So, back in August, I posted an op-ed from the New York Times about current fuel subsidies supplied by the federal government to ethanol and fossil fuels. I didn’t write much of a follow up – or any supporting nonsense to go with it.
But, with lots of debate about energy and renewables since then, it seemed like it was time to talk a little bit about energy subsidization.
Fossil fuel subsidies are something that really grinds my greens. More than anything else in our energy debate today, I’d say. Ethanol subsidies are up there as a close second. Why? Because, quite simply put, I am sick of hearing opponents of renewable energy argue that they “cannot compete on the free market.”
Anyone who is under the impression that our energy market in the United States is free, please take note: every single type of fuel, including oil, natural gas, coal, and nuclear, are heavily subsidized by the federal government. In fact, in FY2007 (that’s ‘fiscal year’ for those of you who don’t speak wonk), the highest amount of subsidy per kilowatt-hour of energy generated went to….drumroll…coal. The federal government is still providing – as noted in the New York Times article – over $100 billion in subsidies to the fossil fuel industries and to ethanol, which is supported by virtually no one except a solid set of lobbyists from the corn belt. Meanwhile, if anyone wants to talk about nuclear as the wave of the future or the only technology that is “ready” to support us, I’d point to the fact that when there was an attempt to privatize the nuclear industry, not one single private investor was willing to take on the risk of a nuclear power plant. The amount required in federal backing and insurance for a worst-case-scenario situation is astronomical. (We still haven’t dealt with our giant waste problem, either, but that’s another topic for the future – and for Kara.)
And, I would like to point out, that is for technologies that have been on the market and in widespread use for decades – and even centuries. They’re not “just getting off the ground.” The technology is established. Companies have entire R&D departments where highly compensated engineers spend entire careers perfecting the techniques to explore, extract, refine, and utilize these fuel sources. Yet we – the American taxpayer – still pump money into them, as though they needed propping up.
Sound like bloated government to anyone else? Because it does to me.
Advocates argue that energy subsidies are necessary and that consumers and businesses will suffer were the artificially low cost of energy to suddenly spike.
My answer to that is two fold:
First, and foremost: protecting our natural resources depends on us paying the true costs of the goods we consume. I’m sorry to say it, but we don’t need cheap energy. Perhaps if fuel cost individual consumers and businesses what it really should, we would finally start to get Americans out from behind the wheels of their cars and see more walk-able and bike-able cities emerge. (That might also help with our nation-wide obesity problem….just saying.) Sadly, the window to phase out these subsidies without causing a major disruption has passed. Now, when the average American is facing more economic uncertainty than ever; when companies are laying off workers and local and state governments are struggling to make ends meet, this necessary change could send yet another aftershock through our system. I’d still personally say it’s time to make the switch, but I don’t exactly have high hopes that our political leadership will have the same, uh, cojones. We seem to be more on board with other equally ludicrous schemes, such as tar sands extraction and continuing to create political, environmental, and socioeconomic nightmares in other countries and continents over oil instead of just learning how to generate our own energy. (Ooops. Did I say that out loud?)
Second, and more importantly: We cannot expect new, renewable technologies – which have not been tested by consumers or supported by infrastructure – to compete in this market. Not when we’re still propping up the old giants, reinforcing them with our hard-earned dollars. Fossil fuel companies expend billions of their own dollars annually in exploration and development, because they already have the kind of profit margin to handle it. We’re just widening that profit margin with our tax dollars. Imagine if that amount of time, money, and personnel were poured into developing renewable energy sources – we’d have renewable energy technologies to the capacity we need in a heartbeat.
Ingenuity is born of necessity and opportunity. We have both. Cut the fossil fuel subsidies, and the average consumer in this country will finally realize just how strong the necessity is. Provide that money to get new technologies off the ground, and the opportunity will be seized.