Politicians Can't Get Enough Energy Cronyism

From Reason

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

Veronique de Rugy | August 17, 2017

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.

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73 thoughts on “Politicians Can't Get Enough Energy Cronyism

  1. A comment that works for Australia.
    Domestic energy prices showed increases above the inflation rate for the last 10 years. We are now in a 10-20% in one year increase, with a similar hockey stick jump being talked about for next year.
    Some consumers do not think that government policies, imposts and zealotry have much to do with this. I suggest that the look at their domestic water supply bills, which are now showing hefty rises as well. I suggest that the common factor is government interventions that distort the free market.
    Does this work in other countries, or are there fundamental differences?

    • I understood that energy price increase was because of excessive investment in infrastructure, including fossil fuel plant, to meet forecast demand which never materialised?

      • that would be water prices you are talking about there. the desal plants are not being used, cost money to mothball, cost money to build (in the billions)
        more billions wasted in the global warming scam. where is the money from the REC/RET/LRET etc eg the news story above is the sunshine coast who recently put in place a solar power plant that is supposed to pay itself off. yeah right! so many lies from the renewable sector. the only way they ‘pay off’ or save money is by not having to buy the LRET LGC certificates.-
        “Since January 2011 the RET scheme has operated in two parts—the Small-scale Renewable Energy Scheme (SRES) and the Large-scale Renewable Energy Target (LRET).
        The LRET creates a financial incentive for the establishment or expansion of renewable energy power stations, such as wind and solar farms or hydro-electric power stations. It does this by legislating demand for Large-scale Generation Certificates (LGCs). One LGC can be created for each megawatt-hour of eligible renewable electricity produced by an accredited renewable power station. LGCs can be sold to entities (mainly electricity retailers) who surrender them annually to the Clean Energy Regulator to demonstrate their compliance with the RET scheme’s annual targets. The revenue earned by the power station for the sale of LGCs is additional to that received for the sale of the electricity generated.
        The LRET includes legislated annual targets which will require significant investment in new renewable energy generation capacity in coming years. The large-scale targets ramp up until 2020 when the target will be 33,000 gigawatt-hours of renewable electricity generation.”
        straight out subsidy of an inappropriate technology by government edict in the name of the climate gods.
        where is the fossil fuel subsidy? there is NONE in this country. tax breaks are not subsidies if the tax should never have existed in the first place, they just are NOT. fossil fuels are taxed so heavily we pay through the roof for everything related to them, even coal and gas where the state governments have their fingers in the pie not once through royalties, or twice through company tax, but thrice through GST!!! wtf they tax us to the ground, and green zealots like to say fossil fuels are subsidised…

      • Griff, have you stopped taking your medication?
        Remember they help stop the delusions and hallucinations.

      • “Griff August 18, 2017 at 6:09 am
        I understood that energy price increase was because of excessive investment in infrastructure, including fossil fuel plant, to meet forecast demand which never materialised?”

        When have you ever actually “considered” or “thought” about the facts?
        You’ve been and still are a conduit for falsehoods and propaganda.
        Consider: Two different electricity generation are constructed.
        • One requires vast tracts of land, is extremely inefficient and rarely operates at full capacity.
        The renewable electricity it does produce is poor quality, unsuitable for all industrial or precision processing needs. Just inquire about the aluminum smelter plant in Australia.
        Plus it is heavily subsidized by parasitizing tax payers.
        • Fossil fuel electricity generation, along with nuclear and hydroelectric generation is extremely efficient, runs at 85%+ easily producing high quality consistent amperage, consistent voltage, stable frequency electricity that all facets of civilization and industry utilize.
        Your many previous specious claims that fossil fuels are subsidized has repeatedly proven false.
        Of the two forms of electricity generation, that unreliable inconsistent poor quality renewable junk generation is always secondary to cheaper efficient high quality energy producers.
        Only ‘special’ delusional adolescents ignore efficient real estate usage, overall cost efficiencies, quality electricity when customers need it, common realities e.g. CO₂’s greening of the Earth and increased farm yields.

