"Rather than expand government, public policy should end preferential subsidies for politically favored energies and privatize such assets as public-land resources and the Strategic Petroleum Reserve. Multibillion-dollar energy programs at the U.S. Department of Energy should be eliminated. Such policy reform can simultaneously increase energy supply, improve energy security, reduce energy...
Quotes on Energy Freedom
"Green jobs estimates promise greatly expanded (and pleasant and well-paid) employment. This promise is false. The green jobs model is built on promoting inefficient use of labor. The studies favor technologies that employ large numbers of people rather than those technologies that use labor efficiently. In a competitive market, the factors of production, including labor, are paid for their productivity. By focusing on low productivity jobs, the green jobs literature dooms employees to low wages in a shrinking economy. The studies also generally ignore the millions of jobs that will be destroyed by the restrictions imposed by governments on disfavored products and technologies."
"Our economic plan will create new job opportunities and new business opportunities, protecting our natural environment. The reductions in the interest rates which we have seen already will free up tens of billions of dollars for responsible investments in this year alone.
The jobs package I have asked the Congress to pass contains—this has hardly been noticed, but it actually contains green jobs from waste water treatment to energy efficiency, to the restoration of our national parks, to investments in new technologies designed to create the means by which we can solve the problems of the future and create more jobs for Americans. Our long-term strategy invests more in pollution prevention, energy efficiency, in solar energy, in renewable energy, and environmental restoration, and water treatment, all of which can be found in the 5-year budget that we have presented to the Congress."
"You should be aware of the following facts:
Solyndra’s revenues grew from $6 million in 2008 to $100 million in 2009 to $140 million in 2010. For 2011, revenues are projected to nearly double again. ...
Solyndra is an example of a U.S. company using American innovation and ingenuity to compete in the global solar market – exporting more than 50 percent of our products into a competitive global marketplace that includes the products of Chinese and other companies which have the benefit of less restrictive business environments and significant government subsidies and incentives to support all aspects of their business."
"Government can help lay the groundwork on which the private sector can better generate jobs, growth, and innovation. After all, small business tax relief is not a substitute for ingenuity and industriousness by our entrepreneurs -- but it can help those with good ideas to grow and expand. Incentives to promote energy efficiency and clean energy manufacturing don't automatically create jobs or lower carbon emissions -- but these steps provide a framework in which companies can compete and innovate to create those jobs and reduce energy consumption. And while modernizing the physical and virtual networks that connect us will create private-sector jobs, they'll do so while making it possible for companies to more easily and effectively move their products across this country and around the world, and that will create more jobs."
"Solyndra’s executives are scheduled to appear before the House Energy and Commerce Committee. Despite earlier pledges to testify, these executives have recently announced that they will exercise their right to remain silent at Friday's hearing.
But regardless of the potential legal impropriety, there is no question that the fundamental laws of economics have been violated. The company’s rise and fall illustrates the folly of empowering government to pick winners and losers in our economy.
The president’s stimulus was premised on the faulty idea that 'Washington knows best,' and that bureaucracies can make better decisions than taxpayers, entrepreneurs, and businesses can. With respect to energy, this translated into tens of billions in new government subsidies for politically favored interests: $6 billion in loan guarantees for renewable energy investments, $2 billion for energy efficient battery manufacturing, and $17 billion for the Department of Energy’s energy efficiency programs.
Solyndra was the very first recipient of the Department of Energy’s stimulus-backed loan-guarantee program, and it has become a fitting public symbol of the administration’s new green-energy agenda."
"By picking winners and losers in the energy sector, the government-as-investor model distorts markets, weakens the rule of law, and fails to spur sustainable job creation. Instead of helping the economy, the story ends with taxpayers losing billions of dollars, successful companies losing their competitive advantage, and workers losing their jobs – in Solyndra’s case, 1,100 of them.
This is the ugly end of government’s adventures in crony capitalism."
