Think Washington subsidizes Big Oil the most? Think again
Not that this will stop the Obama administration from decrying giveaways to Big Oil — facts have never much bothered this bunch before — but a new government report shows there’s big money to be had in energy subsidies, mostly for fuels other than oil and coal.
The Congressional Budget Office compiled federal tax-credit and spending data since the Carter era and found that, lately, the vast majority of the corporate welfare is going not to fossil fuels but to renewable energy:
In case this picture isn’t worth a thousand words to you, CBO summarizes the trend neatly:
Measured in 2011 dollars, the cost of energy-related tax preferences more than doubled between 1977 and 1982 and then fell dramatically between 1982 and 1988, in part because of declines in tax rates and fuel prices… . The cost of energy-related tax preferences grew gradually between 1988 and 2005 and averaged about $4 billion a year from 2000 to 2005. That cost (including outlays for grants in lieu of tax preferences) has risen sharply since then, to an average of $20 billion a year from 2009 through 2011.
In 2011, renewable energy accounted for 68 percent of the tax preferences — almost seven times as much as energy efficiency got and more than four times as much as fossil fuels — and all of the direct subsidies. That’s about $7 of every $8 devoted to federal energy subsidies. Worse, the analysis toward the end of the report suggests these subsidies are being given in a highly economically inefficient way.
Even during most of George W. Bush’s tenure, fossil fuels did well to get half of the handouts. Note that the vast majority of the dough renewables got during his years went to the ethanol boondoggle — through tax subsidies which, finally and mercifully, ended after last year. Yet, in the past few years, ethanol has been matched by giveaways to other types of renewable energy. In fact, this chart more or less reflects the general problem with federal spending over the past decade-plus: Things got bad enough toward the end of the Bush era, but they have exploded out of all semblance of control under Obama. As the CBO authors also noted:
In 2009, DOE received $39 billion for support of energy technologies (after accounting for rescissions [sic] and transfers) — roughly 17 times the average annual appropriation for the preceding decade. That funding included $27.6 billion in budget authority provided under ARRA and $11.4 billion in regular 2009 appropriations.
Note the two bits I put in bold. There was a huge upswing in energy spending in 2009, and not only because of the “stimulus” package. That $11.4 billion in regular spending was the highest of any year since 1980, and it dwarfed the spending in the preceding 10 years.
I favor eliminating any and all corporate welfare, including to fossil fuels. But this report ought to put paid to the notion that we are subsidizing Big Oil to the hilt while ignoring “cleaner” energies.
Ought to — but it probably won’t.
– By Kyle Wingfield
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129 comments Add your comment
HDB
March 8th, 2012
2:35 pm
Tiberius – Your lightning rod of hate!
March 8th, 2012
2:24 pm
Granted, there are both federal and state incentives for wind power…..that should SPUR development!!
….from MidAmerican Energy:
MidAmerican Energy began installing wind turbines in 2004 and is No. 1 in the nation in ownership of wind-powered capacity among rate-regulated utilities.
In December 2010, MidAmerican Energy announced it would add 593.4 megawatts of new wind-powered generation in Iowa. The projects included the 443.9-megawatt Rolling Hills wind project, located in Adair, Adams and Cass counties; the 119.6-megawatt Laurel wind project, located in Marshall County; and the 29.9-megawatt Pomeroy wind expansion project, located in Pocahontas and Calhoun counties. The final portion of the 593.4-megawatt expansion project was placed in-service by year-end 2011.
In January 2012, MidAmerican Energy announced it reached an agreement with RPM Access for the acquisition of the 103.5-megawatt Vienna wind project, which will be located in Marshall and Tama counties. MidAmerican Energy also announced agreements with Clipper Windpower Development Company for the acquisition of both the 200.1-megawatt Eclipse wind project, located in Guthrie and Audubon counties, and the 101.2-megawatt Morning Light wind project, located in Adair County. The three projects, totaling 176 wind turbines, will be complete by year-end 2012.
MidAmerican Energy’s other owned wind projects are located in Buena Vista, Carroll, Crawford, Floyd, Hamilton, Polk, Pottawattamie, Sac and Wright counties.
When the 2012 wind projects are complete, MidAmerican Energy will own 2,284.8 megawatts of wind generation, with approximately 29 percent of its total generation capacity powered by wind.
