Short Memories

We have such short memories.

Relating to today’s debate about fossil fuels versus renewable fuels, here is what The Times of London said about a similar debate over coal versus renewables:

Coal is everything to us. Without coal, our factories will become idle, our foundries and workshops be still as the grave; the locomotive will rust in the shed, and the rail be buried in the weeds. Our streets will be dark, our houses uninhabitable. Our rivers will forget the paddlewheel, and we shall again be separated by days from France, by months for the United States. The post will lengthen its periods and protract its dates. A thousand special arts and manufacturers, one by one, then in a crowd, will fly the empty soil, as boon companions are said to disappear when the cask is dry.

People forget that the world was powered entirely by renewable energy until fossil fuels and later nuclear fuel came along. The truth is that today’s attacks on fossil fuels and the push for subsidies for renewable fuels are tantamount to asking for a return to the days described by The Times.

Eliminating Renewable Energy Subsidies is Key to Boosting Prosperity

Residential electricity prices have steadily increased for years, up more than 15 percent in the United States (not including Texas) since 2004. A newly released U.S. Department of Energy report on electricity markets and reliability makes it clear that renewable energy subsidies are contributing significantly to the increasing cost—and the decreasing reliability—of the national electric grid.

Yet the report stops short of making the most obvious recommendations to address this challenge—eliminating the subsidies and forcing renewable energy generators to pay for the costs they impose on the grid because of their intermittency and unreliability.

Unless the federal government and the states eliminates these policies, we will find ourselves suffering through energy poverty—a sharply reduced standard of living caused by high energy costs—in the future.

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Quote of the Week: Doug Wilson on Energy Independence

“Let’s talk about energy independence. My entire adult life I have been listening to politicians promise to work for energy independence. Just so’s we’re clear, we live on a continent that is so rich in energy that we could light and heat the whole planet for the next millennium or two. Whether we are talking about coal, natural gas, or oil, we could run circles around the Saudis, waving our hands in the air. So what is the principle obstacle that stands in the way of our energy independence? Why, it’s Congress! The people making all the vows and promises are the very ones who make it impossible. They are the only ones who make it impossible. They are the only obstacle. And so, every two years, they promise to work toward energy independence, and they have been doing this for decades. Give them time. Show some patience, champ. Just like Lucy and the football, hope springs eternal in the cranium of the blockhead. In case you were having trouble following my argument, the voter collective is Charlie Brown.” – Doug Wilson, from Blog and Mablog

Making Electricity More Expensive

Tuesday’s hearing by the Texas Senate Business and Commerce Committee helped shine some light on the challenges of Texas’ green energy efforts.

While we heard great things about the state’s energy efficiency program, we didn’t hear how much the program costs consumers–so i helped out with some testimony. Since 2002, Texas consumers have paid $591.1 million to support the state’s energy efficiency program, and the program’s estimated cost for 2010 is $114.8 million. A recent increase to the program by the Public Utility Commission of Texas will probably double these costs. And legislative proposals could increase the annual cost to over $500 million.

All of this would be okay, of course, if the state’s energy efficiency program saved consumers money through reduced consumption of electricity. However, there is simply no way to properly determine the efficiency of the state’s energy efficiency program. But an educated guess is that it costs more than it saves.

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Global Deceit

The fallout from Climategate continues to shake the foundations of the theory that global warming is manmade. My employer, the Texas Public Policy Foundation, recently held a debate on the issue at our 8th Annual Policy Orientation for the Texas Legislature. I think the results show even more clearly that the global warming machine may soon collapse on itself because of a lack of internal support.

National Review and the Contract

Why in the world would National Review say that, “Republicans ought to promote new energy technologies in order to reduce the risks of global warming?” I can’t think of a good reason.

Yet that is exactly what it does in an article by Ramesh Ponnuru, “Contractual Obligations,” that discusses the need for a new “Contract for America.”

Is it because, as Mr. Ponnuru points out, people worry about global warming? Well, people worry about not being able to pay their mortgages, but that doesn’t mean we should support massive government bailouts. Except that NR supported the Bush bailout plan as well.

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Subsidies Anyone?

According to the Cato Institute, federal subsidy programs topped the 2,000 mark for the first time last week. Almost half of those have been created in the last 20 years: the number of federal subsidy programs soared 21 percent during the 1990s and 40 percent during the 2000s.

As Chris Edwards, Cato’s director of tax policy, rather depressingly puts it, “There is a federal subsidy program for every year that has passed since Emperor Augustus held sway in Rome. We’ve gone from bread and circuses to food stamps, the National Endowment for the Arts, and 1,999 other hand-out programs from the imperial city on the Potomac.”

Of course, Washington isn’t alone in the subsidy game. Texas does pretty well too. In addition to the standard economic development programs, Texas is tops in the nation when it comes to renewable energy subsidies. By 2020, Texas consumers could be paying as much $1.3 billion a year to support wind energy—that is in addition to the $300 million or so the Feds are contributing to Texas wind producers. The solar folks are also lining up—the cost of proposed solar subsidies last session ran as high as $220 million. And they’ll all be back in 2011.

It would be nice in this one instance if we could topple Texas from its number one ranking.

Our Expensive Energy Future

This is a glimpse of the future under the energy efficiency regime being pushed in Texas and across the U.S. The picture shows a new home in the SOL neighborhood, three miles east of downtown Austin. It is being built on the premise that energy efficiency is the cheapest option for “new” energy.

A new study along these lines claims that energy efficiency would eliminate the need for seven new power plants and save Texas consumers $5 billion. But the reports always underestimate the costs of the energy efficiency measures and overestimate their savings. For instance, the study states that energy efficiency houses cost about 15% more to construct, though numbers in the study show the costs to be more like 20%. But whatever the figure, the mantra is that these higher costs will eventually be recouped through annual energy savings.

However, the numbers don’t actually work out so well.

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TX Legislature in Review: Electricity and Renewable Energy

Most of the electricity bills this session had one thing in common—they were going to make electricity more expensive for Texas consumers or taxpayers. Fortunately, most of them didn’t pass.

The major bill that did pass provided incentives, i.e. subsidies, for electricity generation plants equipped with carbon capture technology. But it may not wind up costing consumers anything, since the technology for carbon capture is so expensive that even subsidies may not make such a project feasible.

Consumers were saved from at least tens of millions of dollars in increased electricity rates when several renewable energy and energy efficiency bills died at the end of session. Though there is talk of including solar subsidies on the call for the upcoming special session—the Center will be releasing a paper on this issue detailing the high cost of solar.

This post was first published by the Texas Public Policy Foundation.

Texas New Energy Taxes

A recent study estimated that proposed federal legislation aimed at decreasing greenhouse gas emissions would increase Texans electricity bills by a minimum of $10 billion.

Meanwhile, the Obama administration announced new fuel standards that could cost American car buyers $19 billion a year when fully implemented.

Not content with these new energy taxes on Texas consumers, the Texas Legislature is busy adding more.

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