"The Recovery Act and the growth of the renewable energy sector and green jobs are mutually exclusive. The $787 billion stimulus package signed into law on February 17, 2009, ended up costing $862 billion as reported by the Congressional Budget Office in January. It is important to understand that government spending of this magnitude cannot stimulate our economy. Every dollar the government spends attempting to force the market toward a specific sector is subject to taxation and must first be borrowed out of the economy. The result is a redistribution of existing purchasing power rather than the creation of new purchasing power. This spending unintentionally creates less economic activity than if the money had been left with capable private sector investors. Rather than using the hand of the government to tilt the playing field by forcing public investment in alternative energy projects, the removal of barriers to private investment would allow for more profitable and sustainable natural investment into these fields."
"A diverse national energy portfolio is crucial to economic health and stability. Such diversity, if economically sound, will occur naturally in the market without federal subsidies. Efforts by the government to pick winners and losers in the energy market almost always end up distorting the market. Green jobs will not reduce unemployment if they require significant government assistance. For example, wind and solar generated electricity currently enjoys subsidies almost 50 times higher per unit of energy output than traditional coal, and 100 times higher than natural gas. These subsidies take resources and jobs from other sectors of the economy."
"Research and experimentation in the field of nuclear chain reaction have attained the stage at which the release of atomic energy on a large scale is practical. The significance of, the atomic bomb for military purposes is evident. The effect of the use of atomic energy for civilian purposes upon the social, economic, and political structures of today cannot now be determined. It is a field in which unknown factors are involved. Therefore, any legislation will necessarily be subject to revision from time to time. It is reasonable to anticipate, however, that tapping this new source of energy will cause profound changes in our present way of life. Accordingly, it is hereby declared to be the policy of the people of the United States that, subject at all times to the paramount objective of assuring the common defense and security, the development and utilization of atomic energy shall, so far as practicable, be directed toward improving the public welfare, increasing the standard of living, strengthening free competition in private enterprise, and promoting world peace."
"Only 3 years ago plans were announced for the first private nuclear powerplant that would be competitive without any Government assistance. Since then, there have been more than 20 such installations announced by public and private utility companies. Orders have been placed for power reactors with a combined capacity of more than 15 million kilowatts--more than enough electric power for the homes of all the people of Idaho and seven other Western States.
By 1980, nuclear power units will have a capacity of more than 100 million kilowatts of electrical power--one-fifth of our national capacity at that time.
This energy is to propel the machines of progress; to light our cities and our towns; to fire our factories; to provide new sources of fresh water; and to really help us solve the mysteries of outer space as it brightens our life on this planet.
We have moved far to tame for peaceful uses the mighty forces unloosed when the atom was split. And we have only just begun. What happened here merely raised the curtain on a very promising drama in our long journey for a better life."
"The Nation's nuclear fuel supply is in a state of transition. Military needs are now relatively small but civilian needs are growing rapidly and will be our dominant need for nuclear fuel in the future. With the exception of uranium enrichment, the nuclear energy industry is now in private hands.
I expect that private enterprise will eventually assume the responsibility for uranium enrichment as well, but in the meantime the Government must carry out its responsibility to ensure that our enrichment capacity expands at a rate consistent with expected demands.
There is currently no shortage of enriched uranium or enriching capacity. In fact, the Atomic Energy Commission has substantial stocks of enriched uranium which have already been produced for later use. However, plant expansions are required so that we can meet the growing demands for nuclear fuel in the late 1970s--both in the United States and in other nations for which this country is now the principal supplier."
"One of the best potential sources of new electrical energy supplies in the coming decades is nuclear power. The United States has developed a strong technological base in the production of electricity from nuclear energy. Unfortunately, the Federal Government has created a regulatory environment that is forcing many utilities to rule out nuclear power as a source of new generating capacity, even when their consumers may face unnecessarily high electric rates as a result. Nuclear power has become entangled in a morass of regulations that do not enhance safety but that do cause extensive licensing delays and economic uncertainty. Government has also failed in meeting its responsibility to work with industry to develop an acceptable system for commercial waste disposal, which has further hampered nuclear power development."
"We believe many new nuclear construction projects will have difficulty accessing the capital markets during construction and initial operation without the support of a federal government loan guarantee. Lenders and investors in the fixed income markets will be acutely concerned about a number of political, regulatory and litigation-related risks that are unique to nuclear power, including the possibility of delays in commercial operation of a completed plant or 'another Shoreham'. We believe these risks, combined with the higher capital costs and longer construction schedules of nuclear plants as compared to other generation facilities, will make lenders unwilling at present to extend long-term credit to such projects in a form that would be commercially viable.
