Cloud Cuckoo Land 2

A brief addendum to the previous post. Intrepid reader says this:

Oh what a dick... Oil and gas get over 25% of US Federal energy subsidies!

OIL and GAS are highly profitable and need NO external manipulation by the US government in order to encourage production... Ethanol gets over 30% so if you've got a farm and are growing corn you are officially a "Welfare Queen"... Coal gets 20%. Nuclear gets 9%. And wind? Wind gets 3.5% of federal energy subsidies...

The fact is that solar power, wind power, and biofuels receive less than 10% of government energy subsidies...

The odd thing is, this dick finds a lot here to agree with. Oil and Gas (and coal) need no subsidies to encourage production. That is because they contribute to the energy supply. Wind, solar, and biofuels do need subsidies because they do not contribute at all, or not enough to make them economically viable. Thanks, Dave, for confirming my point.

It would almost certainly be better not to subsidize oil, coal, and gas production. Why does Congress do so? Because it gives them leverage over those industries. I am completely in agreement with Dave over ethanol.

However, the percentage of energy subsidies that goes to wind, solar, and biofuels as opposed to oil and gas is obviously irrelevant. What counts is subsidies per kilowatt hour, or some other measure of energy produced.

Finally, the whole point of cap and trade is to make energy more expensive in order to force the industries to develop clean energy. If you don't agree, take up the point with Barack Obama. From Politifact:

It didn't take us long to find Barack Obama's original quote, which came from a videotaped interview he did with the San Francisco Chronicle editorial board very early in the presidential campaign, January 2008.

"Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket," Obama told the Chronicle . "Coal-powered plants, you know, natural gas, you name it, whatever the plants were, whatever the industry was, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers."

What Obama doesn't say is that C&T cannot possibly have any significant effect on greenhouse emissions unless the costs are horrendously expensive. That was my point.

Comments

[Donald Pay]

The costs of oil are unbelievably high. You just don't pay the true costs at the point of sale, because they are in your tax bill or your health care/insurance bill.

http://www.energyandcapital.com/articles/oil-gas-crude/461

[duggersd]

I believe I am the "dick" referred to in that post. While I agree with your point about oil and coal not needing subsidies, as was pointed out by someone else, those "subsidies" are mainly in the form of tax breaks. I happen to believe corporations do not pay taxes so whether they get a tax break is irrelevant. Dave also says ethanol gets 30% of subsidies. Does he maybe mean 3%? He lumps solar, wind and biofuels together as getting less than 10%. Last time I checked, ethanol was a biofuel.
Dave does not compare apples to apples in his argument. My cost analysis was based upon $/KWH in subsidies. He changes it to a percentage. Thus his distortion. To look at it another way, let us look at 10% blend of ethanol with gasoline. I have found my car gets from 1 to 2 mpg better mileage with pure gasoline when compared with gasahol. This translates to about 20 to 30 miles more on a tank of gas (15 gallon). Today, gasahol at the corner station is at $3.73 (rounded up from that 9/10--what is that for anyway?). Pure gasoline is $3.83/gallon. So if I am able to travel 400 miles on 15 gallons of gas, my cost per mile is about $.139/mile using gasahol and travel 420 miles using pure gasoline my per mile cost is $.137/mile. So which is actually more economical? Then take away the $.45/gallon ethanol subsidy and that cost of gasahol goes to $.157/mile. In this case, I suspect far fewer people would use ethanol. Hence, the ethanol industry would most likely go out of business or we would just import it from Brazil. Same is true with wind and solar.

[Dave]

http://www.window.state.tx.us/specialrpt/energy/subsidies/

and/or here

http://www.window.state.tx.us/specialrpt/energy/subsidies/exhibits/exhibit28-5.php

And you sir are not the "dick"

[Ken Blanchard]

Donald: yes. The costs of allowing people to drive are unbelievably high. And yet, we do so. You may want to close down modern civilization and put us all back herding sheep. I say we put it to a vote. Hey! Maybe we are.

