The Spotlight

House of Cards: Which Energy Source is the Deck Really Stacked Against?

  23 Apr 2015  |    

It’s a common refrain of fossil fuel interests that renewable energy’s very existence relies on government subsidies; that renewables are somehow the lucky favorite of a government “picking winners and losers.”

This is categorically untrue, largely because government influence in the energy sector is not a new phenomenon.

From 1918 – 2009, the oil and gas industry alone enjoyed $446.96 billion in government support.1
DBL Investors, September 2011
Renewables have received just $5.93 billion in government support since the clean energy industry began taking advantage of the PTC in 1994. Expand the timeframe, and you’ll see the same thing. From 1950 – 2010, fossil fuels received nearly 3 times more in government support than renewables.2
Management Information Services, October 2011

Although renewable energy is a relatively new industry, it hasn’t been able to receive the sort of consistent policy support that fossil fuels enjoyed in their nascency. The portion of the federal budget committed to fossil fuels was 5 times greater than the commitment to renewables during the first 15 years of each subsidies’ life. Meanwhile, the 12 subsidies on the books for fossil fuels will cost us over $40 billion over the next decade3
Brookings Institute, February 2013
– even though that industry is obviously well established at this point.

However, fossil fuel interests aren’t entirely wrong when they claim our current energy policy fosters an uneven playing field. In fact, they’re correct. The deck is stacked. But the beneficiaries are fossil fuels.

Leave aside the century of government subsidies that fossil fuels have enjoyed. Leave aside the fact that the Production Tax Credit – by far the largest piece of federal policy support for renewables – has expired 6 times in the last 17 years. More than anything, the deck is stacked against renewables because they get no credit for the auxiliary benefits they bring, and fossil fuels pay nothing for the harm that comes with their deployment.

The carbon emitted by oil, gas, and coal usage is the chief contributor to climate change and all the economic destruction it wreaks. But because there is no market structure to build the cost of those carbon emissions into the final price of fossil fuels, the cost is essentially hidden – making the price of fossil fuels artificially low.

The same holds true for the non-carbon emissions of fossil fuels, which have a significant, negative impact on public health. These health impacts cost us anywhere from $361.7 to $886.5 billion annually.4
Environment International, February 2013
Plus, fossil fuels use a significant amount of water, our most valuable resource. In fact, U.S. power plants consume 4 times more water than U.S. residences do.5
Union of Concerned Scientists, November 2011
I have no idea what fleek is, but fossil fuels are most certainly not on it.

Compare all that to renewables, most of which emit no carbon, do not negatively impact public health, and withdraw very little water, if any at all. 6
National Renewable Energy Laboratory, March 2011

But again, there are almost no federal incentives in place to build these significant societal benefits into the cost of renewables. Likewise, all of the indirect harm wrought by fossil fuel usage goes unaccounted for. Despite all that, it might not matter in the long run. Renewables are already reaching cost-parity with fossil fuels in America, even without subsidies.7
Lazard, September 2014

Still, the idea of a system stacked against fossil fuels, one of the dominant industries in American politics for over a century, is laughable. If any energy industry is "mooching" off the government, it sure as hell isn't renewables.

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