alternative energy

Big Company With Ties to White House Paid No Taxes; GE Also Got Corporate Welfare and Bailout on Special Terms

by Hans Bader on March 27, 2011

in Bailout Watch, Economy, Energy, Environment, Stimulus to Nowhere

“The top corporate tax rate in the United States is 35 percent, one of the highest in the world,” but General Electric, whose CEO was recently tapped to lead President Obama’s Council on Jobs and Competitiveness, pays no taxes at all, reported the New York Times.

The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.  Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

This negative tax rate is the product of lobbying aimed mostly at liberal lawmakers. “G.E. has spent tens of millions of dollars to push for changes in tax law,” such as “‘green energy’ credits for its wind turbines.” “Since 2002, the company has eliminated a fifth of its work force in the United States while increasing overseas employment.”

In his State of the Union address, President Obama called for even more spending on forms of energy that benefit GE.  Government energy spending and tax credits disproportionately benefit GE, which recently spent  $65.7 million on lobbying to get government subsidies.

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The Objections to Wind Farms

by Michael Fumento on February 8, 2010 · 2 comments

in Energy

Despite massive subsidies, wind power still only provides about two percent of U.S. energy. Part of the problem is inherent. It takes a lot of turbines to produce the power that a single coal-fired or nuke plant can produce. So wind farms are going to comprise a lot of turbines. And that causes problems, as we’ve been seeing in a 10-year fight over constructing a 130-turbine offshore wind farm near Martha’s Vineyard.

It would be the first offshore wind project in the country and furnish about 75 percent of Cape Cod’s energy.

Ian Bowles, the Massachusetts energy and environmental affairs secretary, has called the project “symbolic of America’s struggle with clean energy. Its symbolism has risen above the number of megawatts.”

Although some protests have been dealt with, including potential hindrance to navigation and fishing and harm to birds, Indians are still against it. (I used to say “native Americans” until once when I was interviewing two of them and I kept saying “native Americans” and they kept referring to themselves as “Indians.”)

The Indians in the area practice a sunrise ritual on the sound and also say they may have artifacts buried beneath the seabed, according to the Washington Post. They’ve gotten the sound qualified for listing on the National Register of Historic Places, which could restrict its commercial use.

Interior Secretary Ken Salazar says that although his department is trying to broker a deal between the tribes and Energy Management, the company seeking to build the farm, “I’m not holding my breath for a consensus.” If both sides can’t settle on a compromise by April, he says, he’s going to just lay down the law himself in April and probably tick off everybody.

Michael Moynihan, director of the Green Project at NDN, a centrist think tank, told the Post, “It is emblematic of the difficulty of getting wind online, anywhere in America, with a system designed a century ago that is frankly hostile to renewable energy.”

Right. If it were just a few tightly-bunched turbines, it wouldn’t be a problem. But these farms, in addition to things like chopping up birds and bats have a big and obvious footprint.

Compare that with the nearest power plant to my home, which I often pass on my bike rides. It’s small, but probably provides more power than hundreds of turbines. Nonetheless, being coal-powered it drew the ire of a number of local residents. So the owners did something really smart. They built a wooden wall around the plant, then painted a very nice mural on it depicting local history.

This being the land of George Washington, the murals include such as Washington’s crossing of the Delaware. The wall isn’t that high, yet it’s enough so that if you didn’t already know the plant was there you wouldn’t know it was there. It has smokestacks, but you never see anything come out of them. The only ugly aspect was the coal pile, and it’s now obscured.

Out of sight, out of mind. But you can’t do that with wind. Solar has its own problem, also based on inefficiency, in that it requires huge tracts of land for all the panels needed.

But if you’re looking for new facilities that don’t produce greenhouse gas emissions there is a fourth solution. Nuclear power. A natural gas-burning power plant under construction has just exploded, killing five people. Every year, American coal miners die violently in mines or slowly from exposure to coal dust. Nuclear power in this country has never killed anybody. No birds, no bats, and most importantly no humans. That’s also true in France, where 70 percent of their power comes from nukes.