We also believe that the standby support 'insurance' (provided by Section 638 of the Energy Policy Act of 2005) is inadequate to address these risks and that a number of the conditions in DOE’s Proposed Rule for the loan guarantee program, if carried forward into the final regulations, would make that program unworkable for purposes of financing new nuclear power projects."
"To avoid serious and lasting distortion of the U.S. energy marketplace and an economically inefficient decarbonization effort, nuclear loan guarantees should be limited to the lead units of new nuclear plant designs, not previously deployed in the United States or in similar markets abroad with comparable regulatory requirements."
"In short, whether the nuclear industry survives is best left to the free market to decide. Only a full repeal of the Price-Anderson Act will allow for the internalization of all costs. The sophistic view that the act protects the public must end. That the act's function is to protect the nuclear industry is beyond question. The public, though, is best protected by a free-market energy policy that guarantees that each resource is placed in its highest-valued use."
"One of the reasons why the public turned against nuclear power last time round is that it found itself bailing the industry out. It would be wrong, not just for taxpayers but also for the industry, to set up another lot of cosy deals with governments. The nuclear industry needs to persuade people that it is clean, cheap and safe enough to rely on without a government crutch. If it can't, it doesn't deserve a second chance."
"Sure, nuclear power generates lots of electricity while producing virtually no carbon dioxide. But it still faces the same problems that have stymied the development of new nuclear plants for the past 20 years -- exorbitant costs, the risks of an accident or terrorist attack, the threat of proliferation and the challenge of disposing of nuclear waste.
The cost issue alone will mean that few if any new nuclear power stations will get built in the next few years, at least in the U.S., and any that do will require expensive taxpayer subsidies. Instead of subsidizing the development of new plants that have all these other problems, the U.S. would be better off investing in other ways to meet growing energy demands and reduce carbon-dioxide emissions.
In fact, the sheer number of nuclear plants needed to make a major dent in greenhouse emissions means the industry hasn't a prayer of turning nuclear power into the solution to global warming."
"Nuclear energy could transform how the nation produces energy. But one of the big problems with the success of nuclear power in the United States is not that it lacks subsidies but that the regulatory environment for nuclear power does not promote growth, innovation, or competition.
Assuming the permitting process works perfectly, it takes the Nuclear Regulatory Commission four years to permit a new reactor. That is too long. Furthermore, the commission is prepared to permit only one type of reactor, essentially limiting competition to a handful of companies and one technology.
Another regulatory obstacle is the nation's dysfunctional nuclear waste management strategy. The federal government has taken responsibility of nuclear waste (or used fuel) management, allowing nuclear power producers to largely ignore waste production--a critical element of the nuclear fuel cycle--when developing their business models. Because each nuclear technology produces a unique waste stream that has its own characteristics, some reactor types would be more attractive than others depending on how the waste was being managed. But so long as nuclear operators do not have to consider waste management, reactors with attractive waste characteristics can be ignored."
"In the early 1950s, U.S. Atomic Energy Commission Chairman Lewis Strauss trumpeted the prospect of nuclear electricity 'too cheap to meter.' An international competition to develop commercial reactors, orchestrated under President Dwight D. Eisenhower’s Atoms for Peace Program, ensued between the U.S., Russia, India, Japan, and much of Western Europe. Several reactors and nuclear fuel plants were designed and built, endless amounts of technology declassified and shared worldwide with thousands of technicians, and numerous research reactors exported in the 1950s. Yet, ultimately, the relative cheapness and abundance of oil and coal assured that only a handful of large nuclear power plants were actually built.
The next drive for nuclear power came in the late 1960s, just before the energy 'crisis' of the early 1970s. President Richard Nixon, in announcing his Project Independence, insisted that expanding commercial nuclear energy was crucial to reducing U.S. and allied dependence on Middle Eastern oil. France, Japan, and Germany, meanwhile, expanded their nuclear power construction programs in a similar push to establish energy independence. The U.S., Russia, Germany, and France also promoted nuclear power exports at the same time. Four thousand nuclear power plants were to be brought on line worldwide by the year 2000.
