The Case against Any Energy Subsidies

In the December 19 issue of Chemical and Engineering News, Jeff Johnson reports on a long history of US energy subsidies. The report is based on a historical study performed by Yale University economists, who concluded that the study finds a paucity of government support for a new energy sources compared with past government subsidies to gas, oil, and coal.

It is interesting that to make the statement, the Yale economists compare 15 years of expenditures for renewable subsidies with 91 years of subsidies for oil and gas. We have here the usual problem of figures don't lie, but liars figure. I need to also point out the faulty logic of complaining about subsidies for something which obviously should not be subsidized. We have ample reserves of oil, gas, and coal, all of which can be harvested to give an energy cost considerably lower than that obtained from "new energy sources". When the Yale people talk about "new energy sources", they mean renewable sources, which are agriculture-based. This presently includes ethanol from corn, with "pie in the sky" hope that we can eventually obtain significant ethanol from cellulosic materials, such as grass. We can actually do this now, but the cost far exceeds that of energy from traditional sources. This is also true of ethanol from corn, which requires continuing subsidy to make it market-competitive with gasoline.

Over the years we have spent a tremendous amount of money on agricultural subsidies. By the same logic, which Yale uses, should we now be subsidizing dandelion research?

I'm not solely criticizing subsidization of energy from renewable sources. I am criticizing subsidies for energy from any source, be it wind, solar, coal, oil, gas, or manpower. We have market forces, which will decide which of those is the most competitive form of energy. We do not need taxpayer money injected to confuse the situation, based upon one or a few people's ideas of the best approach. Market forces are determined by a preponderance of the population. It is industry's job to make available various choices for consumer judgment. It is not government's responsibility to be involved.

Some say that the people don't have the foresight to see that we will eventually run out of fossil fuels, and that is up to government to look toward the future. This is an erroneous conception. Before the discovery of oil, only coal was a legitimate fossil fuel. Candles were made from beef tallow and heating was primarily done with wood. There was no air-conditioning. After the discovery of oil and the continued development of coal usage, beef tallow and wood were unable to compete, in order to give us the modern day conveniences we have. Need I mention that beef tallow and wood are renewable sources.

More significantly, government did not foresee the discovery of oil, nor did it foresee the availability of nuclear energy. Government is not all-seeing. However, it can, with its superior attitude, fleece the American public from hard-earned dollars to foster ridiculous programs.