel, etc., in the year in which they are incurred rather than amortizing the losses over a longer period of time.
The problem with the non-tax=subsidies approach is that there is no objective, common, consensual or scientific approach to taxing. The level of tax is the result of economic simulation, economic experiments, culture, history, politics dynamics, and bargaining (or lobbying or bribes, it doesn’t matter here).
Tax law is so complex even experts can get it wrong or disagree. Every country has different rules. The same business paying the exact same amount could be subsidies in one country and hyper-taxed in another.
In France, diesel is less taxed than gasoline because Peugeot Citroën’s president managed to convince François Mitterrand that it was a good thing to favor diesel compared to gasoline (and favoritism is not the same as subsidisation, even according to the non-tax definition). This is history.
In France, home heating fuel “fioul” is called “the red”, cause it’s red. It’s home fuel. It isn’t car fuel, cause it’s red. “Gasoil” (car fuel) is more expensive, cause not red. See the logic? So red means not for public road. So non-red means you paid for the road (of course the taxes raised on car fuel are several times the money spent on roads, and that amount is getting smaller), and this isn’t a carbon or pollution tax.
What about electric cars? They use “red” electricity (normally taxed home electricity). Legally. No road tax.
So existing French tax system has no consistency what-so-ever. (I bet you could make similar points in most developed countries.) You could choose any baseline and observe either more and less taxes.
There is no agreement on the correct, moral, or optimal level of taxes.
Willis left a link,and it does include tax breaks, which are the vast majority of the so called subsidies to conventional.
Hell, they usually include the discounts given to elderly, disabled and poor people to help them with their energy costs. You can bet your sweet patootie that capital plant depreciation allowances, asset depletion allowances and any other kind of normal extractive/industrial allowance is written up as a subsidy.
You can also guarantee they never deduct the taxes raised on oil, gas, coal, petrol and diesel from their concept of fossil fuel subsidies.
The lies are just immense and continuing which is one indicator as to why you can be certain this whole thing, AGW, is nonsense.
From Willis’ reference: “Tax expenditures. These are largely provisions found in the Internal Revenue Code (IRC, or Tax Code)—Title 26 of the United States Code—that reduce the tax liability of firms or individuals who take specified actions that affect energy production, distribution, transmission, consumption, or conservation.”
These amounted to about 4 billion total for all non-renewable in 2013. The trade off for Exxon’s 30 billion paid taxes and 4 billion is a good deal.
Note in the reference that of renewables total electricity produced of 13.1% in 2013, hydro was over half that total. Greens want more renewables but want to get rid of dams.
I paid about 30% of my income in taxes last year. By the logic of some, that means that the govt subsidized me by 70%.
for some reason didn’t see the link to ES2 table yesterday, at a quick look (I am sick so please forgive mistakes) seems they are including the tax writeoffs (basically non-direct subsidies) as the same as the direct subsidies green energies gets.
but I may be wrong everything pretty blurry today
I’m glad to see the BP data is coming out. EIA through several years ago is just not current enough to be useful in thinking about today, much less tomorrow. I’m exploring the energy (electricity) demand to support Big Data and the Internet of Everything as information moves to the Clouds (including TV, medicine, autonomous transportation …).
Your graph, (Figure 1), clearly illustrates the chasm between that supply and demand and shows the monumental discrepancy between the reality and the absurd and ignorant notion that all this can work with renewables. Thanks.
I sincerely feel for our European neighbors with so much solar and wind shoved onto them in addition to shuttering power plants and their strangely growing population.
This is the best commentary against the push for solar and wind I’ve seen….they needed to take that 100 billion and invested it into something usefull like how to get the energy out of the atom.
Well spoken Willis.
@Willis: Are the subsidies to coal, oil & gas really to keep them in business or are they tax break incentives to move their business one place or another? I can’t figure out how anyone could justify an actual subsidy for an industry that doesn’t need them. I feel like the DOE might be calling everything a subsidy to cover up the essential difference between industries.
I don’t disagree exactly, but would back the point in time up to April 7, 1977, when President Carter decided, on behalf of us all without Congressional debate, that the United States would never recycle/reprocess nuclear waste. This required more mining for uranium, and afforded less recovery of the plutonium already being made in old-style reactors, and foreclosed the design of “breeder” reactors. In short, we had a working technology (uranium), a stepping stone ahead (waste recovery) and a path forward, (breeders) and Carter closed the door.
Ah Yes, the old “Moral Equivalent of War” speech. I remember it well, as a younger lad I believed it. I even worked a co-op stint in college at a “solar energy lab” (said lab is still subsidized and has never made a profit on anything in 4 decades).
It was also called the “MEOW” speech (Moral Equivalent Of War). And in hindsight (always the clearest vision available) it was just a silly meow after all. And what exactly is the “Exit Strategy” in this “War” ? Do we declare victory when nobody has any energy at any price ? That seems very unpleasant what with cold houses, little food and no water (hot or cold).
Oh, and you forgot the “Syn-Fuels” debacle, a few odd billions flushed on that.
Heck, the major oil companies have decided they can slow down the drilling for a while until prices come back up a bit (Shell pulling out of the Arctic).