But, market forces — coupled with adverse nuclear power plant operating experience — pushed back. As nuclear power plant operations went awry (e.g., fuel cladding failures, cracking pipes, fires, and ultimately Three Mile Island), spiraling nuclear construction costs and delays, as well as the disastrous accident at Chernobyl, killed the dream. More than half the nuclear plant orders in the U.S. and almost 90 percent of the projected plants globally were canceled — including a surprisingly large number of proposed projects in the Middle East."
"Certainly, if nuclear power were ever truly too cheap to meter, could assure energy security, or eliminate greenhouse gas emissions economically, private investors would be clamoring to bid on nuclear power projects without governmental financial incentives. So far, though, private investors have shied from putting any of their own capital at risk. Why? They fear nuclear energy’s future will rhyme with its past. In the 1970s and 1980s, new nuclear power projects ran so far behind schedule and over budget that most of the ordered plants had to be cancelled. Even those that reached completion were financial losers for their original utility and outside investors, and the banking sector became wary."
"This history of strong government involvement has made the new government financial incentives to promote the construction of additional nuclear power and fuel-making plants seem normal. Yet, pushing such government support of energy commercialization projects, both nuclear and nonnuclear, actually flies in the face of what market forces would otherwise recommend. More important, it hides the full costs and risks associated with each energy option."
"Still uncompetitive despite 60 years of handouts, nuclear developers clamor for ever greater subsidies. The White House, Senate, and House all propose expanded federal loan guarantees ($36 billion was the White House figure); developers demand at least $100 billion. The Clean Energy Deployment Administration endorsed by both houses of Congress could issue unlimited loan guarantees without congressional oversight. It would probably fund nuclear and renewable energy like the recipe for elephant-and-rabbit stew—one elephant, one rabbit.
Bureaucrats, not credit markets, would evaluate risks and pick winners. Taxpayers would become America’s main energy financiers and almost exclusive nuclear risk-takers. America’s once market-based electricity investments would work like China’s, Russia’s, and France’s nuclear command economies. This is bipartisan folly."
"The nuclear industry is only able to portray itself as a low-cost power supplier today because of past government subsidies and write-offs. First, the industry received massive subsidies at its inception, reducing both the capital costs it needed to recover from ratepayers (the 'legacy' subsidies that underwrote reactor construction through the 1980s) and its operating costs (through ongoing subsidies to inputs, waste management, and accident risks). Second, the industry wrote down tens of billions of dollars in capital costs after its first generation of reactors experienced large cost overruns, cancellations, and plant abandonments, further reducing the industry’s capital-recovery requirements. Finally, when industry restructuring revealed that nuclear power costs were still too high to be competitive, so-called stranded costs were shifted to utility ratepayers, allowing the reactors to continue operating.
These legacy subsidies are estimated to exceed seven cents per kilowatt-hour (¢/kWh)—an amount equal to about 140 percent of the average wholesale price of power from 1960 to 2008, making the subsidies more valuable than the power produced by nuclear plants over that period. Without these subsidies, the industry would have faced a very different market reality—one in which many reactors would never have been built, and utilities that did build reactors would have been forced to charge consumers even higher rates."
"The cost of coal has become unbearably high. It places a great burden on our industrial and domestic life. The public welfare requires a reduction in the price of fuel. With the enormous deposits in existence, failure of supply ought not to be tolerated. Those responsible for the conditions in this industry should undertake its reform and free it from any charge of profiteering.
The report of the Coal Commission will be before the Congress. It comprises all the facts. It represents the mature deliberations and conclusions of the best talent and experience that ever made a national survey of the production and distribution of fuel. I do not favor Government ownership or operation of coal mines. The need is for action under private ownership that will secure greater continuity of production and greater public protection. The Federal Government probably has no peacetime authority to regulate wages, prices, or profits in coal at the mines or among dealers, but by ascertaining and publishing facts it can exercise great influence."
