Tag Archives: energy

Some Notes on Energy Subsidies

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Here are some data taken from the US Energy Information Administration’s report Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2010.

The following table is excerpted from the EIA report’s Table ES4, and it shows the amount of subsidy that each energy source received along with the per centage of the total of nearly $12 billion in subsidies handed out that each energy source received.

2010 Total (millions)

Share of Total Subsidies and Support
oal $1,189 10.0%
Natural Gas and Petroleum Liquids $654 5.5%
Nuclear $2,499 21.0%
Renewables $6,560 55.3%
    Biomass $114 1.0%
    Geothermal $200 1.7%
    Hydropower $215 1.8%
    Solar $968 8.2%
    Wind $4,986 42.0%
    Unallocated
Renewables		 $75 0.6%
Transmission and Distribution $971 8.2%
Total $11,873 100%

 

This table, excerpted from the report’s Table ES5, gives an indication of the relative amount of energy we taxpayers are receiving for our subsidy.

Share of 2010 Generation (percent)
Coal 44.9%
Natural Gas and Petroleum Liquids 25.0%
Nuclear 19.6%
Renewables 10.3%
    Biomass Power 1.4%
    Geothermal 0.4%
    Hydroelectric 6.2%
    Solar 0.0%
    Wind 2.3%
Total 100.0%

 

Notice that: coal, natural gas, and oil get 15.5% of the total subsidies while producing nearly 70% of our nation’s energy; renewables get over 55% of the subsidies and produce just 10% of our energy.

As the Wall Street Journal tells us that DoE, which owns the EIA,

…warned that “Focusing on a single year’s data does not capture the imbedded effects of subsidies that may have occurred over many years” for other energy sources.

Of course.  Because if we did consider such things, we’d have to notice that renewable energy subsidies have been costing taxpayers for 40 years—since the ’70s—with next to nothing to show for it.

“Get rid of the subsidies for the fat-cat oil and gas companies,” says Democratic Presidential Candidate Barack Obama.  Ignoring the snide tone of his remark (albeit paraphrased by me), I agree—get rid of the oil and gas company subsidies.  Get rid of the alternative energy subsidies, too.  If the (renewable) energy industry cannot survive in the market on its own, this simply demonstrates that the industry isn’t ready for the market.

At least the oil and gas and coal companies, with their subsidies, are generating actual electricity, though: look at solar—it’s getting 8% of the total subsidies handed out, and generating no electricity (can you say, “Solyndra?”).  Not a watt, except for rounding error to get to that zero.

Some Thoughts on Climate

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There seems to be a problem with the location of the surface stations that are used to assess  (global) temperatures across a wide geographic area and over long periods (as “climatologists” see it) of time.  In particular, the US Historical Climatology Network, which has major contributions to the data sets used by “climatologists,” seems to have been giving invalid readings for quite a number of years, and at least one US agency involved in driving Federal climate policy seems to have badly “adjusted” the data these stations have been doing a bad job of providing. 

Specifically, as Anthony Watts, the lead author of the paper that investigates the implications of this error (“An area and distance weighted analysis of the impacts of station exposure on the U.S. Historical Climatology Network temperatures and temperature trends”), put it in an earlier paper,

[A]pproximately 90% of USHCN stations were compromised by encroachment of urbanity in the form of heat sinks and sources, such as concrete, asphalt, air conditioning system heat exchangers, roadways, airport tarmac, and other issues.

This is the result of the well-known urban heat island effect.  The cities grew out to surround the originally placed sensors, and nothing was done about those sitings.

In Watts’ present paper (that inspirationally titled “area and distance weighted analysis” paper), Watts used a better method of assessing the quality of the station locations, one developed by Michel Leroy of METEO-France and accepted for use by the World Meteorological Organization.

Watts’ findings:

…a spurious doubling of U.S. mean temperature trends in the 30 year data period covered by the study from 1979 – 2008.

Moreover,

Poorly sited station trends are adjusted sharply upward, and well sited stations are adjusted upward to match the already-adjusted poor stations.

Well sited rural stations show a warming nearly three times greater after NOAA adjustment is applied.

Urban sites warm more rapidly than semi-urban sites, which in turn warm more rapidly than rural sites.

And finally:

The new analysis demonstrates that reported 1979-2008 U.S. temperature trends are spuriously doubled, with 92% of that over-estimation resulting from erroneous NOAA adjustments of well-sited stations upward.

Hmm….

How “Green” Energy is Working out for Germany

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We’re getting an empirical lesson in the effectiveness of an economy whose energy is intended to come entirely from “green” sources.  The Obama administration would do well to observe closely the in-progress German demonstration.

