Fossil Fuel Subsidies

[jebatty]

It's not uncommon I get kick-back from people who object to the subsidies given renewable energy, who then argue that renewable energy would never succeed without those subsidies. In nearly the same breath they roil if a counter statement is made that oil, gas and coal are heavily subsidized, and perhaps these need to be removed so all energy sources will have a level playing field. I came across this most comprehensive review of fossil fuel subsidies I've seen in one location. Interesting reading. Fossil Fuel Subsidies

 

[Doug MacIVER]

well known info on a heavily subsidized business. question should be renewable subsidies vs. fossils. just how heavily subsidized are the renewable. quote from Forbes

"Global fossil-fuel subsidies do exceed those for renewables in raw dollars—$523 billion to $88 billion, according to the International Energy Agency. But the disparity is reversed when proportion is taken into account. Fossil fuels make up more than 80% of global energy, while modern green energy accounts for about 5%. This means that renewables still receive three times as much money per energy unit.

But much more important, the critics ignore that these fossil-fuel subsidies are almost exclusive to non-Western countries. Twelve such nations account for 75% of the world’s fossil-fuel subsidies. Iran tops the list with $82 billion a year, followed by Saudi Arabia at $61 billion. Russia, India and China spend between $30 billion and $40 billion, and Venezuela, Egypt, Iran, U.A.E., Indonesia, Mexico and Algeria make up the rest.

These subsidies have nothing to do with cozying up to oil companies or indulging global-warming skeptics. The spending is a way for governments to buy political stability: In Venezuela, gas sells at 5.8 cents a gallon, costing the government $22 billion a year, more than twice what is spent on health care."

here is chart from the same article

this relative new industry needs help to grow, how much and how long? disclosure starting to explore home solar because of hearth.com and subsidies being offered. I wish I could have found a more updated chart. tough info to find as it really looks at the question differently.

 

[woodgeek]

I think the whole 'who has more subsidies' thing is a big distraction.

I actually agree with Doug points...FF subsidies are mostly in state budgets for political reasons (buying votes/stability) AND subsidies to RE are higher on a BTU delivered basis.

That said, Doug forgot any mention of 'externalities', state funded cleanups of used FF sites, medical bills for those poisoned, weakened and given cancer by FF exposure.....

1. -----------------------------------------------

So, much of the politics in my lifetime (I'm 46) has been driven by violent crime and the fear of violent crime. We, in these free united states, incarcerate a larger proportion of our population than any other major country on earth. How much does that prison and legal system cost? What is the cost in human lives and human potential?

Fun fact: you have kids, and they get blood tests for lead. Turns out that the level in 2014 that is considered dangerous (requiring $ medical treatment and immediate home remediation/relocation) is well BELOW the median lead level of US kids in 1975! Public health professionals are still sorting out the effect of this massive experiment we did on all our children for a generation....controlled lead poisoning. Current thinking is that it reduced the average IQ of my entire generation by 5 points, and made many of us much more prone to impulsive behaviors like violent behavior and drug use!

Now in 2014 violent crime rates, drug use (and teen pregnancy) have been plummeting for more than a decade, after peaking in the 1980s and 90s well above any historical period in the US.

Guess what....all that is a FF externality that Doug forgot to include. We put lead in gasoline simply because it made for a higher octane rating, and higher profits for oil cos and auto manufacturers. Oops.

2. ----------------------------

A third of our national trade deficit over the last decade was oil imports. Most of our enemies for the last two decades have been funded by oil money. I don't need to mention the cost in blood and treasure over the last two decades for oil. All more FF externalities.

3. ----------------------------

I have a friend who used to be a class action lawyer. He told me that there are numerous studies that show cancer clusters around gas stations. That is, you can look at cancer incidence nationwide, and it correlates CLEARLY with the proximity of your home to the nearest gas station. When the underground tanks get refilled....the vapor in the head space get's vented to the air making a big plume. This is well known to the EPA, but of coure they can't ban gasoline.....so what did they do?

--they required steep reductions of the amount of benzene in gasoline. (one hypothetical cause of the problem)
--required vapor capture equipment on fill hoses.

that all folks. Cancer is one of the big three killers of Americans, science shows that gasoline is a major source, decades ago, and it is NOT common knowledge, nor is there much work on fixing it, because, you know, oil.

Just another FF externality.

 

[jebatty]

WG, in part what you are saying is that while subsidies may be a distraction, the fact of not including externalities in the pricing is even a bigger distraction: blind the public to the real cost and set up a red herring to insure the distraction. Opinions and beliefs aside, what may be the most expensive externality is climate change from buildup of CO2.