      • of course a green market energy analyst is the person best to quote for the abc, oh and why not throw in Energy Networks, a not for profit company that advises the distribution like how well they did with the gas here.. oh my god, these people are a battery/solar advocacy group that somehow are allowed to advise on distribution. but then it clicks into place when you see the ceo is none other than John Bradley (also quoted in that abc piece) the guy who was in charge of planning and creating those mothballed desal plants.
        it is the same people all the time. why are they given power to spend tax dollars so freely? where is their accountability? they twist and manipulate markets with the backing of government and seem to be allowed to get away with it when is fails so badly, this country is in a crisis of energy security for no other reason than the few that decided it would be a good thing to only use renewables.
        the abc should take their blinkers off and look at the realities of energy security and the people destroying it deliberately.

      • “mobihci August 18, 2017 at 6:25 pm”
        Exactly. Griff likes to post links to biased reporting sites like the ABC here in Australia with little understanding of the situation here.

      • “I understood…
        No you didn’t, Skanky, you’re just making stuff again.
        You understand SFA about climate science or energy supply – and even less about polar bears.
        Have you apologised to Dr. Crockford for lying about her professional qualifications witth the intention of discrediting her research yet?
        Don’t you think you ought to?

    • “I suggest that the look at their domestic water supply bills, which are now showing hefty rises as well. I suggest that the common factor is government interventions that distort the free market.”
      Not so much as government interventions but not selling enough water which leads to decrease in sewer rate revenue. At least that what our water board said.

  2. Follow the money… and at the end, isn’t a pot of gold, but a table of politicians waiting for lunch…

    • Because the UK govt is trying to move to a low CO2 energy industry.
      I note that 33% of UK electricity was coming from wind/solar earlier today. guess it must be working.

      • There’s nothing low CO2 about wind, solar, tidal, wave and biomass. Only nuclear will cut the mustard, and successive UK governments have made a complete horlicks of the nuclear industry and capability in the UK. Not that we need a low CO2 energy industry. Co2 is good for the planet.

      • James, cold windless nights are indeed a challenge if you want to go 100% renewable… which is not yet a UK target (80% renewable electricity by 2050). I’m sure someone will solve it… power to gas, with gas stored in the existing grid perhaps. 2 experiments going on with pumping hydrogen into UK gas grid…
        But most nights are NOT both cold and windless. 10 a winter, possibly.

      • I am sure you would think it was a great benefit if your lights in your house worked a whole 33% of the time… each time like spinning the roulette wheel. Better yet I am sure you would love it if you went to the hospital and the lights were on and equipment working 33% of the time… now that is reliability and dependability right there! /sarc sort of

      • Been out in the midday sun too long giffiepoo?
        Trying to use solar as a generating power source for unused neurons?
        This morning, England received 20% of their electricity from wind. That 20% was an inefficient 45% capacity usage.
        So many hectares of land wasted.
        So much equipment wasted.
        So many pounds sterling wasted.
        At the same time, England received 15% of their electricity from solar; producing only 58% of installed capacity.
        It is curious that so much solar electricity is generated so early in England’s morning hours.
        The first consideration is that solar numbers are mostly estimates based on private solar installations. An odd assumption since many solar installations are simple water heating installations.
        One also suspects that standby diesel generators are running to fill the gap.
        Making their CO₂ emission claims utter falsehoods.
        Not a surprise. Wind and solar electricity generation are falsehoods layered upon falsehoods.
        All parasitic wealth drains upon ordinary citizens to ensure crony bureaucrats are richer.

      • But all you need is to have a couple of those 10 a year fall back to back and involve heavily clouded and windless days between them and VOILA the populace will begin to freeze to death

  3. The statement that “Russia’s oil-driven economy is disrupted by cheap natural gas” is not likely. Oil does not compete with natural gas to any significant degree. The days of an oil-fired power generator are over.
    There may be some competition within the industrial sector.
    As for subsidies for “all power producers,” I’m still waiting for any to be aimed at the best power producer we have – nuclear power. Far from subsidies, the Feds had been collecting something like half a cent per kWhr from nuclear producers to pay for “waste disposal” until disallowed by a Federal judge and the billions collected ordered returned to the nuclear plant owners. The amount was not being used and, what’s worse, was way more than would be required for nuclear waste disposal. If anyone in the Federal Energy Dept had any sense, they would be putting all those wastes into small concrete casks (which radiate 350 degree heat), deploy them in Death Valley and begin massive desalinization of sea water from the Pacific – this would probably be enough so that Southwestern U.S. droughts , which are inimical to that region, would no longer threaten the area. What a massive economic positive for our country that would be.

