Essay by Eric Worrall
Fund a green project, prop up an oil company – two University of Texas academics have figured out that in Texas at least, oil companies frequently collect the cash at the end of the green rainbow.
Who benefits from renewable energy subsidies? In Texas, it’s often fossil fuel companies that are fighting clean energy elsewhere
Published: August 4, 2022 10.20pm AEST
Nathan Jensen Professor of Government, The University of Texas at Austin College of Liberal Arts
Isabella Steinhauer Master of Public Affairs Candidate and Graduate Research Assistant, The University of Texas at Austin College of Liberal Arts
Texas is known for fiercely promoting its oil and gas industries, but it’s also the No. 2 renewable energy producer in the country after California. In fact, more than a quarter of all the wind power produced in the United States in 2021 was generated in Texas.
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By reviewing the applications and ownership documents, we were able to track who actually builds and owns a large portion of the nation’s renewable energy, when and how those assets change hands, and who ultimately benefits from the tax incentives.
The results might surprise you. The majority of utility-scale solar and wind energy projects in Texas aren’t owned by companies focused on renewable energy – they’re owned by energy companies or utilities that are better known for fossil fuels, including some that have aggressively opposed renewable energy and climate policies in other states and nationally.
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To our surprise, almost half of the projects built in 2020 or 2021 had changed hands by 2022. Some were due to company acquisitions. Many other projects were sold.
This changed the composition of owners. While renewable energy companies owned roughly half the projects at the application stage, by 2022, two-thirds of the projects were owned by utilities and energy companies with fossil fuel assets.
The original developers may have benefited from the first year or so of the tax break, but the new owners are poised to reap the majority of the remaining years of the 10-year property tax incentive.
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Read more: https://theconversation.com/who-benefits-from-renewable-energy-subsidies-in-texas-its-often-fossil-fuel-companies-that-are-fighting-clean-energy-elsewhere-187832
Personally I find this hilarious – big oil is collecting the lions share of the subsidies which are meant to be helping green energy businesses compete with big oil.
I have no doubt oil companies are at the end of a lot of other green rainbows, not just Texas. Oil companies are experts at positioning themselves to make money, and have vast experience with milking dictatorships, rigged markets and command economies.
Keep up the funding for big oil, greens.
The problem in Texas is that the subsidy mining wind investors do not pay for backup. Wind recently went to 3% of rated in a heat wave.
playdoh and graft are blaming that 3% on the natural gas companies causing the heat wave. /s
And it’s still a fossil subsidy when you don’t have huge water dams. It’s a subsidy for the faster starting, efficient at different levels, low fixed cost units. Which is usually gas turbine.
The EPR nuclear design ostensibly tries to get better at working at lower level while still being able to reach high level without preparation (called RIP), which French style nuclear driving can’t do, as the curve is chosen in advance. It also caused a lot of complication for the proof of safety margins.
“For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.” –Warren Buffet cited by U.S. News/Nancy Pfotenhauer
“Fossil Fuel Companies Collect Lots of Renewable Energy Subsidies.” Isn’t it what the subsidies have ben designed for?
And the “subsidy” industry also includes government funded university studies on who gets subsidies!
Isn’t that the job of the agencies handing out subsidies?
I thought the Greens wanted the Oil Companies to invest in Renewables. Sounds like they are!
No, it is an ‘auxiliary army’; when us the barbarians were chasing Romans out of Balkans, they cried “where the heck is ‘subsidium nostra'”.
Of course. But a small wording change makes it easier to understand: If the government demands ‘renewable’ energy and pays energy companies vast amounts for ‘renewable’ energy then surely it’s reasonable to expect Energy Companies to Collect Lots of Renewable Energy Subsidies.
Fossil fuels are energy. Fossil fuel companies are energy companies.
Libs love a lot of gubmint spending never realizing most of the $$$ spent
goes to the much hated large corporations who have at least one
department set up for gubmint contracting. GE, maker of aircraft engines, got tons of $$$ for their EV chargers & customer incentives to buy them, to boot!