[Donald Pay]

No one would build another nuclear plant without government subsidies/guarantees. There would be no one who would risk the capital. Nuclear is totally dependent on government. In fact it is a 100 percent socialist enterprise.

[Jimi]

Donald,

The definition of Socialism is:

The ownership and management of the means of production and the distribution of resources by a centralized government or selected community.

There are 104 Nuclear Reactors in 31 states in the United States. All owned privately. The subsidy is mainly in the form of an intial investment loan and a tax break....How in the world is this a socialist enteprise, and where do you come up with these fantasies?

[Donald Pay]

Subsidies per KWh that look only at direct federal dollars does not include externalized costs. That statistic is meaningless if it fails to include externalized costs.

[Ken Blanchard]

Donald: I understand. Actually quantifiable values are meaningless. Only purely speculative "externalized costs" count for something.

[A.I.]

"It would almost certainly be better not to subsidize oil, coal, and gas production. Why does Congress do so? Because it gives them leverage over those industries."

Wow KB, and next you will report on the tail you saw smacking it's dog against a wall.

[Ken Blanchard]

Sorry if I went over your head again, A.I., but watch how administrators behave when even a modest donor is on campus and you will grasp my point. With grants of money comes influence.

[A.I.]

Like grants of money in the form of massive corporate campaign contributions? You didn't go over my head KB, but you did manage to conflate two totally different interactions in a vain attempt to support a ludicrous assertion.

[Ken Blanchard]

A.I.: now I think we are getting somewhere. Yes, energy corporations, like all corporations and unions, "massively" contribute to campaigns. When I said that Congress subsidizes energy in order to preserve their leverage, that is what I had in mind. What do you think Congress uses its leverage for? Lots of things, including encouraging contributions.

My point was that this is one of the reasons it is so hard to get Congress to stop subsidizing oil, coal, and gas. I am all for ending all subsidies to energy production. That would save money, remove market distortions, and benefit the environment.

[Omit]

Incorrect. An electric car can treavl much further on a smaller amount of fuel, because of vast improvements in energy efficiency.*The easiest way to demonstrate this is by fuel cost. After all, you will wind up paying for fuel, no matter how it gets to you, right? First, let's look at gasoline. The typical driver puts about 15,000 miles per year on his car. This works out to 1250 miles per month.*If this driver's car gets 20 miles per gallon, this represents 62.5 gallons of gasoline. Using $3.20/gallon (about the price we paid this past summer, and I think it will get back there), our typical driver spends about $200 on gasoline every month.*An electric car uses kilowatt-hours (KWH) of electricity instead of gasoline. Typically our EV might get from 3 to 7 miles per KWH. So, for this example, we'll use 4 miles/KWH. In my city, there is a special EV electric rate of just 3 cents/KWH. But in other places, the electric rate could be 10 cents or higher per KWH. So let's use 6 cents.*Using these numbers, the same 1250 miles per month that cost our typical driver $200 for gasoline only costs $18.75 in electricity for our electric car. The electric "fuel" only costs about 10% of what gasoline does!*So, using this method, we can approximate that miles driven on electricity are worth 10 times the mileage of miles driven on gasoline, or we could also say it takes one-tenth the amount of fuel for an EV to treavl the same distance. (There are other ways to calculate this, but EV mileage is at least 5 times better, and from a money standpoint, as we have seen, up to 10 times better.)*Why is electric power so much cheaper than gasoline? There are two reasons. The first is that electric motors are far more efficient than gasoline engines, so EVs can drive much further on less fuel. The second reason is fuel transportation costs. The electric car fuels by wire (the electric grid is 95% efficient.) By contrast, your gas car requires a vast fuel transportation infrastructure that ships, pipes, trucks, and retails gasoline around the country (creating additional pollution in the process). The price of this infrastructure is built in to the price of gasoline.*This is also the reason electric cars pollute much less. Even when dirty fuel is burned at the powerplant, the vast improvement in energy efficiency of electric vehicles means far less pollution per mile.*SEE REFERENCES BELOW FOR THE NUMBERS I USED.