…..from Arista Power…..
http://aristapower.com/wind/modern-wind/government-incentives/
With the right policy support, wind power can grow to provide 20% of the United States’ electricity, and in doing so, support 500,000 American jobs. The U.S. Department of Energy’s 20% wind energy by 2030 scenario shows that rural land owners would earn more than $600 million a year through land lease payments that range from $2,000 to $4,000 per megawatt annually, and rural communities would see increases of as much as $1.5 billion annually in property tax revenues that can be allocated to fund schools, infrastructure, medical centers, and other public services.
Here’s an economic engine we haven’t even cranked up yet!!1
Lil' Barry Bailout (Revised Downward)
March 8th, 2012
2:35 pm
Why is PG&E in California investing in wind farms if it doesn”t work??
——–
Uh, because the government mandated it?
Lil' Barry Bailout (Revised Downward)
March 8th, 2012
2:38 pm
HDB
March 8th, 2012
2:35 pm
———-
LOL! And where will all that cash come from?
The pockets of folks who buy electricity, through higher rates.
Thanks, Democrats.
That Black guy
March 8th, 2012
2:39 pm
Scott Droper
March 8th, 2012
12:09 pm
Sorry Kyle, but the chart can’t possibly be correct. Georgia Power’s Plant Vogtle has 8.3 BILLION in FEDERAL Loan Guarantees. That’s a subsidy and the nuke part of the graph doesn’t reflect that. There are three types of lies: lies, damn lies and statistics! Come back with a pretty graph showing total dollars going to various types of sources.
________________________________________________________________
You do realize that “FEDERAL Loan Guarantees” only come into play if the company defaults. Like all those “green” energy companies. Unless I’m mistaken, Plant Vogel has not defaulted, like all those “green” companies (i.e. Obama doners).
HDB
March 8th, 2012
2:46 pm
Lil’ Barry Bailout (Revised Downward)
March 8th, 2012
2:35 pm
Why is PG&E in California investing in wind farms if it doesn”t work??
——–
“Uh, because the government mandated it?”
Or maybe……there’s MONEY to be made!!
Pacific Gas and Electric Co.’s 2011 solicitation for new supplies of renewable energy brought in more than 300 offers, a new record for the utility.
The offers are being reviewed to determine the most viable and cost-effective projects, the company recently announced.
“The highly competitive proposals we received offer affordable power to help us achieve the state’s renewable energy targets,” Fong Wan, senior vice president for energy procurement at the San Francisco-based utility, said in a news release. “The tremendous response to our request reflects the robust supplies being offered by the renewable energy industry, which California has fostered through its aggressive state mandates.”
Since 2002, PG&E (NYSE: PCG) has signed more than 110 contracts for about 10,000 megawatts of renewable power. PG&E now expects to be able to meet California’s Renewable Portfolio Standard, which requires all retail sellers of electricity to deliver 33 percent of their electricity by 2020 from renewable resources such as solar, biomass and small hydroelectric.
The utility expects to reach 20 percent this year.
PG&E now typically gets more than half of its electricity from “carbon-free” sources, including large hydro and nuclear power, according to the utility.
Tiberius - Your lightning rod of hate!
March 8th, 2012
2:48 pm
And would any of them be doing this if there weren’t Government-based economic incentives to do so, HDB?
Again, where does the government get their authority to promote private businesses with taxpayer dollars?
Tiberius - Your lightning rod of hate!
March 8th, 2012
2:50 pm
“With the right policy support,”
And why do private industries need “policy support”?
@@
March 8th, 2012
2:52 pm
Never have truer words been spoken.
Of course, leave it to the American left to keep fighting for an idea that Europe has already proven not to work
With leftists the grass is always greener in someone else’s yard.
Can we just blow Greece off the face of the earth? Spain?
All a person has to do is go to “der Speigel” to see what a miserable failure their alternative efforts have been. There’s article after article. Some of the interviews are hilarious. Journalists “WTH’s goin’ on?”
The Alternative Option
Heck, the Europeans aren’t convinced their sacrifice has done anything to reduce C02.
2009 but probably still true today.
Germany’s renewable energy companies are a tremendous success story. Roughly 15 percent of the country’s electricity comes from solar, wind or biomass facilities, almost 250,000 jobs have been created and the net worth of the business is €35 billion per year.
But there’s a catch: The climate hasn’t in fact profited from these developments. As astonishing as it may sound, the new wind turbines and solar cells haven’t prohibited the emission of even a single gram of CO2.
Despite Europe’s boom in solar and wind energy, CO2 emissions haven’t been reduced by even a single gram. Now, even the Green Party is taking a new look at the issue — as shown in e-mails obtained by SPIEGEL ONLINE.
http://www.spiegel.de/international/business/0,1518,606763,00.html
Tiberius - Your lightning rod of hate!