My hometown had a “perpetual flame” (fueled with natural gas) to commemorate the sons of the town that died fighting for the USA. That had to be turned off in the 1970’s because “We’re running out of natural gas”. Now we can hardly get rid of the NG fast enough.
And just a question for everybody; How much energy could the US Department of Energy produce if it actually produced energy instead of hot air ???
Cheers, KevinK.
They are tax breaks, a reduction In the billions they Do pay.
If they’re so successful, why do these technologies need subsidies at all? There’s an easy $5B saving removing those subsidies right there.
Their subsidies come in the form of depletion allowance and depreciation which are forms of capital recovery. Capital recovery in one form or another is allowed every business. The subsidies allowed for renewables come in the form of tax credits and highly accelerated depreciation which gives them the feel and odor of tax-loopholes.
So to understand the numbers properly we need to take account of the normal tax rules that are applicable to every business. Not only that, plenty of businesses are given additional tax breaks for various reasons. Take some of the primary industries for example. As I understand it, the US sugar industry is heavily subsidised too. Or at least it used to be…I haven’t looked recently.
Sugar is subsidized by making it illegal to import sugar below a certain price. Thus guaranteeing an above market price for US grown sugar.
It’s easy to see from that graph why “Big Oil” is so eagerly trying to resist the competition that it is experiencing from the spectacular rise of solar and wind energy provision.
Wind and solar must be really carving a huge chunk out of their market share.
If I was “Big Oil” then I’d be looking at that graph and screaming, “O..M..G, we’ve gotta do something about this, before wind and solar shut us down for good. Let’s bribe some internet bloggers to create a fog of doubt surrounded key facts concerning the consensus on global warming”…
(Bigtime sarc.)
I must make a couple of observations here.
Solar energy in particular is a viable energy source, particularly for space heating and domestic hot water.
That being said, virtually all of the money thrown at the situation has/is going into active solutions that depend on conventional sources for backup or operating energy. The idea that you must put a meter on it and charge someone for its use is a killer because of the intermittent nature of the source. Passive solar for space heating and DHW works just fine whether there is a person monitoring it or any electricity at all. Putting a meter on the sun or wind is just not going to work.
What you are saying is that solar is an end user energy source. But, it can never support industry or a grid with any reliability. It can be used in passive heating of buildings (homes) and end user electricity to lower electricity bills, but by no means is the house independent of the grid unless the homeowner only uses electricity when the sun is shining. The stupid idea that wind and solar could run the electrical grid is just stupid and is a claim aimed to dupe the unthinking public into supporting this grandiose idiotic fantasy.
One proviso, before determining if solar heating is viable, you have to look at the local climate. In Miami, it’s viable pretty much all year round. In Montana, much less so. As you get further north, eventually you reach the point where the amount of energy you gain from such a system is not enough to justify the cost of building it.
Willis, very nice post. The rationale for subsidies to renewablea is long since past.
Well done Willis, it is the sheer waste of money and poor use of resources to chase a pipe dream that drive me wild.
Why can’t they take away the subsidies and offer 5 million dollar prizes for best energy designs or support research into existing technology to create cars that flies above ground,thus doing away with roads.
They could just use the subsidy to build at least ONE viable Thorium reactor and ONE Aneutronic Fusion reactor.
Sunsettommy, the US has already demonstrated a viable reactor primed with Thorium , some 50 years ago.
When this topic came up again a few days ago I looked it up in Wiki and , whilst the physics is a bit light the section on background and history is very revealing . Let me quote just the start of it :
-“After World War II, uranium-based nuclear reactors were built to produce electricity. These were similar to the reactor designs that produced material for nuclear weapons. During that period, the government of the United States also built an experimental molten salt reactor using U-233 fuel, the fissile material created by bombarding thorium with neutrons. The reactor, built at Oak Ridge National Laboratory, operated critical for roughly 15000 hours from 1965 to 1969. In 1968, Nobel laureate and discoverer of Plutonium, Glenn Seaborg, publicly announced to the Atomic Energy Commission, of which he was chairman, that the thorium-based reactor had been successfully developed and tested:
“So far the molten-salt reactor experiment has operated successfully and has earned a reputation for reliability. I think that some day the world will have commercial power reactors of both the uranium-plutonium and the thorium-uranium fuel cycle type.[7]”
In 1973, however, the U.S. government shut down all thorium-related nuclear research—which had by then been ongoing for approximately twenty years at Oak Ridge National Laboratory. The reasons were that uranium breeder reactors were more efficient, the research was proven, and byproducts could be used to make nuclear weapons. In Moir and Teller’s opinion, the decision to stop development of thorium reactors, at least as a backup option, “was an excusable mistake.”[4]” –
There is more of interest in the rest of the article , including a list of nations experimenting with this type of reactor- including , incredibly, UK – but I have yet to check that unlikely assertion.
Thorium in a conventional fuel rod reactor sounds more practical than the molten salt experiment. The MSR is fine until you examine ways of reprocessing the waste. It is a chemistry nightmare and unlikely to be solved using existing technology.
I like the idea of a prize for tech inovation. Look at the progress with space launches such as Spaceship One.