3 MIN READ - Fresh dispatch from the Cautious Optimism Correspondent for Economic Affairs and other Egghead Stuff. Here he drills into some Energy issues.
It turns out according to the U.S. government’s own EIA report, solar receives over 1,600 times more subsidy dollars per KWh generated than traditional coal and petroleum (96.8 cents per KWh vs 6/100ths of a cent).
For the NCPA story which links to the U.S. Energy Information Administration's study go to...
http://environmentblog.ncpathinktank.org/which-energy-source-receives-the-largest-subsidy/
The EIA study was conducted during FY10 at the height of the failed Obama green energy spending spree, but even today solar and wind still massively outcollect government money via their fossil fuel competitors per KWh generated.
And while solar and wind get direct government payments, fossil fuel “subsidies” are mostly writedowns on equipment depreciation—a form of “subsidy” that all companies take. Furthermore, these metrics exclude “reverse subsidies” (i.e. taxes paid).
For example, in the decade FY2005-FY2014 one petroleum company alone, ExxonMobil, paid over $250 billion in corporate income taxes, or over a quarter trillion (yes, trillion with a “T”, see links below to SEC filings) dollars.
This also excludes the additional retail energy taxes collected on the energy the company sells, and ExxonMobil is just one payer alongside other giant energy companies like ChevronTexaco, BP, Total, ConocoPhillips, Schlumberger, Transocean, Baker Hughes, and literally hundreds of others.
Some critics argue that wind and solar costs are all up front—in the production and installation of the panels and windmills—and that the energy flows at much lower cost. But it's worth reminding such critics that traditional petroleum's costs too are very front-heavy with major capital expenditures in exploration, drilling, and infrastructure.
For example, contracting an offshore drilling rig that can cost half-a-million to nearly a million dollars per day to operate (during periods of high demand), petroleum companies can pay over $100 million for a single offshore drilling project and in most cases find nothing.
Once all the costly failures are logged and a rig finally hits an oil and gas field, production rigs move in and energy is extracted at much lower cost. But petroleum companies make enormous upfront capital investments just like renewables, usually to fail.
The same is true with the expansion of refineries or construction of pipelines with large upfront costs and much lower operating costs once they are built. Or as mentioned in one of CO’s previous articles, there are also upfront costs associated with building natural gas electric power stations.
Factoring in all the financials—direct federal subsidies to wind and solar and enormous taxes paid by traditional fossil fuels companies, green energy should easily have the upper hand. Government props it up heavily while simultaneously hobbling and handicapping its competition.
Yet even with all its state-support, the propaganda claims of “competitiveness” still fall flat. When government help is removed from the calculus, the claims appear downright absurd.
One of the common refrains from those advocating “green” energy is that we need to stop subsidizing coal, oil and natural gas. And while they admit, even advocate for, the existence of subsidies for wind, solar and the like, they imply that if only we got rid of subsidies for oil, those other forms of energy would lose their competitive advantage and the world would automatically move to green sources.
They're at best only 1/1600th correct.
To verify ExxonMobil's corporate taxes paid for the 2005-2014 period, check the company's SEC filings (pages 41, 56, 53, and 53 respectively) at...
https://www.sec.gov/Archives/edgar/data/34088/000119312508041781/d10k.htm
https://www.sec.gov/Archives/edgar/data/34088/000119312511047394/d10k.htm
https://www.sec.gov/Archives/edgar/data/34088/000003408814000012/xom10k2013.htm
https://www.sec.gov/Archives/edgar/data/34088/000003408815000013/xom10k2014.htm