March 8th, 2012
3:05 pm
Kyle, I do think with all the deflection and changing of the subject, you’ve effectively put a stake through the heart of one of the left’s most cherished boogeymen they love to trot out with your column this afternoon.
Well played, sir!
Lil' Barry Bailout (Revised Downward)
March 8th, 2012
3:11 pm
HDB, you merely showed how PG&E is meeting the government mandate.
Bottom line: Californians will pay more for electricity than if the government hadn’t interfered in the free market.
Lil' Barry Bailout (Revised Downward)
March 8th, 2012
3:17 pm
According to the Institute for Energy Research, states with “renewables mandates” have electric rates 40% higher than other states.
Thanks, Democrats.
HDB
March 8th, 2012
3:18 pm
Lil’ Barry Bailout (Revised Downward)
March 8th, 2012
3:11 pm
Like Enron did in California?? That cost Californians more than PG&E’s move into wind energy!!
Bottom line: Californians ARE paying more for electricity because of a deregulated energy market!! Note the costs of natural gas in Atlanta…that’s skyrocketed because of a deregulated market!!
Old timer
March 8th, 2012
3:24 pm
I still have a problem with peoplemthinkingnanprofitnmargin of 6 percent being huge profits…..
Old timer
March 8th, 2012
3:25 pm
People thinking profit margins
Lil' Barry Bailout (Revised Downward)
March 8th, 2012
3:27 pm
When California “deregulated”, they did it in a typical Democrat way (screwed up) and that’s what caused price spikes. For example, the government required all wholesale purchases to be made on the spot market. Dumb.
Thanks, Democrats.
HDB
March 8th, 2012
3:43 pm
Lil’ Barry Bailout (Revised Downward)
March 8th, 2012
3:27 pm
Better check your facts; it was market manipulations that cause California’s problems…..particularly ENRON!!
…from wiki….
The California electricity crisis, also known as the Western U.S. Energy Crisis of 2000 and 2001 was a situation in which California had a shortage of electricity caused by market manipulations and illegal shutdowns of pipelines by Texas energy consortiums. The state suffered from multiple large-scale blackouts, one of the state’s largest energy companies collapsed, and the economic fall-out greatly harmed Governor Gray Davis’s standing. The financial crisis was possible because of partial deregulation legislation instituted in 1996 by Governor Pete Wilson (REPUBLICAN). Enron took advantage of this deregulation and was involved in economic withholding and inflated price bidding in California’s spot markets. The crisis cost $40 to $45 billion.
……THANKS, GOP……
HDB
March 8th, 2012
3:46 pm
LBB, here’s more………….
Part of California’s deregulation process, which was promoted as a means of increasing competition, involved the partial divestiture in March 1998 of electricity generation stations by the incumbent utilities, who were still responsible for electricity distribution and were competing with independents in the retail market. A total of 40% of installed capacity — 20 gigawatts — was sold to what were called “independent power producers.” These included Mirant, Reliant, Williams, Dynegy, and AES. The utilities were then required to buy their electricity from the newly created day-ahead only market, the California Power Exchange (PX). Utilities were precluded from entering into longer-term agreements that would have allowed them to hedge their energy purchases and mitigate day-to-day swings in prices due to transient supply disruptions and demand spikes from hot weather.
PG&E yard in San Francisco
Then, in 2000, wholesale prices were deregulated, but retail prices were regulated for the incumbents as part of a deal with the regulator, allowing the incumbent utilities to recover the cost of assets that would be stranded as a result of greater competition, based on the expectation that “frozen” rates would remain higher than wholesale prices. This assumption remained true from April 1998 through May 2000.
Energy deregulation put the three companies that distribute electricity into a tough situation. Energy deregulation policy froze or capped the existing price of energy that the three energy distributors could charge.[13] Deregulating the producers of energy did not lower the cost of energy. Deregulation did not encourage new producers to create more power and drive down prices. Instead, with increasing demand for electricity, the producers of energy charged more for electricity.[14] The producers used moments of spike energy production to inflate the price of energy.[14] In January 2001, energy producers began shutting down plants to increase prices.[14]
When electricity wholesale prices exceeded retail prices, end user demand was unaffected, but the incumbent utility companies still had to purchase power, albeit at a loss. This allowed independent producers to manipulate prices in the electricity market by withholding electricity generation, arbitraging the price between internal generation and imported (interstate) power, and causing artificial transmission constraints. This was a procedure referred to as “gaming the market.” In economic terms, the incumbents who were still subject to retail price caps were faced with inelastic demand (see also: Demand response). They were unable to pass the higher prices on to consumers without approval from the public utilities commission. The affected incumbents were Southern California Edison (SCE) and Pacific Gas & Electric (PG&E). Pro-privatization advocates insist the cause of the problem was that the regulator still held too much control over the market, and true market processes were stymied — whereas opponents of deregulation assert that the fully regulated system had worked for 40 years without blackouts.