      • Not until the renewable energy weasels leave the rest of us alone. Nothing is sacred at this point.

    • Russia is the biggest supplier of natural gas to Western Europe. The threat of Cheap LNG from the U.S. has already capped the price of Russian natural gas.

    • In order to push green energy, Obama killed the project developed by engineers and scientist to safely store nuclear waste in Yucca. This was a devious way to kill Nuclear. Lets hope Trump can correct this egregious politically motivated error.
      Understand that the Trump administration may rectify this error.
      White House proposes reviving Yucca Mountain nuclear waste site
      Timothy Gardner
      3 MIN READ
      “WASHINGTON (Reuters) – The White House’s 2018 budget plan for the U.S. Department of Energy includes $120 million for nuclear waste programs including the restart of licensing for Nevada’s Yucca Mountain, a project stalled for years by lawsuits and local opposition.
      The move signals that President Donald Trump may consider that nuclear waste solutions could extend the lives of existing U.S. nuclear power plants and speed up innovations in next- generation nuclear plants that backers say are safer than previous reactors.
      Congress will debate the budget and it is uncertain whether funds for waste will remain in the plan.
      While Yucca Mountain would store waste on a practically permanent basis, the budget money would also support programs for storing waste at interim sites before Yucca opens.
      “These investments would accelerate progress on fulfilling the federal government’s obligations to address nuclear waste, enhance national security, and reduce future taxpayer burden,” according to a summary of the budget.
      Yucca has been studied by the U.S. government since the 1970s as a potential repository for the nation’s radioactive waste and billions of dollars have been spent on it.
      But Yucca has never opened because of legal challenges and widespread opposition from local politicians, environmentalists and Native American groups.
      In 2010, then-President Barack Obama withdrew the license to store waste at Yucca amid opposition from then-Senate Majority Leader Harry Reid, a fellow Democrat from Nevada.
      Maria Korsnick, the head of the Nuclear Energy Institute industry group, said the industry was encouraged by the plan for waste projects but that nuclear energy innovators were “nervous” about cuts to programs that have supported public-private partnerships to bring new nuclear technologies to market.
      The budget eliminates funding for the Advanced Research Projects Agency for Energy and an innovative technology loan guarantee program that have been popular with both Democrats and many Republicans.”

      • Man has learned to generate Fission without the radioactive waste, but Carter killed it.
        Start with this story.
        http://www.jimstonefreelance.com/busted.htmlJim Stone, Updated on July 22, 2013 – “During my journey of discovery in my investigation into the Fukushima disaster, I interviewed an 85 year old nuclear engineer who worked in the nuclear industry during America’s glory days, an engineer who earned GE over 100 patents. He was one of the engineers who designed Fukushima, so naturally when conducting an investigation into such a disaster a journalist would want that type of reference.
        When I started to think I was going to walk away with nothing new, he began to talk about an entirely different subject. He began his new direction in the discussion with the phrase “My team succeeded in closing the nuclear loop, and Carter banned our miracle with an executive order.
        We perfected the second reactor design which used liquid sodium as a coolant and the reactor ran much hotter – 1100 farenheit as opposed to 550 in a boiling water reactor. The liquid sodium circulated inside the reactor instead of water, with the heat of the reaction being removed from the system by a heat exchanger which produced steam outside the reactor for use in producing electricity. The temperature difference and coolant characteristics in the complimentary reactor facilitated the burning of the isotopes, and you got to use both sides of the reaction – the boiling water reactor produced electricity while producing unwanted isotopes, and the sodium cooled reactor produced electricity while burning the unwanted isotopes out. This process could be repeated 20 times, and when it was finished the fuel was DEAD and no longer hazardous because all of it’s radiological potential was used up. It was a clean energy dream come true, and Carter banned it by executive order!” [Executive Order 12193] He specifically stated that the burn down was so complete that the spent fuel was safe to handle directly with bare hands, and needed no special care or maintenance at all, and after I questioned him about exactly how safe, said you could safely sleep on it. I questioned him several times, saying he must be exaggerating, but he said ALL radiological potential was used, and the fuel was completely inert at the end of the final cycle.

        Now Russia has it. – http://theunhivedmind.com/wordpress3/russia-proceeds-with-closed-loop-nuclear-technology-carter-banned-russia-now-has-a-free-energy-future/
        20 cycles of power generation and no radioactive waste at the end. Get’er Done.

