What hath the greenies wrought?
overlooks that the U.S. already subsidizes solar power to the tune of $24.34 a megawatt hour, according to an Energy Information Administration study based on 2007 data. That compares with subsidies of $23.37 that year for wind, 44 cents for coal, 25 cents for natural gas and $1.59 for nuclear power. We'd expect the subsidy gap would be even greater today between solar and wind power and other energy sources.Beyond the taxpayer cost, Mr. Resch and his industry special-pleaders appear to want the U.S. to emulate the Chinese model of state-supported capitalism. So if the Chinese want to allocate capital to politically well-connected industries at the expense of the larger economy and citizenry, then we should punish Americans too.
The economic landscape is littered with solar ventures going belly up, following the path of ethanol plants of a few years ago that started declaring bankruptcy as overexpansion fueled by government mandates and subsidies took its eventual toll. But bureaucrats and politicians have a short memory, farm states are important in Presidential elections, and Iowa is the Mecca for aspiring Presidential candidates who must pledge fealty to the corn farmers. Some citizens are apparently more important than others.
The United Nations benchmark index hit a record high last month, raising fears of shortages and higher prices that will hit poor countries hardest. So why is the United States, one of the world's biggest agricultural exporters, devoting more and more of its corn crop to . . . ethanol?The nearby chart, based on data from the Department of Agriculture, shows the remarkable trend over a decade. In 2001, only 7% of U.S. corn went for ethanol, or about 707 million bushels. By 2010, the ethanol share was 39.4%, or nearly five billion bushels out of total U.S. production of 12.45 billion bushels. Four of every 10 rows of corn now go to produce fuel for American cars or trucks, not food or feed.This trend is the deliberate result of policies designed to subsidize ethanol. Note the surge in the middle of the last decade when Congress began to legislate renewable fuel mandates and many states banned MTBE, which had competed with ethanol but ran afoul of the green and corn lobbies.
Prices are soaring around the world as food becomes unaffordable for millions of people. Indeed, the unrest sweeping the Middle East is in no small measure due to food shortages and price rises, according to the current issue of Business Week. The Middle East is the most dangerous area in the world; unrest there sends tsunamis across the rest of the world. The fallacy of the greenies mandating more ethanol use -- taking corn out the mouths of people and animals that provide us protein (eggs, meat, milk) -- is clear. So are the motivations of politicians doing their bidding, and the bidding of corn farmers and their lobbyists.
This damage coincides with a growing consensus that ethanol achieves none of its alleged policy goals. Ethanol supporters claim the biofuel reduces U.S. dependence on foreign oil and provides a cleaner source of energy. But Cornell University scientist David Pimentel calculates that if the entire U.S. corn crop were devoted to ethanol production, it would satisfy only 4% of U.S. oil consumption.The Environmental Protection Agency has found that ethanol production has a minimal to negative impact on the environment. Even Al Gore, once an ethanol evangelist, now says his support had more to do with Presidential politics in Iowa and admits the fuel provides little or no environmental gain.Not that this has changed the politics of ethanol. When consumers didn't buy enough gas last year to meet previous ethanol mandates, the Obama Administration lifted the cap on how much ethanol may be mixed into gasoline to 15% from 10%. Presto! More ethanol "demand." On Friday the EPA greatly expanded the number of cars approved to use the 15% blend. Last month, Congressmen whose constituents benefit from this largesse tucked into the tax bill an extension of the $5 billion tax credit for blending ethanol into gasoline.
Because with so much natural gas available and it being so cost effective to get out of the ground, and given the fact that natural gas burns much less carbon dioxide, why would anyone need wind farms or solar panels ? "[A]bundant and cheap natural gas will undercut the rationales for investing in and deploying more expensive renewable energy technologies, e.g., solar and wind," explains Ronald Bailey at Reason.com. Oh and one more important point, there's no shortage of gas.Next time you read or hear some environmental argument against shale gas extraction, ask yourself if maybe the source of that criticism has a vested interest in another form of alternative energy.
In other words, follow the money -- an argument I have made numerous times in my own coverage of green schemes.