Energy Subsidies

I wish that there was a way for the government to encourage development of non carbon based energy sources and delivery systems, that did not involve the government choosing winners and losers.  That is, I wish we could publicly finance some work in this area without involving government subsidies or tax breaks.  Ha.

As much outcry as their is about this sort of thing, the bad part is how much subsidy we give to carbon based energy.  If it’s objectionable to subsidize clean energy, it’s got to be infinitely more objectionable to subsidize existing energy sources.

War on coal?  Not really.  BLM is selling coal from federal lands to the big coal companies.  Then they destroy our public lands by mining it, and SELL IT TO CHINA (#2, behind Argentina, then Brazil is #3, for 2013).  Who says this?  The Government Accountability Office.  Report here.  Article about it here.  Keep in mind, this is not a trivial amount of coal.  Per the report,

In fiscal year 2012, about 42 percent of the 1.05 billion tons of coal produced in the United States came from coal tracts leased under the federal coal leasing program.

In addition to this, they are not even selling it at a fair price.  Most of the sales are only bid by one company, and the methods by which BLS determines fair value are not released to the public, but are known not to adequately consider the higher price received for exports.

There are also externalities associated with coal.  The destruction of West Virginia and Kentucky, and the poisoning of nearby residents, via mountaintop removal.  Pollution just from moving the coal around via train (and this is even more objectionable when it is being moved to the coast for export).

What about oil?  Well, there are so many tax write offs for oil & gas production that attempts have been made to pass a bill just to eliminate those subsidies.

I don’t know how accurate this chart is, but here’s another comparison:

But to be fair, if you look up who pays the most taxes, it’s the oil companies.  Other articles refer to the externalities.  The best example of that, of course, is the Deepwater Horizon spill.  Here’s the Wikipedia page.  And here’s a bunch of collected stuff from the Guardian.   And here’s a really cool video documenting oil pipeline spills:

I know when my kids went on a fly fishing trip on the Yellowstone River in 2011, the trip was limited because of an oil spill.  Info here.  The guides told them they were not allowed to see it, or to let anyone else see it.  Which makes me wonder what other externalities we are just not aware of with the oil industry.

How about the gas being burned off in the Dakotas?  That’s another one.  Apparently they are burning so much gas that you can see the flames from space.  The owners of the mineral rights have filed lawsuits to get paid for this gas even though it is not being sold (NYT).  Seems fair to me.

So we need to figure out a way to make the companies (or even consumers) pay for the externalities, which obviously would involve the government in the form of taxes or regulations, or even law enforcement.  That would help level the playing field also.  Since, after all, by definition clean energy has fewer costs that must be borne by the public (greenhouse gases, pollution, environmental damage, etc.).

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