    • The biggest subsidy for renewable power is the mandate that power companies must buy what is produced, whether they need it or not. That is rarely included in the cost of subsidies.

      • Law of unintended consequences.
        As more re-newables go on-line less revenue is generated by the traditional power sources. Plant maintenance eventually suffers. Sooner or later, when the sun don’t shine and the winds don’t blow there will be limited power backup resulting in brown outs or even black outs.
        South OZ anyone?

  4. lenbilen, excellent point.
    Ethanol mandates could shut down the East Coast’s largest refinery
    Cost refinery $300 million in one year for RIN’s!! could cost jobs and eliminate competition because of ethanol.
    “It’s no secret” the refinery has faced headwinds, PES Chief Executive Officer Greg Gatta wrote this month in a letter to employees. The company took on debt to fuel growth but now needs to “assess our capital structure,” he said.
    The company’s biggest expense: Renewable Identification Numbers, or RINs, which the company says will cost more than $300 million this year. Refiners are required to blend petroleum-based fuels with ethanol and biodiesel to meet annual quotas. Those that can’t blend the biofuel themselves must purchase RINs credits. With the Environmental Protection Agency set to reject the Carl Icahn-backed bid to shift the burden of the mandate, those costs are unlikely to abate.”

    • You get no energy gain with corn based ethanol and many studies say you lose energy. You also create a great deal of pollution when you make it.

  5. When I served at Fort Dix back in ’65 we all had to do fireman duty. Nothing to do with putting fires out, it was about night time operating the coal furnaces used to heat the barracks. I don’t know about the economics, but I think the story was that the barracks had previously been heated with oil, and the Johnson administration had that changed to benefit the Appalachian coal industry. Never verified that, but it seems plausible. Wonderful how you can influence the economy when you have billions of dollars of taxpayers’ money to spend.

  6. No no no no no!
    There are no subsidies for wind or solar!
    Never have been!
    Soon they’ll be too cheap to meter.
    Isn’t that right Griff?

    • They already are too cheap to meter.
      Since subsidies seem to be paid whether or not they are generating.

    • They are certainly starting to show lower prices/subsidy free tenders… cheaper solar than coal in India, subsidy free solar farm in UK, subsidy free offshore windfarm in Germany, latest German onshore wind enders this week at lowest rate yet.

      • Griff, there are back door ways to subsidize expensive,unreliable energy and it is called mandates that tax or impose fees on fossil fuels as shown below:
        “It’s no secret” the refinery has faced headwinds, PES Chief Executive Officer Greg Gatta wrote this month in a letter to employees. The company took on debt to fuel growth but now needs to “assess our capital structure,” he said.
        The company’s biggest expense: Renewable Identification Numbers, or RINs, which the company says will cost more than $300 million this year. Refiners are required to blend petroleum-based fuels with ethanol and biodiesel to meet annual quotas. Those that can’t blend the biofuel themselves must purchase RINs credits. With the Environmental Protection Agency set to reject the Carl Icahn-backed bid to shift the burden of the mandate, those costs are unlikely to abate.”

      • If you can’t compete with lower priced competition, you have legislation passed to increase the prices of your competition’s product (ala Carbon Taxation)

      • Griff, have you looked at Merkel’s role in COP2 (1986)? The Conference of the Parties where COP3/Kyoto was set-up.
        Off topic but noteworthy.

      • Cat, initially it is expensive… the pioneers like Germany found it so, but it drops as volume increases.
        If you think it is necessary – and if you accept climate science you would clearly think you needed to change investment to renewables – you might think the cost justified.
        And it is not in any way unreliable. It is predictable and does not destabilise grids. (extreme weather events and poor grid management destabilise grids)

      • The Pacific NW is about to find out what an 80% reduction in Solar output for a couple of hours could do to an electric grid. Fortunately they still have sufficient fossil back-up to negate the loss or they could be in fairly deep.

  7. So far the subsidy exists only in the mind of Gov. Justice, and producers of much cheaper western (U.S.) coal oppose it.

  8. It’s why Texas went for wind, because federal money. Federal money coming into your state makes your states economy better. If there is federal money out there for things you take it. If you are paying more out than coming in for tax money it means your state gets poorer. If you get more in that you give than your state gets richer. It’s terribly corrupt the way it’s done.

