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Lots of Taxpayer Green Going to Greens

By: Daniel Horowitz (Diary)  |  March 7th, 2012 at 02:48 PM  | 

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Democrats have a penchant to misconstrue the parlance related to tax credits and subsidies.  They refer to subsidies as tax cuts and tax cuts as subsidies.  They would have you believe that oil companies are completely on the dole, while solar and wind companies are heavily taxed entities in desperate need of some “tax breaks” and loans in order to alleviate the burden of producing their auspicious form of energy.

Yesterday, CBO released a report stating the obvious.  They found that in 2011, federal subsidies for green energy totaled $24 billion.  Also, between 2009 and 2012, the DOE provided $25 billion in loans “primarily to producers of advanced vehicles, generators of solar power, and manufacturers of solar equipment.”  Fossil fuels, on the other hand, received $3.4 billion in “tax preferences.”

However, those numbers don’t tell the full story.  Most of the tax preferences for fossil fuels go towards more universal deductions like expensing for exploration costs.  Green energy receives direct subsidies per kilowatt hour produced – benefits that are awarded solely to the wind and solar industries.  Also, due to the inefficiency and cost of green energy, these companies fail to generate enough revenue to incur a tax liability.  As such, many of these tax preferences are actually refundable.  Fossil fuel companies pay millions in taxes.  To illustrate the point, Heritage scholar David Kreutzer shows how wind companies receive 1,000 times the subsidy that is given to oil companies.

The most important distinction between the two industries is the fact that green energy benefits from a clean-energy mandate in more than half the states.  One cannot possibly quantify the benefit of having government use the force of law to coerce consumers and producers into using your product, even though it is expensive and inefficient.

After all the government-induced tailwinds behind green energy, what have they produced?  n 2010, wind accounted for 0.9% of our energy supply, geothermal 0.2%, and solar 0.1%.  Fossil fuels accounted for 83% of our energy supply.

Despite this egregious display of picking losers in Obama’s Solyndra economy, Republican Senators Boozman, Brown, Grassley, Hoeven, Moran, and Thune penned a letter to Reid and McConnell asking them to renew the 2.2 cent/per kilowatt hour Production Tax Credit for Big Wind.  They had the hubris to demand that taxpayers “provide the wind industry with the stability and predictability to plan for the future,” even as they conceded that “it is clear that the wind industry currently requires tax incentives like the production tax credit to compete.”

No, senators, we don’t owe your industry anything.  And the fact that these companies cannot compete without corporate welfare (not to mention the mandates) is all the more reason to oppose this boondoggle.   Will our party ever learn to draw bold contrasts on the defining issues of our time?

We must fight for the Pompeo/DeMint bill to end all energy tax preferences.  Otherwise, we will be fighting against the renewal of Obama’s subsidies for producers of algae energy in 10 years from now.

Cross-posted from The Madison Project

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  • DerKrieger

    …of taxpayer green financing is the EPA. I read on the Daily Caller, no longer have the link, that 50% of the EPA’s budget is given out as grants to the ‘eco-warrior’ community, i.e. WWF, Greenpeace, Sierra Club et al who use those funds to sue states, energy companies, timber companies, municipalities, and otherwise advance their agenda with OUR money.

    • greyeagle

      The House should immediately stop these grants and cut the funding sharply to the EPA.

    • daylightsavings

      weaning ourselves from fossil fuels? we have to start somewhere, but any attempt to go GREEN annoys the hell out of the right.
      sure there will be some mistakes and carpetbagging(as exists with big oil), but to do nothing is worse.
      we will be six feet under, but our grandkids will have to live with the mess we have created.
      get real. we need to plan for the future, and fossil fuels should not be a large part of the new generation. it is only sensible to to get natural forms of energy a jump start…and if it is with my tax $…so be it. we are all part of the planet.

      • http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

        were applied to allow man to go from Point A to Point B faster than a horse on land or sails on the sea could carry them.. London smog from green wood burning stoves was hazardous to ones health. And let’s not get into the walls of horse manure making cities nearly unihabitable before the auto was invented. Ever wonder why NYC has BROWN stones?

        A green world is a very poor world.

        • daylightsavings

          and i agree with your wise comment. but i still feel that we need to at least give solar,wind etc a chance …..not to the TOTAL exclusion of fossil, but to augment.

          • acat

            especially when a lot of the subsidies seem to end up with supporters of the party who are in favor of solar and wind.

            I have no problem with these, or geothermal, tidal, hydro, or nuclear competing in the marketplace, but I have a large problem with the idea that government should get to declare an inferior product the winner, eh?

            Solar is doing quite well in some of the nations of Africa, where there is no “grid” but lots of sunshine. North America is not, for the most part, optimal for it – not enough sunshine in the winter months and an existing grid make it not-optimal. Some of the newer thin-film-on-metal-roof products may turn that around, but .. let it prove it in the marketplace.

