It is great to see that we finally have some national unity on energy policy. Unfortunately, the unifying idea is so ridiculous, so unworthy of the people aspiring to lead our nation, it takes your breath away. Hillary Clinton has decided to line up with John McCain in pushing to suspend the federal excise tax on gasoline, 18.4 cents a gallon, for this summer’s travel season. This is not an energy policy. This is money laundering: we borrow money from China and ship it to Saudi Arabia and take a little cut for ourselves as it goes through our gas tanks. What a way to build our country.
When the summer is over, we will have increased our debt to China, increased our transfer of wealth to Saudi Arabia and increased our contribution to global warming for our kids to inherit….
We have no energy strategy. If you are going to use tax policy to shape energy strategy then you want to raise taxes on the things you want to discourage — gasoline consumption and gas-guzzling cars — and you want to lower taxes on the things you want to encourage — new, renewable energy technologies. We are doing just the opposite.
Are you sitting down?
Few Americans know it, but for almost a year now, Congress has been bickering over whether and how to renew the investment tax credit to stimulate investment in solar energy and the production tax credit to encourage investment in wind energy. The bickering has been so poisonous that when Congress passed the 2007 energy bill last December, it failed to extend any stimulus for wind and solar energy production. Oil and gas kept all their credits, but those for wind and solar have been left to expire this December. I am not making this up. At a time when we should be throwing everything into clean power innovation, we are squabbling over pennies.
These credits are critical because they ensure that if oil prices slip back down again — which often happens — investments in wind and solar would still be profitable. That’s how you launch a new energy technology and help it achieve scale, so it can compete without subsidies.
The Democrats wanted the wind and solar credits to be paid for by taking away tax credits from the oil industry. President Bush said he would veto that. Neither side would back down, and Mr. Bush — showing not one iota of leadership — refused to get all the adults together in a room and work out a compromise. Stalemate. Meanwhile, Germany has a 20-year solar incentive program; Japan 12 years. Ours, at best, run two years.
“It’s a disaster,” says Michael Polsky, founder of Invenergy, one of the biggest wind-power developers in America. “Wind is a very capital-intensive industry, and financial institutions are not ready to take ‘Congressional risk.’ They say if you don’t get the [production tax credit] we will not lend you the money to buy more turbines and build projects.”
It is also alarming, says Rhone Resch, the president of the Solar Energy Industries Association, that the U.S. has reached a point “where the priorities of Congress could become so distorted by politics” that it would turn its back on the next great global industry — clean power — “but that’s exactly what is happening.” If the wind and solar credits expire, said Resch, the impact in just 2009 would be more than 100,000 jobs either lost or not created in these industries, and $20 billion worth of investments that won’t be made….
In 1997, said Resch, America was the leader in solar energy technology, with 40 percent of global solar production. “Last year, we were less than 8 percent, and even most of that was manufacturing for overseas markets.”
Apr 30, 2008
Oct 29, 2008 at 10:06 pm
Great article. We just suck. We lacked the leadership and long-term thinking that they seem to have the in Western Europe. We haven’t had leadership since Eisenhower suggested the interstate system and JFK said we’re going to the Moon. Our energy policy is a joke. Recently I heard Bobby Kennedy Jr. state that are “gas prices at the pump are around $10-$12 a gallon and the rest is hidden in our taxes.” When oil prices were sky high people started buying sensible cars and got rid of their giant trucks and SUVs. Now that demand for oil has gone down because we’re in a recession, the speculators are running for the hills and oil prices had dropped in half. But now that that’s happened, people started buying big pickups again. How shortsighted and stupid are we? I guess infinitely. Well I’m sticking to my Volkswagen new beetle diesel. It gets close to 60 MPG, has great pickup, carries four people comfortably (plus some luggage) and in my opinion it kicks butt compared to the Prius.
We need to get a clue, have a plan, and stick to it. This will require a great leader and next week we’re gonna pick one. I hope it works out.
The future of our nation’s energy will come from a variety of sources. Ethanol’s role in this future is yet to be determined. But we do need some sources of energy that will bridge the gap from the old to the new and buy us time until we are able to fully develop these new sources of energy. Sources of energy will increasingly come from renewable energy and therefore decrease our reliance on fossil fuels such as Petroleum Products.
Conservation and technological improvements will reduce our total energy demand. Reduction in reliance on the automobile combined with improved gas mileage (80 mpg and greater) can reduce fuel use by a factor of four. Currently advances in wind, solar, geothermal and energy conservation show great promise. It has also been suggested by many politicians that the United States should build many more nuclear power plants. It is also hoped that fusion power, which is technically feasible although approximately 25 years in the future, will be another source of clean power.
It’s too bad that our ethanol research and development, policy, and production is a joke.
“Nor is all ethanol created equal. In Brazil, ethanol made from sugar cane has an energy balance of 8-to-1 — that is, when you add up the fossil fuels used to irrigate, fertilize, grow, transport and refine sugar cane into ethanol, the energy output is eight times higher than the energy inputs. That’s a better deal than gasoline, which has an energy balance of 5-to-1. In contrast, the energy balance of corn ethanol is only 1.3-to-1 - making it practically worthless as an energy source. Corn ethanol is essentially a way of recycling natural gas,” says Robert Rapier, an oil-industry engineer who runs the R-Squared Energy Blog.
We really need to get rid of the powerful corn lobbyists and use a more efficient source like sugar cane and sugar beets because I believe that ethanol should play a role here.
Heaven help us.
JCE
johnceberhardt.wordpress.com