Posted by
Catmman on Friday, July 25, 2008 10:10:29 AM
At first glance, the energy proposals of Texas oilman T. Boone Pickens sound good. "We can't drill our way out of this crises" he says. I happen to disagree with that statement but the rest of what he says sounds good: We still need to drill, but we also need to invest in alternative energy to make ourselves "independent from foreign oil." Those altenatives being, wind, solar, etc.
Fundamentally, conservatives (and most other Americans) agree with this. We want to drill our own oil. We want to mine our own coal. We want to tap our natural gas reserves. We want more nuclear power plants. We DO want alternative forms of energy to work. We WISH they were viable now, but they aren't and won't be for the forseable future. That's the thing about "technology of the future" - it always seems to be just that.
You might assume that with that last sentence my argument then is not to work on alternative energy. You would be wrong. The government spends billions of dollars on alternative energy research - from wind power to cold fusion. That's billion with a capital B. And this money is spent every year. Billions more in private money is also invested on alternative energy research annually. The point being we DO spend money on this reearch and these sources of energy. Yet with all of this expense, alternative energy technologies are still in their infancy. It would be more than a couple of decades before this technology (and it's associated infrastructure) is on line to supply more than the trickle of national energy it currently produces.
With that said, T. Boone's ideas aren't bad as far as they go. What IS bad is what you find when you dig a little and read between the lines:
Not only does Pickens’ firm, BP capital, have significant investments in natural gas, but last June he announced plans to build the world’s largest wind farm in west Texas, capable of producing 4,000 megawatts of electricity.
The federal government subsidizes wind farm operators with a tax credit worth 1.9 cents per kilowatt hour — potentially making for a tidy annual taxpayer gift to Pickens based on his anticipated capacity. But all is not well in Wind Subsidy-land.
Since Congress didn’t renew the wind subsidy as part of the 2007 energy bill, it will expire at the end of this year unless reauthorized. Subsidies are perhaps more important to the wind industry than wind itself. Without them, wind can’t compete against fossil fuel-generated power.
As pointed out by the Atlanta Journal-Constitution on July 9, "In 1999, 2001 and 2003, when Congress temporarily killed the credits, the number of new turbines dropped dramatically."
It’s little wonder that Pickens is waging a $58 million PR campaign to promote his plan. If it works, his short-term gain will be saving the tax credit and his wind farm investment.
In the long-term, he stands to line his already overflowing pockets with hard-earned taxpayer dollars. What will the rest of us get from this T. Boone-doggle? That’s anybody’s guess, but it probably won’t be cheaper energy, energy independence or a cleaner environment.
This type of thing is what gets Al Gore in trouble and shows his rhetoric is driven by ulterior motives, not by some grandiose idealistic notions of "energy independence".
With T. Boone, this wouldn't bother me so much, until you get to the subsidies. I'm a believer in the market. If a good, product or service can't stand on it's own, if it can't survive on it's own merits, do we really need it? Subsidies, by their very nature, impart unfair advantage and have a tendency to keep people focused on areas that aren't really viable. The government has been subsidizing ethanol production for over three decades. The benefit of that expense has been what exactly? Higher food prices, less land use for food crop production, and a dirtier than expected emissions problem with the refined product (to name a few issues).
And in the areas of alternative energy when the subsidies are taken away the whole structure collapses. We've seen it happen first hand
here in the US, but
particularly in Japan. The solar power industry in Japan effectively collapsed within two years of the government stopping subsidies. Why? Because the government subsidies were artificially keeping solar power competitive. Without the subsidies, people couldn't afford the buy or install solar panels any more - the technology not being cost effective on it's own. Subsidies went bye-bye, so did the industry.
We should still invest in R&D for alternative energy. Absolutely. But until those technologies become viable and competitive - and can do so on their own - they should only be considered a supplement to conventional power generation (oil, coal, nuclear).
Calling for additional subsidies is not the answer either. A successful businessman as Mr. Pickens should know better.