Sorry, just couldn't resist that title.
Anyway, FoxNews.com carried an op-ed yesterday from two representatives of Americans for Prosperity, a fossil-fuels-funded group. Not surprisingly, it included misleading data on wind power's key incentive, the federal wind energy Production Tax Credit (PTC).
The source of the error is quite clear: analyzing only a single year of energy incentives is a poor way to judge the support afforded by the U.S. government to many kinds of energy sources for decades.
Consider a coal-fired power plant installed in 1965 and still generating electricity today. That power plant was subsidized when it was installed, and the mining and transportation of its fuel have been subsidized in the 45-plus years ever since. If you look at the plant's incentives in 2010, they are only a tiny slice of the total federal expenditure—the cost of the plant was amortized long ago.
Now consider a wind farm installed in 2008. The production tax credit it received in 2010 was part of the basis for financing its construction. Once that credit is used up (in 2017), it will receive no further incentives (because it uses no fuel). Comparing its incentives with those provided to a 45-year-old coal plant is comparing apples to oranges.
As we reported here a few months ago, a recently released report, “What Would Jefferson Do?”, from DBL Investors, a venture capital firm, is among the first and best attempts to take a less biased approach and make a true apples-to-apples comparison of federal incentives for fossil fuels, nuclear and renewable sources of energy. You can check the links provided for details, but two quick highlights really tell the story:
– Through 2009, oil and gas had received more than 75 times the total cumulative dollar amount of federal subsidies that renewables have ($447 billion vs. $6 billion, see below).
– The report found that “current renewable energy subsidies do not constitute an over-subsidized outlier when compared to the historical norm for emerging sources of energy. For example: … the federal commitment to [oil and gas] was five times greater than the federal commitment to renewables during the first 15 years of each [subsidy’s] life, and it was more than 10 times greater for nuclear.”
Fact check: Globalwarming.org ignores energy incentive history, December 19, 2011
Fact check: Loris stumbles on subsidies, December 13, 2011
Schwarzenegger calls for level energy playing field, December 6, 2011
Fact check: Pompeo and Labrador miss mark with subsidy bill, December 1, 2011
Fact check: Chesser misinforms on wind incentives, October 19, 2011
Wind incentives: Leveling the playing field, August 17, 2011