Mad Hatters’ Energy Subsidies Abuse

 

The recent G20 summit took on the appearance of the Mad Hatter’s tea party (Alice in Wonderland) when the G7 produced a statement saying they are committed to ending “fossil fuel subsidies.” Terence Corcoran of Financial Post (here) on the fossil fuels subsidies folly.

In a sensational bit of reportorial distortion and ignorance, CBC News on Thursday reported that Canada and other G20 nations are “spending US$452-billion a year subsidizing their fossil fuel industries.”

The number comes from Oil Change International, one of scores of front organizations funded by an unholy cabal of activist U.S. foundations — Tides, Hewlitt, Oak, Rockefeller — whose billion-dollar cash pools are being mobilized to rid the world of fossil fuels and reduce the world’s population of messy people. The $452-billion was described as “shocking” by Oil Change activist Alex Doukas, especially since the objective of the Paris climate summit is to have most of the world’s oil and gas reserves “stay in the ground.”

Where Energy Subsidies Actually Go–The US Example

WHAT’S THE TRUE COST OF WIND POWER? by Randy Simmons at Newsweek

The high costs of federal subsidies and state mandates for wind power have not paid off for the American public. According to the Mercatus Center at George Mason University, wind energy receives a higher percentage of federal subsidies than any other type of energy while generating a very small percentage of the nation’s electricity.

In 2010 the wind energy sector received 42% of total federal subsidies while producing only 2% of the nation’s total electricity. By comparison, coal receives 10% of all subsidies and generates 45% and nuclear is about even at about 20%.

But policymakers at the federal and state level, unfortunately, have decided that the American people will have renewable energy, no matter how high the costs. As a result, taxpayers will be stuck paying the cost of subsidies to wealthy wind producers.

Meanwhile, electricity consumers will be forced to purchase the more expensive power that results from state-level mandates for renewable energy production. Although such policies may be well intended, the real results will be limited freedom, reduced prosperity and an increasingly unreliable power supply.

Back to Basic Terms

Climate activists and renewables lobbyists are acting like Mad Hatters, twisting language and logic to pursue their agendas. Let there be some common sense injected here.

A subsidy would be when the government takes money that has been taxed, borrowed, or printed, and pays it to some company like Solyndra to do something that the market does not support. Often these subsidies subsidize technologies that do not exist and may never exist (and they say WE ignore the laws of physics.)

In contrast, a tax reduction is NOT a subsidy. A tax credit says an industry gets to keep more of its own money that it has produced selling a product people want and need in the free market.

There is a huge difference between a law that lets you keep more of your own money; and another law that actually gives you someone else’s money. The two are not the same thing. Actually, the oil industry pays higher taxation rates than other industries and subsidizes the government with the billions it pays in taxes, not the other way around.

There are also billions more in economic benefit to the nation from the jobs they create and the increased mobility and productivity people enjoy by using our transportation system based on hydrocarbon fuels.

Summary

The Mad Hatters turn things upside down. Society is subsidized and made wealthy by fossil fuels, not the other way around. Some of that wealth is being diverted to renewable energy companies who do not create enough value to be in business without direct payments of tax dollars. They prove it by declaring bankruptcy when their subsidies are reduced.  Worse, hooking up wind and solar intermittent power to electrical grids adds more cost and unreliability than the renewable power is worth.

Read More about Energy Subsidies Abuse

The Appalling Truth About Energy Subsidies at Euan Mearns

Renewable Energy Cost Explosion: €25,000 euros for each German family of four  Daniel Wetzel, Die Welt (translation by GWPF)

What’s an Oil Subsidy? Heritage Foundation

Net Subsidy Analysis: A Better Way to Assess Government Energy Policy MasterResource

Why the Best Path to a Low-Carbon Future is Not Wind or Solar Power Brookings Institution

Killing the Energy Goose Science Matters

At its prime, the Carrizo Plain (S. California) was by far the largest photovoltaic array in the world, with 100,000 1′x 4′ photovoltaic arrays generating 5.2 megawatts at its peak. The plant was originally constructed by ARCO in 1983 and was dismantled in the late 1990s. The used panels are still being resold throughout the world.

At its prime, the Carrizo Plain (S. California) was by far the largest photovoltaic array in the world, with 100,000 1′x 4′ photovoltaic arrays generating 5.2 megawatts at its peak. The plant was originally constructed by ARCO in 1983 and was dismantled in the late 1990s. The used panels are still being resold throughout the world.

