Loren Steffy (Houston Chronicle) to Pew Environmental Group: "So What?" About China’s Renewable Energy Policy
“Instead of the fear-baiting warnings that the U.S. is being outspent on renewables [by China], a better question might be: what are we getting for our money?”
- Loren Steffy, “Scrubbing the Data on Clean Energy Investment,” Houston Chronicle, March 27, 2010.
Loren Steffy is the most read and respected voice at the Houston Chronicle on business and related policy issues, the paper’s editorial board notwithstanding. And on energy, he smells a rat with the ‘clean energy’ mantra that comes on high.
Steffy has documented the role of Enron in the government-created Texas wind power boom. He deconstructed the all pain-no gain nature of the House-passed Waxman-Markey cap-and-trade bill before the rest of the country caught on. And most recently, he has called out the non sequitur of a new study, “Who’s Winning the Clean Energy Race,” recently released by the Pew Charitable Trusts via the Pew Environmental Group.
The Pew study tries to shame the U.S. (us) into throwing good money after bad by further subsidizing uneconomic, unreliable wind and solar–the very energies that the marketplace cannot support without the heavy hand of government. The exception is off-grid solar, indicating that renewables are more of a bridge fuel to nonrenewables than the other way around.
Some Hard Questions
The Pew Environmental Group is dedicated to one-sided climate alarmism. It is thus part of a one-two punch with the Pew Center on Global Climate Change, which has been of long interest here at MasterResource.
The Pew Center has admitted that “settled science” is a misnomer in the physical-science climate debate. But they have never commissioned a study critical of climate alarmism despite momentum toward the “skeptics” side in recent years. Eileen Claussen, the head of the Pew Center, has recognized that binding targets are a nonstarter in the developing world. (Adaptation, anyone?)
But with the bits of good here and there come something much different–such as the Pew Charitable Trusts. Here are some questions I have to add’s to those of Loren Steffy (reprinted below).
If the argument is that the U.S. should follow the leader, then why didn’t the study mention the “greenest” U.S. company of them all–Enron? Ken Lay’s company rescued the domestic wind industry and aggressively invested in solar (assets since taken over by GE and BP, respectively). Enron’s shenanigans also involved its “‘green” energy efficiency services, which were unprofitable except for accounting tricks. The experience of Enron Energy Services is important to question the silver bullet of energy efficiency as a government strategy for a low-carbon energy future.
Secondly, why didn’t Pew consider that China’s central energy planners are hurting their people with their green imaging? China’s new investment is predominantly coal, which is the right way to go, considering the need for a developing country to maximize its energy sector relative to unfulfilled demand.
Here is another question–and one I pose to the study authors: For every person that receives (intermittent?) energy from wind turbines or solar panels, how many more people could receive reliable power from a diesel generator or a coal plant? In an opportunity cost perspective, wind and solar produces not only energy but phantom energy–foregone or lost energy per dollar spent.
Pew Center: Time to Disband?
The Pew Charitable Trusts is increasing their bet on climate alarmism, not decreasing it as merited by intellectual and political developments. I believe that the trend should be just the opposite where the Pew Environmental Group trues up its mission and reports on non-alarmist studies as well as alarmist studies. And then there is the Pew Center on Global Climate Change.
Should time be up for the Pew Center after a 12-year run? (Enron was an early member of this collective, by the way.) Should the board of the Pew Charitable Trusts continue to fund this safe harbor for corporate rent-seekers?
To Pew, is the highest form of capitalism political capitalism? Is corporate welfare the way to go in public policy in general and climate policy in particular?
And what about donor intent? Would Joseph N. Pew and wife Mary Anderson Pew, who founded the philanthropy in 1948, approve of what is being done in the areas of energy and climate policy, particularly in light of recent developments on a variety of intellectual and political fronts?
What could the Pew charities do–what is the ‘opportunity cost’–of the several-million-dollar annual budget of the Pew Center on Global Climate Change? What human needs in America or abroad are not being met because of this open spigot for climate alarmism?
Sadly, the Pew Center’s activities mean that other donors (including those that fund my Institute for Energy Research) must spend money to counter their propaganda, which doubles the loss to real philanthropy and/or the savings and investment that fuels increased productivity and economic growth.
Loren Steffy’s Column
Back to Loren Steffy (his blog is here). I reprint his column in full for posterity–and with the (faint) hope that the Pew Charitable Trusts will end their futile crusade for climate alarmism and climate policy that–by the alarmists’ own math–will not appreciably affect climate.
Here is Steffy’s Scrubbing the Data on Clean Energy Investment:
A new study shows the U.S. is falling behind China in its investment in clean energy technology. Our investment in wind, solar and other feel-good energy initiatives totaled $18.6 billion last year, dropping us to a distant number two behind China’s $34.6 billion, according to the study by the Pew Charitable Trust.
The study has been bandied about the Internet and supported by inflammatory quotes like this from CNN:
“The United States’ competitive position is at risk in the emerging clean energy economy,” Phyllis Cuttino, director of the Pew Environment Group’s Global Warming Campaign, said in a statement.
But a key question is being overlooked: So what?
China’s energy consumption is growing faster than any other country on earth. If it has any hope of keeping up with that demand, it’s going to have to outspend every other country on the planet, both in renewables and in conventional energy.
In other words, the numbers don’t address the scale of the investment. Despite it’s increased spending on renewables, coal remains China’s fuel of choice, and it’s spending far more on coal development than anything else. For example, in late 2008, China announced a plan to invest more just on new railroads to transport coal from the northern Shanxi province than the U.S. last year invested in renewable fuels.
The Pew study doesn’t account for government research grants or corporate research and development spending. In the U.S., that number is about $7 billion. It’s not clear what the corresponding number is for China. But we know that the Chinese government is willing to throw money around regardless of whether projects make economic sense.
It provided huge subsidies to solar panel manufacturers as part of a program to generate 20,000 megawatts from solar sources by 2020. That, as the New York Times pointed out last year, is less than half the capacity of coal-fired plants that China builds each year.
In other words, just because China is spending more doesn’t mean it’s actually getting any lasting benefit.
But perhaps most important, despite all the dire warnings that the U.S. is falling behind, the Pew study is rather selective in its data. It doesn’t include investments in natural gas, a clean fuel that’s affordable and abundant in the U.S.
Instead of the fear-baiting warnings that the U.S. is being outspent on renewables, a better question might be: what are we getting for our money?