A Thought on Energy Subsidies

If there is a central theme to the Renewable Energy Finance Forums generally, it’s pragmatism.  You can listen to every word from the presenters — as well as from each the other participants as they network on breaksbetween the marathon sessions — and trust me: there isn’t so much as a breath of idealism.  The show isn’t about what should happen, it’s about what will happen. 

I had lunch the other day with an incredibly bright guy, a verypractical physicist whose business characterizes materials for companies in solar, wind, and electric transportation — as well as dozens ofother industries.  I immediately saw that he was lukewarm on renewableenergy.  “I’m here to drum up business, but I’m reluctant to beconnected with an industry that relies on subsidies,”  he sneered.

When I pointed out that oil and gas get 12 times the subsidies thatclean energy receives, he looked down at his arugula sheepishly andreplied quietly,” Well, I guess what I meant to say is ‘subsidies that might go away.’”

Those few words encapsulate the root of the clean energy problem. Not only are the subsidies for fossil fuels enormous, they are taken for granted; they’re so well entrenched that they’re completely invisible.  Contrast that to the mountain that is made out of the relatively smalltax credits and government grants under TARP and ARPA-E to stimulatedevelopment of clean energy. 

I have to hand it to these oil companies for the deftness with whichthey’ve soaked us for everything we’re worth.  The checks that wetaxpayers write to them every day go completely unnoticed. These peoplehave taken larceny and elevated to the plain of art.  The lesson here is clear and simple: we must not underestimate the skill of the peoplewe’re playing against.



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