  9. Continuation of the above article:
    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.”
    I just sent this to friends in the Canadian press.
    What do you bet that the Russians are also funding our radical enviros, who oppose our oil sands, pipelines, etc.? I understand their main funding is channeled through the USA-based Tides Foundation, but what else is going in?
    Best, Allan
    Link to the paper: http://freedomandprosperity.org/2017/publications/russias-ties-to-u-s-environmentalist-groups
    Executive Summary:
    Revelations that Russia may have interfered in the 2016 U.S. elections have dominated headlines in recent months. While we may never know the full extent of Russia’s influence on the election or its outcome, there is, in fact, overwhelming evidence of Russia’s meddling in one critical sphere of U.S. politics: energy policy. 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 investigative report documents how executives with ties to Vladimir Putin funneled millions to anti-fracking groups in the U.S. in order to benefit Russia’s oil export-driven economy. It concludes by noting the need for investigations into Russian election meddling to also consider their activities to influence other policy areas.
    CF&P President Andrew Quinlan commented, “It’s critically important to understand how foreign powers are seeking to undermine U.S. energy markets. We hope this investigative paper is just the first in a much broader inquiry.”

  10. Griff is definitely paid to post the drivel he posts. Anyone who falls for the carp he posts, ad infinitum, must be paid to do so.

    • I am not paid, not a member of any green group, lobby group or political party (etc)
      I am just (I wonder why sometimes) interested in climate and renewables.
      I wonder why you need to write that?
      The information I present is out there on the net for anyone to find. If you can counter it with other information, do so. You would surely benfit from doing the research…

      • “Griff August 19, 2017 at 12:55 am
        You would surely benfit from doing the research…”
        Not by “researching” out there on the net. The net is the largest source of redundant, politically biassed, information. I did my research, especially physics, well before the net came of age. What I read, researched and studied bears no resemblance to what passes for “science” these days found on the net.
        The Australian ABC, The Guardian, RealClimate and Cleantecnica etc etc are not reputable sources of information.

      • “If you can counter it with other information, do so”
        Many, many posters – including me – have done so times without number.
        But all that happens is that a few weeks later you post the same utterly discredited lies again…and again…and again.
        You clearly think all the posters to this blog are not only as stupid but as lacking in real knowledge and understanding of the subjects in question as you are yourself – and that’s taking the p1ss.
        Meanwhile, have you apologised to Dr. Crockford for posting easily disproved lies about her professional qualifications yet?

        • “catweazle -I honestly don’t recall any science you’ve posted to contradict me”
          That’s because your understanding of honesty is zero at best, I don’t know if it is possible to have negative values of honesty but if it is, you clearly possess them.
          On top of which, you wouldn’t understand science if it scuttled under your bridge and bit you on the snout.

  11. If renewables are so cheap Griff explain why South Australian electricity prices are so expensive .
    Your poles and wires comment with a link to ABC story does not factor the need to upgrade because of bushfires started by poles and wires .

    • Very good. The first fire on Black Saturday in 2009 is reported to have been caused by a downed line sparking on the ground and NOT climate change. Renewables connected to that line would not have prevented it.

      • Actually Patrick it was a very windy day and quite hot so depending on where a windfarm was it may have shut down for being too windy .
        But yes a fire caused by arcing power lines does not discriminate

    • I would imagine the new wind farm, grid battery and solar CSP I have seen announced in recent months might help drop SA electricity prices…. will certainly produce a more stable grid.
      “The reported contract price to the state government of $78 per MWh is not much higher than recent contract wind generation prices and at or below prices for electricity from current solar photovoltaic power stations, neither of which include energy storage. It is also well below the estimated cost of any new coal fired power station in Australia, and well below the spot wholesale price of electricity in the SA market region, which has averaged between $110 and $120 per MWh since March this year.”

      • South Australia has the dearest electricity in the country and on a par with the dearest in the world, 30 million to keep the coal fired power station going , the solar thermal plant if built for the stated amount will be a miracle then add the big battery and the diesel generators their putting in and this state will have the dearest electricity in the world .

      • Gizmodo? Nice reliable source of information. DId you just punch in to Google some search and this site was spat out? I thought so…so much for your “research” on the net eh?

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