GE is the only company worse than GM when it comes to siphoning up government subsidies. In both cases the G is for government.
Why do you say “worse?” If Congress doesn’t want GE or GM bidding they can write the spec’s to exclude them. Very simple, just specify the subsidies can only be applied for by companies under a certain annual gross sales.
Fungible financing carbon for a green and viable world.
So doesn’t the fact that many wind & solar farms developers flip these projects just 2 years after getting them established tell us that they’re just in it to harvest the subsidies & tax breaks?
Wasn’t it anti-Semitic Rep Ilhan Omar who said –
“it’s all about the benjamins baby”?
(which is about the only accurate statement she’s ever made)
ALL subsidies have the opposite effect to that advertised, ALL of them. Subsidies are the basis of just about every financial scam involving the state. It was probably the very first form of corporate government; “hand us tax money to fix stuff we broke”.
Next to a read-only public server that tracks every government transaction (and politician) the eradication of ALL subsidies is of greatest importance if we want to rescue mankind from the banksters.
I think you’ll find that all laws have the opposite effect of what they’re named. What’s the latest one called again – The Inflation Reduction Plan or something like that?
These morons that we have leading the country have no clue how anything works. Hell, they can’t even determine what pronouns to use.
The demotards have a flair for naming bills for the exact opposite of their effects. The would call a meadow muffin a meat pie.
I wouldn’t limit it to demoncrats. The Patriot Act comes to mind.
Generally speaking, government is a parasitic entity that constantly strives to grow bigger and take over. We need to shrink the size of government to something manageable by the people to only provide for the common defense, infrastructure, and to secure the rights of individuals.
Oil companies are energy companies. The color assigned to the energy is just advertising. Why this is surprising to anyone is what is important. It just shows how stupid and easily led consumers are.
“The color assigned to energy..etc..’
Back in the mid eighties in Darfur, Western Sudan diesel was expensive and hard to come by, but there was a fair amount of Libyan diesel on the black market it was quite a bit cheaper (if you didn’t get caught) and green in color …we all thought it was the dye, but maybe they were just ahead of the game.after all what’s the difference between dodging the tax and collecting a subsidy?
Cheers
Amazing that it took super Lib super green UT Austin until now to figure this out.
Yes, a couple of Liberal Arts nitwits.
They’ll be happy to see the Government Subsidies in their bank accounts at the end of the month.
This may help explain the brand new whirlybirds in the Corpus Christi field. Port there may be still active and has supply as does Harbor Island port which is now surrounded by hydrocarbon type vessels. Been having short power outages recently, wind usually now expected to reduce, hope for exception. Youngsters though do need experience without A/C.
So companies under pressure to improve ESG scores chose ESG projects made cost effective by ESG subsidies. Uhm… we needed a research study to learn this?
Shell renewable TV advert. There’s money in hedging your bets.
https://youtu.be/xg6qlqOvxVE
AOC will throttle Pelosi for single-handedly getting rid of net-zero to 2100 or most likely forever. By then not many of us here, but some born to the sceptic climate change mothers (there were will be very few if any of other kind) may be sliding down into another LIA, net-zero or not net-zero.
The summary published here never says a word about “Big Oil.” They say “energy companies or utilities known for fossil fuels.” From the beginning, we have known that electric utilities nationwide have been forced by law to have a portion of their generating assets in so-called “renewable energy.” Since Texas has favorable winds, utilities from Florida to the West Coast have spent money on Texas wind projects, because they had to.
These arts and humanities Longhorns are just discovering that? Talk about stupid. We’re it not for tax incentives, renewable portfolio standards, and governmentally skewed markets , we would not see another new wind or solar project in Texas. And then they dump their unwanted electricity on the Texas market. If FPL (Florida) or Duke Energy (the Carolinas) want to generate wind power in Texas, make them build transmission lines back to the East Coast.
Oil/Gas companies are smart enough to pick up all the $100 bills being scattered around by the Green Blob [aka subsidies] since they know that only fossil fuels can serve as baseload and also make-up for the intermittancy of wind & solar.