"There are a variety of circumstances in which government intervention in energy markets may improve market outcomes. Generally, government intervention has the potential to improve market outcomes when there are likely to be market failures. Externalities represent one of the most important market failures in energy’s production and consumption. Market failures in energy markets also arise from principal-agent problems and information failures. Concerns regarding national security are used to rationalize intervention in energy markets as well."
"Canada is on the edge of an historic choice: to diversify our energy markets away from our traditional trading partner in the United States or to continue with the status quo.
Virtually all our energy exports go to the US. As a country, we must seek new markets for our products and services and the booming Asia-Pacific economies have shown great interest in our oil, gas, metals and minerals. ...
Unfortunately, there are environmental and other radical groups that would seek to block this opportunity to diversify our trade. Their goal is to stop any major project no matter what the cost to Canadian families in lost jobs and economic growth. No forestry. No mining. No oil. No gas. No more hydro-electric dams."
"Numerous costly regulations have been proposed or implemented to address various environmental goals, from water quality to global warming. However, past experience-such as with the morass of gasoline regulations that push up the price at the pump and the requirements that have stopped construction of any new coal-fired power plants for the past 15 years-shows that mandates can be expensive and economically harmful while making only marginal progress toward environmental goals. The full cost of current and proposed regulations and mandates, including the economic and security impact, should be evaluated and compared with the likely environmental gain."
"When oil prices hit record levels, many people look for a scapegoat, and hugely profitable oil companies are an easy target. Even so, the typical political 'solutions' overlook the crucial role that market prices play in resource allocation, both among competing uses in different areas of the world today and among competing uses in different time periods (i.e. today versus the future). Contrary to popular belief, it is private sector professionals who will ensure an adequate supply of oil and other commodities for our descendants. It is the politicians—not the speculators—who are notoriously shortsighted and threaten to cripple our energy supply."
"The competitive private sector is best able to improve fuel efficiency and develop the next generation of fuels. There are many guesses as to what the 'new oil' might be, but no one knows for certain-least of all the federal government. We do know, however, that finding and commercializing these new fuels is crucially important to our economic future. The best way to secure abundant energy sources in the future is to encourage entrepreneurs to discover them, not for agencies and congressional committees to try to pick winners with directed research, regulations, mandates, and subsidies. Entrepreneurs need a regulatory, trade, and tax system that creates the best climate for private-sector innovation."
"The regulation of natural gas dates back to the very beginnings of the industry. In the early days of the industry (mid-1800s) natural gas was predominantly manufactured from coal, to be delivered locally, generally within the same municipality in which it was produced. Local governments, seeing the natural monopoly characteristics of the natural gas market at the time, deemed natural gas distribution a business that affected the public interest to a sufficient extent to merit regulation. Because of the distribution network that was needed to deliver natural gas to customers, it was decided that one company with a single distribution network could deliver natural gas more cheaply than two companies with overlying distribution networks and markets. However, economic theory dictates that a company in a monopoly position, with total control over its market and the absence of any competition will typically take advantage of its position, and has incentives to charge overly-high prices. The solution, from the point of view of the local governments, was to regulate the rates these natural monopolies charged, and set down regulations that prevented them from abusing their market power."
"Energy consumption per real dollar of gross domestic product has dropped dramatically over the past 60 years and will continue to do so if we allow business to innovate rather than stranglehold them with regulations and mandates. Motives of cost reduction and increased profits go hand in hand with becoming more energy efficient. If a company can find a way to reduce its energy use, it can lower costs and thus the price to consumers. Consumers will respond by buying better products and services. Forced reduction in energy use, on the other hand, can cause forced reduction, which reduces product performance, features, reliability, and longevity.
More importantly, government subsidies are not needed to purchase more energy-efficient products. A government survey of the Environmental Protection Agency’s Energy Star labeling program, which identifies energy efficient products, found that 62 percent of households were either 'very likely' or 'somewhat likely' to buy the product without the government handout. In effect, this means 38 percent felt the energy savings were not worth the additional cost of the product.
It should be the consumer’s choice, and the government shouldn’t try to dictate that choice by using our taxpayer dollars to subsidize a portion of the cost."