            As for wind, I like it – but the energy shouldn’t be converted directly to electricity because it’s not a consistent source. The energy should be used to create potential energy in some other form, mechanical for instance, which can then be used to consistently generate electricity. Otherwise, the “base load” has to come from something other than wind .. and that takes quite a lot of hydrocarbons, eh?

            In short, it’s not that conservatives are opposed to “green”, it’s that we’re opposed to “waste” and “fraud” .. and a lot of the push to “green the USA” is based on waste and fraud, not ecology.

            Mew

            p.s. some of us are old enough to remember how the EPA was sold to us … if you really want to clean the planet, sell the EPA to China and India.

          • http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

            but until the next technological breakthrough, we must use what we have

        • acat

          what’s always striking, to this cat, are how few people portray serfs, and yet .. how serfs were by far the largest demographic at the time when western culture was busily clear-cutting large areas of the Germanies and France to set up small farming villages …

          Mew

          • http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

            and yes, the serfs usually get the short end of the stick

          • Repair_Man_Jack

            And Villains Ye Remain!

        • Ausonius

          The idea that somehow when Humanity lived in the jungles and forests and fields people were happier “communing with Nature” is a conceit from Rousseau and the Romantics of the later 1700′s and 1800′s.

          In fact, primitive and even semi-civilized people ate each other (Aztecs and other American Indians and assorted tribes across the planet), burned down forests and jungles to spook animals out for a slaughter, burned wood, peat, and dried manure for fuel, and did all kinds of environmentally UNgreen things, before modern inventions came around.

          We live in the cleanest of times! To be sure, the ideas of earlier decades (“the solution to pollution is dilution”) of dumping things in large bodies of water turned out to be wrong, but these have been corrected by capitalist societies!

          It is the Communist/Socialist societies which are responsible for dumping failed nuclear reactors into the oceans (the Russians), dumping garbage in the Pacific (the Chinese), and turning landscapes into moonscapes (East German Communists).

          • CincoSolas_del_Bronx

            Their hypocrisy is diabolically ingenious. Denying the Cultural Mandate, they make Eden the goal of human existence; denying Original Sin, they believe it possible to achieve that goal. Hence their delight in societies which appear to have arrived–by having never left. But with their left hand they inevitably cling to Evolutionism as well, which must reckon all earlier states as Negative and all future states as Positive. The Noble Savage obviously cannot exist in this light, but his world can still be projected as the glorious future hope which The Rest Of Us are obligated to realize.

            Thinking about actual, rather than hypothetical, primitive tribes brought back to mind this excerpt from Steve Saint’s End of the Spear in which he recalled bringing to the States one of the men who had killed his father decades earlier:

            Mincaye insisted that we walk up and down each aisle. He wanted to know what was in each box and can and package. He kept putting things in our shopping cart. He wanted to please Ongingcamo by taking lots of food back to her. As he filled the cart, I quietly put most of the things back onto other shelves. I’m sure we made a lot of work for someone who had to put all those things back in their proper places.
            :
            At the checkout counter, Mincaye watched everything the young lady behind the counter did. Then he insisted on carrying the big bags full of food out to the car. He hefted them onto his shoulders as we do in the jungle, and off we went.
            :
            Ginny had sent me to the store for potato chips, dip, and a loaf of bread. I came home with over a hundred dollars’ worth of groceries. I just could not say no to Mincaye when he so badly wanted to take the food to Ginny.
            :
            Later, when we got back to the jungle, Mincaye told the people all about the foreigners’ big food houses. … “They are so big that lots of people can live there at the same time. If I ever have to live in the foreigners’ place,” he told them, “that is the house I want to live in.”

            He told them that no one brings food into the food house. He had watched carefully, and everyone was taking food out. … He went on to say that anyone could take as much food as he wanted. He explained that they even gave us little cars with wheels so we could take a lot.

            “The only thing you have to do,” he explained, “is when you are leaving, you have to go by the place where the young foreigner girls stand. They look at you very seriously. But if you just stand there and smile, when they smile back, you can take all your food and go eat it happily.”

            I felt I should explain. I knew what was going to come next. They were going to ask me to build them a Winn-Dixie or a Publix so they could all grow fat too. I wanted to explain that you had to pay for the food. But most of Mincaye’s audience were older people who really didn’t have a good understanding of money. I pulled out a credit card and said, “Only giving the young foreigner something like this, can you take the food and go.”

            No Waodani knew what a credit card was, but at least they would realize that something special had to happen before you could take food from the food house.

            Mincaye just waved his hand as though what I had told them was of no consequence. “Don’t worry,” he explained. “They just give that thing right back to you, and then you can go and eat all your food!”
            :
            He was enjoying telling of his adventures in the foreigners’ place. “Babae has friends everywhere,” he explained. “Whenever we are away from the big, big food house and my stomach hurts, telling Babae, he just stops at one of his friend’s houses. They open the little windows in their walls and hand us food. Those people really like Babae, just like we do.”