As Michael Shellenberger wrote in his book “Apocalypse Never”, the O/G industry helped the Greens demonize nuclear, which was their main baseload competitor. Mission accomplished!
But as bad as this was, my fear is the cancer of “wokeness” & ESG spreading around the corporate world.
Check out Vevek Ramaswamy’s book “Woke Inc.”.
An article from 2012:
How Big Oil Benefits From Global Warming Alarmism
“I find it somewhat comical when scientists and others who publicly express skepticism about a looming man-made global warming catastrophe are accused of being in the pocket of Big Oil. Here we are referring to oil and gas… master resource trade commodities that the entire world urgently depends upon. Can you imagine they are losing sleep over market competition from non-fossil “renewable alternatives” such as ethanol, windmills and sunbeams? Do you really think rampaging greenhouse gas regulatory attacks on coal-fired power are anything but a blessing?”…
https://www.forbes.com/sites/larrybell/2012/05/22/how-big-oil-benefits-from-global-warming-alarmism
Meet the Oil and Gas Climate Initiative (OGCI):
“The Oil and Gas Climate Initiative is a CEO-led initiative that aims to accelerate the industry response to climate change. OGCI member companies explicitly support the Paris Agreement and its aims.
As leaders in the industry, accounting for almost 30% of global operated oil and gas production, we aim to leverage our collective strength and expand the pace and scope of our transitions to a low-carbon future, so helping to achieve net zero emissions as early as possible.
Our members collectively invest over $7B each year in low carbon solutions. OGCI Climate Investments was set up by members to catalyze low carbon ecosystems. This US$1B+ fund invests in technologies and projects that accelerate decarbonization in oil and gas, industry and commercial transport.”
https://www.ogci.com/
It’s called hedging in economics .
It is a relief to find out thgat the Green Energy cash handouts are finally getting to a worthwhile cause in the Fossil Fuel Industry.
If you are an oil company, pick up gov’t money to save fuel at your refinery, cut CO2 emissions…..and then sell the fuel you save…reducing the industry’s CO2 footprint, while not changing the amount of CO2 the world produces by one bit, maybe delay the expense of drilling a couple of wells too. It’s actually typical “green” government planning.
If you offer money for nothing, that’s what you’ll get.
And the chicks are free.
Hahahaha
We’re all in dire straits now
Unleash the miners, because the green blob will need all the minerals they can dig up to build their renewables energy revolution. Goodluck transporting all that CCP built renewables crap across the planet on battery power lol.
There will soon be a glut of high-carbon steel on the market from all the re-cycled Russian tanks.
Confirmation bias! The researchers found what they already knew existed.
Texas wind farms and turbines are due to T. Boone Pickens. T. Boone either built or caused others to build the majority of the wind farms.
No, let us see these researchers find that same ownership ratios in Europe, Australia, etc.
Wow, whoda thunk? Capitalist companies engaged in crony capitalism.
Funny, they didn’t name one oil company. Electric Utilities are not oil companies.
Even funnier — State universities in Texas, especially UT, were nearly all created from agricultural, cattle, textile, and petroleum land grants. The last of those making up the greatest and most recent endowments. If oil companies weren’t finding the fake green movement profitable, most of their funding would be shut down.
How funny is it that a school of political science in the State capitol is just figuring this out now?
The purpose of climate change/global warming/CO2/petro fuel hysteria has never been environmental, but always has been about wealth redistribution amont the wealthy and allocation of political power.
No doubt that a Professor of Government and/or a Master of Public Affairs Candidate are shocked, shocked to find commercialism going in in the establishment.
Well fossil fuel companies aren’t stoopid-
Solar farms pocket eye-watering returns as fossil fuels drive power prices higher | RenewEconomy
But they want to latch on to existing transmission lines and generator hubs and skip the NIMBYs and usual suspects-
High-voltage powerline projects spark mixed emotions across regional Victoria and NSW (msn.com)
Leave the hard yards and slim pickings to the dedicated climate changers and their public circus and Ministers.