"In the short-term, the economic impacts of incorporating the social costs of energy sources into the prices individuals and firms pay would be significant. Utility bills and the price paid at the pump would increase, making our current quality of life more expensive and adding costs to energy-intensive industries. On the other hand, current and future Americans would be getting something back in the exchange. Indeed, the benefits to health, safety, and other economic and environmental factors that contribute to our quality of life are vast. Climate change endangers human health and safety and the environment, although there is some uncertainty as to the degree of damage that would occur. By reducing those risks, policy-makers hold the key to generating tremendous benefits through longer and healthier lives, an environment that poses fewer risks, and strengthened national security.
To create the most value for society, policy-makers could implement a new set of rules to help make sure that we pursue those energy policies for which the benefits to users and society as a whole exceed their true costs. These policies would all move us toward an approach to energy policy that no longer tilts the rules of the road in favor of energy sources that only appear cheap because their costs to our health, the climate, and national security are obscured or indirect. The result would be a system in which we leverage market forces to decide the best outcome based on full and accurate comparisons."
"The Voluntary Oil Import Program has demonstrated to me the willingness of the great majority of the industry to cooperate with the Government in restricting imports to a level that does not threaten to impair security. I commend them, and to me it is indeed a cause for regret that the actions of some in refusing to comply with the request of the Government require me to make our present voluntary system mandatory. ...
During the past few years, a surplus of world producing capacity has tended to disrupt free world markets, and, unquestionably, severe disruption would have occurred in the United States and elsewhere except for cutbacks in United States production under the conservation programs of the various state regulatory bodies.
The voluntary controls have been and the mandatory controls will be flexibly administered with the twin aims of sharing our large and growing market on an equitable basis with other producing areas and avoiding disruption of normal patterns of international trade."
"The most effective action we can take to encourage both conservation and production here at home is to stop rewarding those who import foreign oil and to stop encouraging waste by holding the price of American oil down far below its replacement or its true value.
This is a painful step, and I'll give it to you straight: Each of us will have to use less oil and pay more for it. But this is a necessary step, and I want you to understand it fully.
Excessive Federal Government controls must end. Phased decontrol will gradually increase the price of petroleum products. In the short run, it will add a small amount to our rate of inflation, but that is the cost we must pay to reduce our dependence on the foreign oil cartel.
In the longer run, the actions I'm announcing tonight will help us to fight inflation. Other nations will join and support us as we cut down our use of oil and increase our own production of energy. The foreign oil cartel will then find it harder to raise their prices. The dollar will grow stronger, and the prices we pay for many imported goods will be less. This will strengthen our economy and reduce inflation in future years."
"For more than 9 years, restrictive price controls have held U.S. oil production below its potential, artificially boosted energy consumption, aggravated our balance of payments problems, and stifled technological breakthroughs. Price controls have also made us more energy-dependent on the OPEC nations, a development that has jeopardized our economic security and undermined price stability at home.
Fears that the planned phaseout of controls would not be carried out, for political reasons, have also hampered production. Ending these controls now will erase this uncertainty.
This step will also stimulate energy conservation. At the same time, the elimination of price controls will end the entitlements system, which has been in reality a subsidy for the importation of foreign oil."
"Very shortly after taking office, I totally removed remaining regulations on the price, production, and distribution of crude oil and petroleum products. I did this in the sure confidence that the American people, acting through the market system, would move toward optimal means of production and consumption, and I have not been disappointed. Oil production has begun to increase after years of decline. Our efficiency of use of all energy, and especially oil, has increased significantly. In the first half of 1982, we produced more goods and services than in the first half of 1978, but used almost 20 percent less oil. Our imports of foreign oil have fallen by almost 2 million bbl/day since 1980, bringing our dependence on foreign oil to less than 30 percent."
"Given the global nature of oil markets and the increasing globalization of natural gas markets, willingness to pay market prices will secure all the energy a nation could possibly wish for during peacetime. Worries about producer blackmail are only a bit less far-fetched than worries about alien invasion. Simply put, reliance on oil and natural gas--imported or otherwise--is not the Achilles heel of the Western industrialized world."