            I have no doubt some anthropologists would like to throttle Saint for corrupting the innocent Waodani with modern culture. But he points out that none of his friends, while still retaining many of their traditions, are especially eager to return to the days when the tribe was on the brink of extinction, with a homicide rate accounting for 60% of deaths and no communication with the rest of the world.

      • Juggernaut

        systems that work near flawlessly. By 2025, its expected that 25% of cars could be no fossil fuel driven. Nothing happens in a vacuum nor overnight. I was on the internet when a 7500 baud modem was the fastest, now I surf at 30Mps, sure beats 7500 characters per second.

        The same is true for alternative energy as most are money wasting ideas just as the beta max vcr was worthless in less than 2 years. Contrast that to failed cars on batteries that will not travel 100 miles per charge, more like 65 on the highway, less if all city. And the cost will be higher once you factor in maintenance and those replacement batteries.

        No one is 100% against green but we are business minded. Liberals are creative, conservatives are logical so we see the world from a cost benefit standpoint, liberals see the world from the creative imagination that anything is possible. But why won’t you admit when you’re wrong about green failures like ethanol, solar and CO2? Solar is more costly and has a high failure rate plus it will not produce in all 50 states. Proven technology takes time.

      • wlcjr

        Conservatives are not against weaning ourselves from oil. We are against the use of force to do it. The whole idea of govt intervention is to alter the market forces at play, Unintended consqeuences occur.

        The current methods to “stimulate” the RE industry, which was growing at a healthy, natural rate before, is having the same result as when Carter did it back in the 70′s. Misallocation of resources and industry chaos.

        Dems favor raising energy prices, which hurts the poor. Why do Dems hate the poor?

      • funwithknives

        any answers at all? Just yesterday I witnessed a news item that assures any who take the time to look, that the Bonneville Power Authority{west coast} is literally paying wind power producers to not make juice. Power produced is not usable, as the grid has all it can handle. The Mandates for renewables do not take this into account. {Who Da Thunk It?}
        There is no Giant Omnipresent Battery to take the surplus, so all ratepayers ante up for cessation of windmill generation.{AKA: “Down Time”}
        Incredibly, the areas in question are actually too efficient and the existing wind farms have over saturated the available grid capacity.

        But ManDate we must, and on to the Future!
        If an area is obvious enough for a use {Wind ,Solar ,etc} markets would likely pick up on it, if it made sense., fiscally. But no one was-a bite-in’, ’cause it made little to no sense.Result: Subsidize the hell out it and who cares about the cost? WE GOTTA BE GRE-E-E-N-N…..!,& someone else pays the bill.

        Since Gov’t never worries about Unintended Consequences, and profit is always someone else’s problem, these types of scenarios will always exist., as long as no-nothings run the show. Barry proves at least once a week, this is one of his many specialties,and Sec. Steven {Clueless} Chu, fills in the blanks.

        Ask the rate paying Citizens of Great Britain about Solar and the insane gas rates they pay for backup generation, when the Sun Don’t Shine.{ Who would ever think that about Jolly Old England?}
        You Will Get an Ear Full!

  • gwbramhall

    Are you expecting us to buy into the Romney is a liberal meme?
    He’s as conservative as any of them. Didn’t he get the support
    of American Conservative Union, or whatever it’s called?
    I’m beginning to think you are not fair and balanced at this
    site. Do you detect the sarcasm? After all, if you read Ann Coulter’s
    column on the subject, “What’s wrong with Romney” it might just
    reboot you conservative radar. The link for those that don’t want to
    back out of this article and click on Ann “Human Events” lin is:.

    http://www.humanevents.com/article.php?id=49702

    • debjim90

      nt

  • sophillyjimmy

    The concept of going “Green” is still in it’s infancy and is far from saving money or cleaning the air we breathe and as long as it is getting money from We The People through the taxes we pay it is only making Obama cronies rich especially since Solyndra is bankrupt and that is only the beginning because most of the “Green” energy companies that the DOE is loaning money to they will also go bankrupt but be assured that Obama will get his cut up front to fill his re-election campaign fund and all the bonuses to company CEO”s, and other hierchy will be doled out at our expense.

    It is so blatant what this administration is doing that it is laughable but what is not funny is people are doing without and the Federal Debt is so deep since Obama has been in office that only the rich are getting richer, but of course the left wing is still claiming that the Republican’s are the party of the rich

  • hitthedeck

    I am in the belief that the Green movement is a stealthy vehicle for Obama to spread the wealth. Billions of dollars are missing with no accountability and no investigations from our Progressive Attorney General who is in lockstep with Obama?s ideology. We have witnessed the exposure of Obama?s appointed Green Czar the self proclaimed communist Van Jones. After the Jones exposure he joined the Reverend Wright and other old friends under Obama?s bus. Just how many of the green companies are legitimate and actually manufacturing energy products and how were the billions of dollars distributed. Why have large amounts of donations ended up in the Democratic Party before the company?s went bankrupt. These questions will not be answered as long as Obama is in office and I can only hope the money trail will be exposed by a new administration.