Inside Out
March 8th, 2012
3:46 pm
Watch out HBD….” itty bitty barry’s” head may explode if he has to deal with real facts!!!!! LMAO….
HDB
March 8th, 2012
3:52 pm
LBB…and the end of the “tale”……
In a speech at UCLA on August 19, 2003, Davis apologized for being slow to act during the energy crisis, but then forcefully attacked the Houston-based energy suppliers: “I inherited the energy deregulation scheme which put us all at the mercy of the big energy producers. We got no help from the Federal government. In fact, when I was fighting Enron and the other energy companies, these same companies were sitting down with Vice President Cheney to draft a national energy strategy.”
When the Enron verdicts were rendered years later, convicting Enron and other companies of market manipulation, Davis responded with the following quote:“
“Ken Lay and Jeffrey Skilling, more than anyone, are the reason I’m talking to you now from this law firm.”
On November 13, 2003, shortly before leaving office, Davis officially brought the energy crisis to an end by issuing a proclamation ending the state of emergency he declared on January 17, 2001. The state of emergency allowed the state to buy electricity for the financially strapped utility companies. The emergency authority allowed Davis to order the California Energy Commission to streamline the application process for new power plants. During that time, California issued licenses to 38 new power plants, amounting to 14,365 megawatts of electricity production when completed.[2]
In 2006, the Los Angeles Times published an article that credited Davis’s signing of the long term projects for preventing future blackouts and providing California a cheap supply of energy with the increasing costs of energy.
In March 2003, the Federal Energy Regulatory Commission’s long awaited report on the so-called “energy crisis” was released. That report mostly vindicated Davis, laying the blame for the energy disruption and raiding of California’s treasury on some 25 energy trading companies, most of which were based in Texas.
Inside Out
March 8th, 2012
3:56 pm
HDB….in 3….2….1……..SOCIALIST!!!!! MARXIST!!!!!!! COMMUNITY ORGANIZER!!!!!!!!……..BIRTH CERTIFICATE!!!!!…………BUT NEWT SAID………… LOL
HDB
March 8th, 2012
3:57 pm
I know, I-O, I know…..LMAO!!
Lil' Barry Bailout (Revised Downward)
March 8th, 2012
5:33 pm
Bottom line, HDB, is that Democrats and an occasional liberal Republican have run California for decades, so what happens there is thanks to libtarded policies.
They did a faux, libtarded version of deregulation and screwed things up.
Just like Obozo has screwed up health care for Americans and Democrats alike.
Just saying..
March 8th, 2012
8:32 pm
-”… if there were a greater focus on energy efficiency than on investing in boondoggles”
Influential GOP person: “I’m sure that conservation is a fine personal virtue…”
News On The Net - Lastest Washington News
March 9th, 2012
1:12 am
[...] Think Washington subsidizes Big Oil the most? Think again Think Washington subsidizes Big Oil the most? Think again “”Even with sales up in February over January, we are still seeking to align our production with demand,” GM spokesman Chris Lee said. The car company had hoped to sell 45000 Chevy Volts in … Read more on Atlanta Journal Constitution (blog) [...]
Joel Edge
March 9th, 2012
6:34 am
And we still don’t have a good way to store energy.
Just saying..
March 9th, 2012
9:17 am
Wow, this guy’s coachable. He’s a better campaigner:
“Since this president has been president, the cost of gas has doubled,” Romney said. “Not exactly what he might have hoped for, and he says ‘well it’s not my fault.’ By the way, we’ve gone from ‘yes we can’ to ‘it’s not my fault.’”
In Mississippi, Romney did try out some Southern charm, telling his audience he was “an unofficial Southerner.”
“I am learning to say y’all and I like grits, and things,” he joked. “Strange things are happening to me.”
Antonia
March 10th, 2012
12:21 am
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March 11th, 2012
2:08 pm
[...] Think Washington subsidizes Big Oil the most? Think again [...]
Think Washington subsidizes Big Oil the most? | Grumpy Opinions
March 11th, 2012
4:03 pm
[...] that this will stop the Obama administration from decrying giveaways to Big Oil — facts have never much bothered this bunch before — but a new government report shows there’s big money to be had in energy subsidies, [...]