And today’s nuke plant designs are less prone to accidents than ever.

The writing is on the wall. Go nuclear.

The Energy Tax Budget

by Iain Murray on February 26, 2009 · 8 comments

in Economy, Energy, Environment, Global Warming, Stimulus to Nowhere

“Not one dime,” said President Obama in his address to Congress, referring to how much extra tax people earning under $250,000 a year will have to pay in his budget. Unfortunately, even if you don’t have to pay extra tax, you will have to pay extra fees for your energy, which are passed on to the government via energy companies. That’s the effect of the President’s cap-and-trade scheme for carbon emissions, an important part of his new budget. Energy companies will have to pay the government for permits for each ton of carbon dioxide or equivalent they emit in the generation of power. They will pass on these costs to the consumer, as has happened everywhere a cap-and-trade scheme has been tried. The Administration will split the revenues between $15bn for alternative energy pork and about $52 billion per year to help pay for the Making Work Pay tax cut/welfare check of $800 for “95 percent of all American workers.” By raising the price of fossil fuel energy and thereby making expensive alternative energy more competitive, the program is also aimed at reducing the amount of greenhouse gases emitted.

How much will cap and trade cost households in increased energy costs? Well, we know from a CBO study last year that a 15 percent reduction in emissions from 1998 levels would cost each household at least $660. That target is about 25 percent more stringent than the budget target, which is simply a return to 1990 emission levels by 2020 (far less than environmentalists demand). So we can apply simple arithmetic to estimate that the current budget cap and trade program will cost each income quintile $510, $660, $870, $1125 and $1635 (in 2006 dollars, slightly more in nominal values) respectively. This is a significant offset to the $800 “tax cut” per worker.

To those who might object that most households have two income earners these days, that’s not true. While the “traditional” family model of a husband supporting his family only accounts for 7 percent of householders now, dual-income families actually account for just 29 percent of households. Moreover, it is the bottom three quintiles that have on average just one earner, meaning that they suffer proportionally more from this energy tax increase.

Finally, for the highest quintile, the lower income limit is just $88,000. If you earn that amount, even if you have two income earners in the household, you will likely lose money from these stealth energy taxes. So will the average household earning between $35,000 and $55,000. So much for “not one dime.”

SOTU Watch: Energy Claims

by Iain Murray on February 24, 2009 · 2 comments

in Economy, Employment, Energy, Environment, Global Warming, Stimulus to Nowhere

The President might make various remarks relating to energy tonight. These are likely to center around grandiloquent claims as to the effectiveness of “green jobs” and alternative energy in saving the economy, not to mention the planet. Here are a few notes on the reality of these claims.

Green Jobs: The President will probably claim to be creating millions of “green jobs” to save the economy, fight global warming and end dependence on foreign oil together. In fact, “green jobs” have a number of problems, outlined in my Examiner piece from yesterday. To summarize:
• “Green jobs” come at the expense of traditional energy jobs. At the moment, the wind industry employs 85,000 people in all its facets (including support staff and suppliers). The coal industry employs 81,000 miners alone, and probably over 1.4 million in all, including support staff and suppliers.
• “Green jobs” are more expensive to society in general. Those 85,000 people in the wind industry contribute to the generation of just 1.3 million MegaWatt-hours of electricity, while the coal industry generates 155 million MWh, making each coal industry job seven times more productive than a wind industry job. The difference in cost is born by the rest of us.
• “Green jobs” are mostly low-paid and transitory, according to a recent report by, among others, The Sierra Club and the Teamsters union.
• A German government report found that “green jobs” are only beneficial to the economy as long as Germany remains a net exporter of green technology and power. As soon as other countries utilize their comparative advantages in manufacture and power generation, “green jobs” become a drain on an advanced economy.
• Most “green jobs” are related to the generation of electricity, which is not used to power cars yet, and so do nothing to lower our “dependence” on foreign oil (and most oil we use comes from the US and Canada in any event).