 

[Doug MacIVER]

not much disagreement with your point, but does expand the discussion. civil action against one of my former suppliers W.R. Grace was huge. a point it happens in other industries. of course there aren't tanneries on every corner but industrial pollution is obviously out there.

subsidies for re has got to be there for it's survival and fairness to the industry. ff because they've got it in their blood here and worldwide as Forbes pointed out. as I asked before for how long and how much. as usual I go to my crutch, cape wind. I just don't like directly subsidizing it. part of the reasoning in my exploring solar.my tax dollars are a different story. they subsidize a lot of stuff I don't like, but out of sight out of mind. some subsidies have a longer life than the rocks in my yard, once they get into an industry they never stop.

 

[woodgeek]

Yeah, a civilized society tries to find cases of dangerous pollution and regulate them out of existence. Well-run companies with anything other than short time mindsets want to survive, and are active participants in consumer safety, but sadly, most industries can't be trusted to watchdog themselves. Its an esential govt function.

Regarding subsidies, I'll give props to the right. By providing a check on the left, only the most worthy and justifiable subsidies get funded in the US. The wind, PV and EV subsidies are very lean compared to the European model, and are pay as you go (rather than creating huge costs in future budgets) and usually have 'caps' that limit them in case they are too successful. And yet they are successful, creating whole new service companies, small businesses and manufacturing industries across the US. They improve US balance of trade and energy security and engage our most innovative and ambitious young people doing something useful other than selling each other more complicated financial instruments.

Speaking for myself, I have seen the studies that make it clear that PV and on-shore wind make decent returns, when sited properly, without subsidies. If analysis shows that a small subsidy helps to grow that organic potential a lot faster than would happen otherwise, great. Let's grow the opportunity before another country seizes it. In contrast, a large subsidy will often lead to mal-investment...siting RE resources where they work less well, or their profitability (w/o subsidy) is unlikely.

In this lens, the federal onshore wind, residential PV and EV purchase subsidies are all small, and are helping to stimulate what will become gigantic, profitable industries (w/o subsidies) 10-20 years from now.

Conversely, it seems that a lot of PV investments overseas, and solar thermal in the US in the 70s were heavily subsidized, and became expensive boondoggles and crashed when the money ran out, leaving a lot of mal-investments....solar thermal systems that never worked well, shaded PV systems in Spain, etc. A lot of subsidies have performance checks....my house retrofit would not be eligible for cheap financing if the blower-door did not improve by 15%, my EV has to have a minimum electric range to qualify, PA solar rebates require <30% shading to be eligible, etc.

All seems pretty common sense to me.

And I've said before, Cape Wind is a fiasco.

 

[Doug MacIVER]

have enjoyed our discussion, as usual I always learn something from them. have a day, what is left of it, and enjoy tomorrow.

 

[Doug MacIVER]

sorry this doesn't belong anywhere. only in America

this guy was leaving the country and running to Bermuda? rescued by uscg?

 

[EatenByLimestone]

What the heck is that?

 

[Doug MacIVER]

What the heck is that?

the person inside was recued by the uscg, running to Bermuda?

 

[woodgeek]

probably could've made it to the Vineyard.

 

[Doug MacIVER]

yup just got back to Falmouth with the kids, have a day (sorry that ended up on this thread, it just hit me. then when the coast guard saved him ?????????????????)

 

[EatenByLimestone]

I think I would have left him out there. It has to be natural selection to put yourself in a floating hamster wheel and go on a 60 mile minimum run across the Gulf Stream.

 

[begreen]

That picture belongs in the Inglenook, not derailing the thread.

WG makes right on points. There is little accounting for the externalities like medical complications and cleanups that these industries spawn.

 

[woodgeek]

An interesting article on externalities....what is more likely to kill you, a car crash or car exhaust??

http://grist.org/cities/whats-more-likely-to-kill-you-a-car-crash-or-vehicle-emissions/

A lot of numbers in a rambly article, but it appears that on a US national level the risks are about equal, but crashes kill younger peole and exhaust kills older people, so maybe the crashes are still a bigger problem (in terms of years lost).

In urban areas, however, the calculation is much more lopsided and exhaust is much more likely to kill you than collisions.

 

[Doug MacIVER]

Maybe there will be further improvement with the china/usa climate deal? certainly while O is still in office the epa will rain even more rules upon us. china doesn't cap for 15 years whereas we reduce another 25%. maybe we'll out live them?

 

[woodgeek]

Maybe there will be further improvement with the china/usa climate deal? certainly while O is still in office the epa will rain even more rules upon us. china doesn't cap for 15 years whereas we reduce another 25%. maybe we'll out live them?

We're discussing the deal in the other thread....but China's and the US's challenges are very different....under their end of the deal, China needs to field enough new zero-carbon electricity generation in the next 15 years to RUN the entire US grid. Hardly a free ride. But their emissions will still grow....you need to start somewhere.