Wall Street Journal Looks at Energy Subsidies
May 12th, 2008
All of the candidates are talking about energy and ways to reduce the nations dependence on foreign oil and polluting technologies. While the discussion, especially among Democrats, has surrounded on energy production in wind, solar and other alternative energy, including clean coal, the Wall Street Journal has some interesting tidbits from the U.S. Energy Information Administration. They found that the taxpayers are spending $16.6 Billion a year in “direct subsidies, tax breaks, loan guarantees and the like. That’s double in real dollars from eight years earlier.”
Where is that money going?
Sphere: Related ContentAn even better way to tell the story is by how much taxpayer money is dispensed per unit of energy, so the costs are standardized. For electricity generation, the EIA concludes that solar energy is subsidized to the tune of $24.34 per megawatt hour, wind $23.37 and “clean coal” $29.81. By contrast, normal coal receives 44 cents, natural gas a mere quarter, hydroelectric about 67 cents and nuclear power $1.59.
The wind and solar lobbies are currently moaning that they don’t get their fair share of the subsidy pie. They also argue that subsidies per unit of energy are always higher at an early stage of development, before innovation makes large-scale production possible. But wind and solar have been on the subsidy take for years, and they still account for less than 1% of total net electricity generation. Would it make any difference if the federal subsidy for wind were $50 per megawatt hour, or even $100? Almost certainly not without a technological breakthrough.
By contrast, nuclear power provides 20% of U.S. base electricity production, yet it is subsidized about 15 times less than wind.
Posted in Election 2008 |
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