The Truth About Energy Subsidies

In the debate over energy subsidies, you will hear all kinds of claims.  One side complains about massive subsidies for fossil fuels and the other side complains about huge subsidies for renewable power, like wind and solar.

Where does the truth lie?  Last summer (July 2011), the U.S. Department of Energy's Energy Information Administration (EIA) issued a study examining this issue for electricity generation.  The study looked at all sources of Federal subsidies, including direct subsidy, tax credits, R&D, loan guarantees, etc.

The EIA found that for fiscal year 2010, subsidies to all electricity sources totaled $11.9 billion dollars.  Of that total, renewables received 55.3 percent.  Nuclear received 21 percent and coal received 10 percent.

When looking at subsidy shares relative to production levels, the differentials are even more startling.  Wind alone receives 42.0 percent of the total 2010 subsidies, while accounting for only 2.3 percent of total electricity production that year.

Nuclear received 21 percent of the total 2010 dollars, while producing 19.6 percent of the total electricity generated.  Coal received 10 percent of the subsidy dollars, while producing 44.9 percent of America's electricity.

On a per unit basis, the outcome is even more lopsided.  Think of 5 cents/kWh as a benchmark price for "grid" power.  Wind power's per unit federal subsidy totaled 5.25 cents per kWh in 2010, arguably an amount greater than the actual value of the power.  Nuclear received a federal subsidy equal to 0.31 cents per kWh.  Coal's subsidy accounted for a mere 0.06 cents per kWh.  On a relative, per unit basis, wind receives a subsidy 82 times as large as coal power's subsidy.  Comparing wind to nuclear on a relative, per unit basis, the federal subsidy of wind is 17 times bigger.

Solar power received 8.2 percent of the total federal subsidy dollars.  Its share of total 2010 electricity production rounds to zero percent.  On a per unit basis, solar received a subsidy of 96.8 cents per kWh.  That is a subsidy 1,507 times bigger than coal.

Renewable energy received most of the federal energy subsidy dollars.  On a per unit basis, renewables subsidies dwarf those available to conventional power.

The Boston Tea Party and the Revolution

Over at Private Citizen Media, David Strom writes about the first Boston Tea party and this historical parallels with the modern Tea Party Movement.  It is a short and useful history lesson.

Follow the Money: Politics in Minnesota

The Daily Caller continues its investigation into the connections between leftwing politics and the world of non-profits.  The latest installment examines a series of front groups organized by SEIU.  Daily Caller writes,

"The politically aggressive Service Employees International Union (SEIU) has quietly created a national network of at least eight community-organizing groups, some of which function alongside the Occupy Wall Street movement, a Daily Caller investigation shows.  Incorporated by the SEIU as local non-profits, the groups are waging concerted local political campaigns to publicly attack conservative political figures, banks, energy companies and other corporations."

You had to know that one of these groups would be based in Minnesota.  Minnesotans for a Fair Economy doesn't trumpet the SEIU connection.  Photo ID for voting appears to be a big issue of late.  Another group to keep your eye on.

Human Capital Bonds, Part 6

Catching up from the weekend, Minneapolis Star Tribune business columnist Neal St. Anthony interviews local non-profit executive Steve Rothschild in yesterday's newspaper.  The interview touches on many of the themes that I have been developing in this space, such as redesigning government services and the use of human capital bonds.  The interview is a good introduction to the subject.

Doug Wardlow on "America's Turning Point"

Over at Private Citizen Media I posted an essay by Minnesota State Representative Doug Wardlow, who represents the Eagan area of the southeast metro.  Rep. Wardlow writes on "America's Turning Point" and draws some interesting parallels between the end of the Roman Empire and our current situation.

Follow the Money: The Profit Behind Non-Profit

Nationally syndicated radio talk-show host Jason Lewis (Minnesota-based) has a commentary in Sunday's Minneapolis Star Tribune on the world of local non-profits.  Lewis notes that nationally, non-profits control $650 billion in assets and have income of $60 billion, collectively. 

Lewis also notes that so many non-profits seem to engage in activities far removed from anyone's idea of "charity."  Clearly, reform is needed.

Science v. Democracy, 2

Scientists at Cornell argue that people are too stupid to rule themselves.  I, of course, disagree.

Feed in Tariff Fail

Germany to cut solar subsidies 30 percent, reports the UK's Guardian.

Keith Downey on Priciples for Government Reform

I just posted a previously unpublished opinion piece by my state representative Keith Downey (R-Edina) on five principles for government reform.  Keith has been a leader of the Reform 2.0 effort in the state legislature.

Thought for the day

On this first day of March,

"And Winter, slumbering in the open air,
Wears on his smiling face a dream of Spring !"

--Samuel Taylor Coleridge