Somewhere deep in the recesses of the American Congress are people who actually talk about arcane topics like, oil, drilling, and energy. These are the people who can place a moratorium on domestic oil drilling, AND remove it with just a vote…subject to a presidential veto, of course.
Hard to believe with the insanity that is the Middle East right now, but in the USA, the world’s leading producer of oil and natural gas, it is illegal to export oil. That’s right, we can drill it, but oil needs to stay at home. In mid-September, the House Energy and Commerce Committee passed HR-702 which would lift the ban on crude oil exports. The bill is due to go to the House floor later this month.
In the larger scheme of things, this would make a lot of sense. After all, “peak oil” is meaningless as more and more oil reserves are found world wide. We in America have lots of oil. Why not allow it to be sold overseas? Well…see, in the whole energy ball of wax, oil gets mixed in with some not so efficient forms of production, and THOSE industries have some pretty powerful friends on Capitol Hill.
In fact, wind energy production has been subsidized since 1992 per kilowatt hour produced via something called the “Production Tax Credit“. The initial tax credit was for ten years and has been renewed with some carrots in the offing. So, not only is that energy sold on the open market, but we the taxpayers are paying the producers to produce it whether or not it is sold at a profit. Nice work if you can get it. Realistically, then, there is no real market force determining wind’s efficiency as a source of energy.
The same is true for solar energy. That industry receives an “Investment Tax Credit” that pays it for inefficient energy production. From The American Spectator:
The PTC costs taxpayers billions of dollars each year. Americans pay for wind twice: first in their federal tax bills, then in their local utility bills. According to a new study, commissioned by the Institute for Energy Research, electricity generated from new wind facilities is between three and four times as expensive as that from existing coal and nuclear power plants,.
The Senate Finance Committee claims a two-year extension would cost $10 billion over the next decade. After decades of subsidies and multiple PTC extensions, wind still generates less than 5 percent of our electricity.
So, why, given that coal and nuclear plants are far more efficient, and the fuel is abundant against a debt that’s climbing higher than Sir Edmund Hilary on Mount Everest, doesn’t Congress ditch the subsidies? Because Democrats in the SENATE want them – and Republicans don’t have the votes to go around them.
According to the Hill, Senator Ed Markey (D-MA) said he could consider lifting the ban “only if it’s tied to a permanent extension of the wind and solar tax credits.”
The wind lobby has been working to find a way to get their gravy train tax credits extended and they think they’ve found it – the bill that would lift the oil export ban. The question is how likely are the Republicans going to get the handful of Democrats needed to break ranks and get this past a filibuster?
Naturally, getting the tax credits extended fits in with Barack Obama’s environmental agenda and the “legacy” he is desperate to create before leaving office, despite the nasty side effects of wind turbine infrasound for all living creatures and a huge percentage of the nation’s bats perishing in the wind turbine blades. Then there’s the birds frying in the heat generated by thousands of tiny mirrors facing the sun. All for what, 5% of the energy needed to run the country?
Buried in hundreds of pages of “analysis,” the Environmental Protection Agency projects the wind industry will add more than 13 GW of electrical capacity each year from 2024-2030. For context, 13 GW is exactly how much capacity wind added in 2012, a record year. It is also the year in which rent-seeking wind barons rushed to build as many new turbines as possible to qualify for the PTC, which expired at the end of the year. The following year, after the PTC expired, wind additions collapsed by more than 90 percent—which highlights the fact that the wind industry cannot survive in a free market.
So, we would be handing out tax credits to double the production of a form of energy that makes humans and animals in the vicinity sick AND kills birds of all sizes just to keep it afloat for carbon offset purposes when the whole carbon emissions argument is in the process of being debunked. Oh, yeah, that makes sense.
There you have it. The trade off in getting crude oil exported sounds an awful lot like holding out for more cash for wind and solar energy that cannot compete at market levels. That’s called propping up an industry. And given that the industry is not essential for national security, that’s adding pork to the budget.
[Insert head banging here.]
Don’t forget this from July:
From Warren Buffett, “We get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”