Germany’s electricity prices have risen 10% in the last few years, since the beginning of the German push to rely exclusively on these sources and to walk away from coal, which Germany has in abundance.  That might not seem like much of an increase, but it hurts.

The Federation of German Consumer Organizations estimates that roughly 10% of German households are having trouble paying for their energy.  Some have been pushed over the threshold and can no longer pay—and their electricity is being turned off altogether: nearly 200,000 recipients of Hartz IV, a German benefits program for long-term unemployed, had their power cut off in 2011 because of unpaid bills.  There’s more: the Economy Ministry has estimated that prices will increase an additional 3-5 euro cents per kilowatt hour in the next year, just to finance renewable energy subsidies and grid expansion.  Those increases amount to an additional €105-€175 ($130-$220) for a family of three.

There are more cost increases to come.  The Federal Network Agency, a wide-ranging regulatory agency with its fingers in electricity, gas, telecommunications, post and railway markets, will announce this fall that rates will increase by 30%-50% above current levels.  Consumer “contributions” to renewable energy subsidies will rise by more than FGCO’s estimate of 3-5 cents; the FNA says the rise will be closer to 4.7-5.3 euro cents per kilowatt hour—plus VAT, they remind us.  Hartz recipients, and potentially programs like Hartz, will be hard-pressed to meet these increases.

We don’t need these headaches in the US.

Coal and CO2

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We get over half our national electricity supply from coal.  Nevertheless, President Obama is intent on shutting down our coal-based electricity through his EPA regulations.  This has been commented on by lots of folks.

The Obama fantasy driving this is that by killing off the US’ capacity to use coal in energy production, he’ll put a serious dent in the production of CO2.

Never mind that CO2 is not a harbinger of disastrous warming (its atmospheric warming capacity is quite trivial, especially compared to, oh, say, methane, or to the atmospheric cooling capacity of water vapor through its reflection of sunlight back into space), but a confirmation of the health of the planet.  The record, for instance, from ice cores as widely disparately collected as Greenland and Antarctica demonstrate that atmospheric CO2 increases lag global warming, not precede it.  And of course the increases would lag.  The planet warms, as from a major Ice Age, or the Maunder Minimum, or…, and life flourishes.  That life exhales carbon dioxide, and as the life spreads in the warming climes, CO2 in the atmosphere increases.

But nor the Obama administration nor the pseudo-scientists of the Global Warming Funding Project want to talk about that.  Except the latter, to change their group name to the Climate Change Funding Project.

Expensive Energy

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Do “green” energy subsidies work?  Pretty much by definition, they do not.  Without the subsidies, “green” energy is unsustainably expensive.  Even—especially—when the subsidy is a government mandate to use/buy the “green” energy, the only thing green about it is the money necessary to buy it.  The cost of the ethanol subsidy/mandate in our gasoline has been well documented as appearing not only in the cost of our gasoline, but in the cost our food, as well.

Wind energy provides another example of an expensive, and failed, “green” energy subsidy.  The Wall Street Journal writes

Twenty-nine states have these rules requiring local utilities to purchase between 20% and 33% of their electric power from renewable sources.

Minnesota, in particular, the WSJ reports, required as recently as 2007 that utilities in the state push their use of renewable energy  to 25% by 2025, to 12% by this year.  That means wind energy because in that Midwestern and northern state, the sun doesn’t shine as much as it does in New Mexico or Arizona.

The Minnesota Rural Electric Association says its members lost $70 million last year because these utilities are forced to buy wind power they “can’t use and can’t sell.”  Even so, residential utility bills for MREA’s customers run $50 to $100 per year higher than they would absent the mandate.  That’s not chump change for Mr Everyman.

What are Minnesotans getting for their extra $100 of energy expenditures?  Nada.  Not more energy.  The wind does not blow all the time, so the wind mills stand idle while still costing money.  When the wind blows too hard, the wind mills must be shut down, so they stand idle while still costing money.

Not more jobs.  Minnesota’s wind-generated electricity doesn’t come from wind mills built in Minnesota.  They import it from North Dakota.  When the wind is blowing just right.

The WSJ also described a study published this year by the Manhattan Institute, a New York City-based market-oriented think tank, that compared states with renewable energy mandates with those that allow utilities to purchase the cheapest electricity available.

The states with mandates paid 31.9% more for electricity than states without them.  Residents of North Dakota, a state without a mandate, pay $7.63 per kilowatt hour for electricity.  Neighboring Minnesota pays $10.76.

Hmm….