 

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6 comments

  1. Climatism · October 12

    Reblogged this on Climatism and commented:
    “Society is subsidized and made wealthy by fossil fuels, not the other way around. Some of that wealth is being diverted to renewable energy companies who do not create enough value to be in business without direct payments of tax dollars. They prove it by declaring bankruptcy when their subsidies are reduced…”

    Crony capitalism at its finest.

    Like

  2. oiltranslator · October 12

    I’d have to go with the econazis on this one. No way do I want the political State using tax revenue to subsidize wind, solar, tidal, geothermal, coal or nuclear energy–unless by “subsidize” you mean deregulate and abstain from taxing. In the latter case I’m for it.

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  3. manicbeancounter · October 14

    Here in Britain there have been complaints that for the North Sea Oil industry some of the tax breaks have been increased and the Petroleum Revenue Tax has been effectively abolished. It was at one time 50% of oil revenue on fields where production has been approved prior to 1993. The reason for declining taxation is the declines in production (now about one quarter of the peak) and the oil price. There is still substantial revenue from the oil industry profits along with associated revenues from the activity. The reductions in taxation rates are an attempt to maximize tax revenues.
    Even if subsidies were given in the future, it would be nothing to the very high tax rates on gasoline. The current price of gasoline is around £1.12 per litre, or USD 5.30 per US Gallon. Taxation is 58p per litre and 20% VAT on the retail price. So tax is around 69% of the current purchase price. With 2.30 kg CO2 produced per litre, the effect tax is $408 per tonne of CO2. UNIPCC AR4 SPM page 18 states that

    An effective carbon-price signal could realise significant mitigation potential in all sectors. Modelling studies show that global carbon prices rising to US$20-80/tCO2-eq by 2030 are consistent with stabilisation at around 550ppm CO2-eq by 2100.

    In Britain the carbon tax is currently 5 to 20 times the effective UNIPCC estimate, and has been at this sort of level for decades. Yet there are still many cars on the road, and the average fuel consumption is much higher than the most economical, even by class of car. Seems that the British motorist (and those in the rest of Europe where gasoline prices are similar) are not nearly as responsive to price signals as they ought to be.

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  4. Ron Clutz · October 14

    I think it is called “inelastic” demand, when something is essential and no substitute is available. Fossil fuels are the lifeblood of modern society, and climate change is a ruse to heap more taxation on them, while claiming to be saving the world from as yet unobserved global warming. When we get some cooling instead, they will surely say the credit goes to their energy policies.

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    • manicbeancounter · October 15

      Ron
      Demand is “inelastic” when there are no close substitutes available. Renewables are a substitute for fossil fuels in the production of electricity, but in terms of cost and availability they are not close substitutes. Similarly an electric car for most people are not a close substitute for gasoline or diesel cars.
      Also, what is a close substitute is subjective. Where I live in Manchester there is excellent public transport. When I worked in the City center I would take public transport. It was cheaper, quicker and much less hassle than by car. Yet colleagues with similar commutes chose the car. On cold, wet and gloomy winter days it is ain’t much fun, especially when trains are delayed. I also tended to get more colds and flu than when travelling by car.
      The justification for carbon taxes is that they are essentially elastic with respect to price. That means increasing the tax will reduce the total revenue. In the UK if the tax on gasoline was increased by say 10% (putting the cost up by 6-7%), one would expect an elastic demand to reduce the revenue. the long term impact (a few months) is to increase revenue by about 9%.

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      • Ron Clutz · October 15

        Thanks manic. There is also the noise factor with gasoline pricing fluctuations. Trudeau’s imposed carbon tax would eventually add about 11 cents/litre here in Canada on top of 2015 average taxation about 35 cents/litre. Each week in many neighborhoods (certainly ours) the gaspump price (average about 1.10 Can$/litre) goes up at least 10 cents/litre, some days later reducing by a similar amount. All the brands mimic each other, so there is not a competitive advantage. Sometimes the weekend is cheaper, sometimes more expensive. The 2 cents/litre carbon tax to be added each year will be lost in the continual jerking around of gasoline prices. I wish I knew what was driving this pattern. Are the retailers consciously helping the government disguise the increasing taxation? (No, conspiracies are imaginary.)

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