"Unless there’s an economic cataclysm that sends the United States back to the 19th century, we’re probably going to be a net importer of energy for the foreseeable future. The largest share of our 'foreign oil' comes from those perfidious Canadians, not from the perfidious Arabs. Our dependence on imported oil is no more dangerous than our dependence on imported steel, sneakers, taxi drivers, microchips, capital (thanks, Beijing!), or cheap T-shirts from Vietnam. Capital is fungible, and that’s a good thing, though I confess I would enjoy a Republican campaign against 'our dangerous dependence on foreign bond investors' to finance congressional borrowing, with the serious goal of a balanced budget replacing the fraudulent goal of 'energy independence.'
'Foreign oil' alarmism is one of the dumbest themes in American politics, a yardstick of stupidity. Our relationship with the petro-emirates is a bigger problem for them than it is for us: There are lots of market players who want to sell us oil, but no other player in the market is positioned to replace American demand. If Americans stop buying as much oil, the Saudis are in a world of hurt. If the Saudis stop selling us oil, the Kuwaitis or the Norwegians or the Mexicans will be thrilled to take up the slack. And oil touches terrorism only tangentially: Box-cutters and underpants-bombing misfits are not expensive. The ritual denunciations of 'foreign oil' are a cynical appeal to public stupidity."
"The president apparently decided that the potential environmental risks are worth taking because of the benefits of energy independence--a nonsensical goal that would never be pursued by anyone who understands economics. We will never get energy policy right if our leaders continue to traffic in such silly misconceptions. Nobody ever talks about independence for other products. We don't care about automobile independence, or bottled water independence, or underwear independence. We avoid asserting that those would be worthy goals, for a good reason: Free trade enhances our welfare by allowing us to import products from those who have a comparative advantage producing them."
"Accordingly, subsidizing wind, solar, and nuclear power will do little to improve national security because those energy sources do not compete with crude oil and would not displace crude oil. Until plug-in cars are both available and economically attractive to consumers, building 100 new wind, solar, and nuclear power plants won’t reduce oil consumption by very much at all."
"Wind generates only when it is blowing, and it blows least when power is most valuable. At peak demand hours in 2006, wind plants in both California and Texas produced below 3% of their potential. To maintain reliability will require continued investment in full-scale backup generation. Wind generation is itself expensive even at today's fuel prices, it requires a massive federal tax credit to survive. A national policy that creates jobs in renewables destroys them elsewhere. Forcing people and businesses to buy expensive power leaves them less to spend on other goods and investments in future productivity."
"If biofuels are to succeed as a competitive fuel source, congressional legislation should not be necessary to mandate its production. Moreover, Congress should not force specific technologies on Americans, especially if they are unproven technologies. Instead, Congress should unleash the power of free enterprise, letting researchers and the markets discover the best new viable alternatives."
"Cap-and-trade schemes for reducing pollutants have a lot going for them. First, many businesses favor them. Second, we already have an American example of a similar market that works. Third, carbon markets are accepted under international treaties and already exist abroad. Fourth, most environmental groups like cap-and-trade systems because they set firm limits on actual emissions. And, fifth, in theory at least, the flexibility of carbon markets enables businesses to figure out the least expensive way to reduce overall emissions... The other option is to tax all kinds of carbon at the wholesale stage, as far upstream as possible. Utilities and refiners who take raw coal and oil as inputs would pay a tax on these fuels. The extra cost would get passed downstream to all subsequent consumers. Like prices for permits set in carbon markets, carbon taxes would encourage conservation and innovation. Since the tax is levied on how much carbon a fuel contains, it would make fuels like coal less attractive compared with low-carbon fuels like natural gas or even renewable energy like solar and wind power."
"The path to prosperity and environmental protection is not to be found in green utopian planning, throwing taxpayer dollars at green-tech peddlers or piling on green regulations. It’s not to be found in a mentality of 'use less energy, have less goods, buy less things, live in smaller spaces, be less, live less, do less.'
Instead, prosperity and environmental protection are created by accepting and facilitating people’s natural desire to live larger lives: lives of greater prosperity, harnessing greater amounts of energy, enabling people to buy more houses, goods, education, clothing, food, entertainment and more.
What’s needed to get the economy back on its feet is less wasteful government spending, less government tinkering with the energy economy, limiting regulations to the mitigation of clear and present dangers, minimizing the costs of regulatory compliance and unshackling the free-enterprise energy economy that drove the American economy to heights other countries could only envy.