Alternative Energy: The President may repeat his promise to double the use of alternative energy, again claiming effects in terms of climate and energy independence. This claim is, in all probability, disingenuous.
• A doubling of alternative energy electricity production by 2011 would require the main alternatives – solar, wind, geothermal and biomass – together to generate 144 billion KiloWatt-hours of electricity by then. However, under the Energy Information Administration’s “business-as-usual” projections, these industries are expected to supply 150 billion KWh by then, with no additional policies needed. (Note the EIA includes hydropower and wood in its renewables calculations, for the solar/wind/geothermal/biomass figure, see here.)
• Reduction in greenhouse gases as a result of this policy is not likely to occur, as the EIA predicts a similar increase in the use of coal to generate electricity by 2011. In all probability, therefore, we will be emitting greater amounts of greenhouse gases by 2011, not less.
• A “smart grid” is probably a useful technology, but the President and the stimulus plan gold-plated it in order to boost their renewable energy rhetoric. William Tucker has a good summary of what is wrong with the President’s version of a “smart grid” here.
• If the President means that he will double the use of biofuels, this is likely to mean a significant increase in corn ethanol production, resulting in greater diversion of the corn supply into fuel production. This will likely increase already-inflated food costs (the recent price drop would have been significantly greater were it not for ethanol manufacture) and thereby increase food insecurity in a recession. Increased ethanol production is opposed by most major environmental groups as well as free-market groups. See Facts About Ethanol for more.

Stimulating Alternative Energy

by Iain Murray on January 9, 2009 · 4 comments

in Environment, Global Warming, Politics as Usual, Stimulus to Nowhere

In his speech on the stimulus package Thursday, President (Elect) Obama promised to double alternative energy use in three years. How likely is this?

Well, for a start we don’t use much alternative energy to begin with – slightly less than 7 quadrillion BTU of the 101 quads we use as a nation annually. Of those 7, 2 quads are related to the use of wood as fuel, something which is not normally viewed as environmentally friendly, and 2.5 are hydropower, an energy source once thought as environmentally friendly but now usually opposed as destructive. Of the remaining 2.5 quads, biofuels provide about 1 quad, and biofuels have become increasingly controversial and opposed – rightly – by many green environmental groups (source for these figures here).

So the more “acceptable” forms of renewable energy – “waste” biomass, geothermal, wind and solar – only provide just over 1 quad between them. Wind provides 319 trillion BTU and solar just 80. If these two forms of renewable energy are going to form the basis of Obama’s promise, the increase in scale needed to provide 7 quads between them in three years is simply inconceivable. A seventeenfold increase in these forms of energy would be a vast achievement, and one that would surely be trailed in the speech. It would presumably also require at least a seventeenfold increase in subsidies ($740 million in 2007 – see Table ES5 here) to about $13 billion annually, about the same as the Detroit bailout.

It seems likely, therefore, that, while there will be some wind and solar investment, perhaps some significant amounts, to meet a target of an extra 7 quads of energy, the only feasible source that is scalable to the intense required will be biofuels, but even that will require a massive expansion, and one that will have significant implications for crop prices, food prices and land use. The consequences may prove unacceptable to all but the agribusiness lobby and farm state politicians.

So it seems likely that the target of doubling the use of renewable energy does not actually refer to the full range of renewables at all, but just to those “acceptable” alternatives. This would imply that the target is only 1 extra quad of renewable energy by 2011, which, while it would represent a significant expansion of those industries, would amount to just a “drop in the bucket” of total US energy use. And, as we hear in the debate over ANWR every time it comes up, a “drop in the bucket” is just not worth doing…

It appears that this part of the stimulus package is, at most, a shibboleth.