Markets, not mandates, are the path to a more prosperous, environmentally protected future."
"It’s not uncommon to hear free market/small government advocates criticize seemingly failed attempts at creating a viable solar power industry in the US and point to the need for a free market as the reason. But in reality, these American solar companies are often losing out to Chinese solar power companies who are more, not less subsidized by their own government. ...
In other words, China is spending MORE in R&D than we are (not just as a percentage of their GDP, but more in total). So the idea that government subsidies somehow distort market signals and the free market is the correct vehicle for this up and coming industry is refuted by the very examples these proponents like to cite."
"But our best opportunities to enhance our energy security can be found in our own backyard -- because we boast one critical, renewable resource that the rest of the world can’t match: American ingenuity. American ingenuity, American know-how.
To make ourselves more secure, to control our energy future, we’re going to have to harness all of that ingenuity. It’s a task we won’t be finished with by the end of my presidency, or even by the end of the next presidency. But if we continue the work that we’ve already begun over the last two years, we won’t just spark new jobs, industries and innovations -- we will leave your generation and future generations with a country that is safer, that is healthier, and that’s more prosperous."
"Changes in the wake of the tragic Deepwater Horizon accident have resulted in new regulations to improve safety and to require industry to demonstrate its response and containment capabilities, as well as a new regulatory organization. However, the magnitude of the slowdown indicates the need for regulatory capacity and responsiveness commensurate with the level of investment that companies are prepared to commit to oil and gas exploration and production operations in the post-moratorium environment."
"According to the U.S. Energy Information Administration’s study of subsidies to the energy industry completed last July, the federal government in 2010 gave out $37 billion of taxpayer monies, more than double the amount given away in 2007. Biofuels received $6.6 billion, wind received $5 billion, solar and biomass each received $1.1 billion, coal received $1.3 billion while oil and gas received subsidies of $2.8 billion. The balance went to conservation projects and low income housing upgrades.
The efficiencies (or lack thereof) of these subsidies were measured by Phil Kerpen who noted that subsidies per kilowatt hour produced were
$0.63 for natural gas
$0.64 for coal
$52.00 for wind and
$968 for solar.
Kerpen was clear: 'It’s not just renewables. Subsidies for fossil fuels are also wrong…because central economic planning is always wrong. Technologies should succeed or fail on their merits in a free market that empowers consumers to make decisions, not politicians and bureaucrats who think they know better. Washington’s attempts to interfere in the market almost always fail.'"
"How do bets about the future price of oil affect current oil prices? They can do so if and only if those bets increase or decrease oil supply in the here-and-now through changes in inventory or production.
If the price for crude oil tomorrow — thanks to the speculators — is higher than the cost of crude oil today plus the cost of storage, then everyone (investors, refineries, your Uncle Phil) could make money by buying crude in the spot market, storing it somewhere, and guaranteeing its higher selling price through the purchase of a futures contract. This would reduce current supply and increase current price while increasing future supply and decreasing future price.
If this is going on we would expect to see some sort of inventory buildup. While crude inventories in the U.S. are increasing, they always increase at this time of year, and this year's increase is well within the normal range. More important, gasoline inventories are decreasing and decreasing much more rapidly than normal. Hence, there's no evidence that speculators are reducing the supply of crude or gasoline through increased storage."
"The ethanol subsidy and import tariff are set to expire at the end of the month, but there are representatives in Congress that want to extend them even though CBO findings indicate that taxpayers pay $1.78 to reduce gasoline consumption by one gallon from ethanol made from corn and $3.00 for cellulosic ethanol made from energy crops such as switch grass, poplars, corn stover, and woodchips. The analogous cost for biodiesel is $2.55, but its subsidy ran out the end of 2009.
The cost to taxpayers for providing tax credits to biofuels to reduce carbon dioxide emissions is enormous: $754 per metric ton for corn-based ethanol, about $275 per metric ton for cellulosic ethanol, and $306 per metric for biodiesel. To put these numbers in perspective, it currently costs less than $15 a ton to purchase a certified carbon dioxide allowance traded on the European Climate Exchange."
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