A Free-Market Energy Blog

Renewable Energy Trouble: Energy Reality Meets Budget Reality

By Robert Bradley Jr. -- August 1, 2011

“It is clear that solar and wind are competitive in many situations right now.”

Joe Romm, Climate Progress, April 21, 2011.

“If it wasn’t clear before it is crystal clear now that the people pushing a massive government spending program for clean energy are living on ‘Another Earth’.”

– Joe Romm, Climate Progress, July 28, 2011

In April, Joe Romm at Climate Progress reiterated his claim that politically correct renewable energies are well on their way to competitive viability–if not there already. Now, with business-as-usual federal subsidies for wind and solar at risk, there is fear and loathing at Climate Progress (Romm’s bully blog at the Center for American Progress).

Mad Joe Romm is extra mad at Obama and the WHOLE budget debate–as if record, unsustainable budget deficits were not reality. The idea of government running out of other people’s money is a foreign concept for him and others who see a sovereign nation as creating its own fiscal reality. After all, a political junta would not allow this to happen, right?

In America’s welfare state, it is now energy entitlements versus human-need entitlements. Energy is now in the same boat with all of the other chronically ill welfare programs.

‘Debt of a Salesman’: Romm vs. ‘Obama Democrats’

Here is what Romm is saying in his post: Debt of a Salesman: Obama, Democrats Poised to Embrace Deal that May Slash Energy, Enviro Spending for Many, Many Years:

In one of the biggest strategic blunders of his presidency, Obama has bought into the erroneous Republican frame that the biggest problem facing this country is our national debt.  Worse, he has chosen to be a salesman for a centrist agenda of austerity, not the progressive one of investment….

I doubt most climate hawks and progressives outside of the DC Beltway fully appreciate what the emerging debt deal would likely mean for energy and environmental spending over the next decade.  As E&E News (subs. req’d) bluntly explains this morning:

As the capital’s debt-limit drama enters its final act today, the last two solutions standing — one Democratic, one GOP — would slash long-term energy and environmental spending to a degree comparable with the fiscally austere deal struck to avert a springtime federal shutdown….

I think it is even worse than that for a couple of reasons.

First, Obama would seem to have accepted the dreadful GOP position that we can only raise the debt ceiling with an accompanying deal that lowers the future debt by the same amount.  And, on top of that, he’s bought into the notion that revenue increases (aka tax hikes) are at most one third of the debt reduction.  Even worse, the deal that seems inevitable now has no revenue increases whatsoever.  If  you were wondering whose bluff got called, that pretty much tells  you everything you need to know.

Second, energy and environmental spending are not the most sacrosanct elements of nonmilitary discretionary spending.   Talking Points Memo has this headline today

Whatever The Outcome Of The Debt Vote, The Age Of Austerity Is Here

….  If it wasn’t clear before it is crystal clear now that the people pushing a massive government spending program for clean energy are living on “Another Earth.”  The only plausible scenario now for seriously addressing US greenhouse gas emissions in a way that would enable a global deal and give us some chance of averting catastrophic multiple, simultaneous climate impacts is for a serious carbon price to be part of the post-2012-election budget deal (see “Bombshell: High and rising price for carbon pollution emerges as credible deficit reduction strategy“).  And it ain’t that plausible unless Obama becomes as much a salesman for that approach as he has for debt reduction in general….

A big new energy tax increase? Who is living on “Another Earth”?

Romm ends his diatribe:

During the campaign, Obama was a pretty good salesman for progressive values and policies.  In his first two years, Obama was a lousy salesman, but he was still for the most part pursuing those values and policies — at least until he walked away from the climate bill  with nary a speech.  Now, day in and day out he is a salesman for debt reduction.  We traded in “Change we can believe in” for Ross Perot.

But Why Worry? Joe Recently Said ….

Here is what Dr. Romm asserted just three months ago:

“It is clear that solar and wind are competitive in many situations right now — see Wind now on even playing field with gas and Solar costs may already rival coal.  And continued aggressive deployment along with continued R&D will keep driving the price down (see Energy Sec. Chu sees “wind and solar being cost-competitive without subsidy with new fossil fuel” by 2020).”

MasterResource examined Romm’s exaggeration in the context of other forecasts made since the 1980s that wind and/or solar were well on their way to viability. The insinuation? Special government favor would not be needed in an approaching future.

Wrong! This is why government-dependent renewable energies are running scared. As I wrote in a recent Washington Times op-ed:

Federal cutbacks have put wind and solar on the spot. Despite decades of promises, these energy sources remain uneconomic and misaligned with the need for reliable, flexible power. Left unsubsidized and without mandates, electricity generated from wind or solar would not find nearly enough buyers.

Meanwhile, deficits rage and voters want fiscal sanity. Can you imagine the opinion-poll results if respondents were asked to choose between spending fewer taxpayer dollars on renewable energy or basic government services? I doubt the American Wind Energy Association or the Solar Energy Industries Association would commission such a poll.

I concluded:

Could this be the beginning of the end of the energy welfare state?

The anti-market environmentalists have only themselves to blame for their current predicament. They picked the wrong horse, or, more accurately, they picked the donkey to run against the horse. The meager flow of energy from solar and wind could never match the dense energy content of oil, gas and coal.

The future belongs to the efficient. The faster government-dependent energy gets cut down to size, the better it will be for the U.S. Treasury, for consumers and for the real energy entrepreneurs and capitalists.

Let’s start now.


  1. Jon Boone  

    No one should get too exercised by the national debt ceiling Kabuki theatre in Washington these days, where the Mandarins of energy exchange masks with Administration policy wonks, Congressional senshi, and media warlords–while the plot is loose and more than silly, sacrificing drama to highlight acting talent.


  2. john  

    Apparently S&P was just ‘joking’ about the credit downgrade..



    Which is where we get back to the fun. THE FUN. Because as it turns out, that whole $4 trillion thing…. S&P was only kidding. “It appears that the perception Standard & Poor’s seemed to harbour, that the U.S. needed to find a $4trn sized package in order to keep its triple A rating, is unfounded.

    I believe that the carbon tax will be back on the table soon for the purpose of deficit reduction (althought it will be sold under other auspices).


  3. rbradley  

    And Joe Romm fusses some more today at Climate Progress: http://thinkprogress.org/romm/2011/08/01/284274/debt-be-not-proud-lame-deal-cements-cement-shoes-on-energy-investment/.

    Come on Joe–time to take the training wheels off your favorite energies and see how they ride.


  4. john  

    I saw this headline and am unable to access the article..

    U.S. developer seeks buyer for 550 MW wind portfolio


    An East Coast developer is exploring strategic alternatives, including an outright sale, of a 550 MW portfolio of wind development projects. …

    If anyone knows who this is let me know…


  5. Mark Heslep  

    In price comparison discussions here of (say) solar versus fossil, what is the considered opinion on how to price in the pollution costs of fossil, especially coal. (No I don’t mean CO2, but the usual: SOx, NOx, mercury, radioactivity, etc)


  6. rbradley  


    To what extent is the externality internalized by the existing and to come regulations governing the same? With air quality trends improving across the board, surely the externality has been internalized by a combination of regulation and technological progress. I will leave it to others to tell me how much was each….


  7. Jon Boone  

    There are many ideas about how to capture economically the social and environmental costs of fossil fuels, including coal–from those of the IPPC to Greenpeace, from NREL to the NRDC. You can do a quick Google search to see part of this spectrum. A few years ago, the NAS estimated that coal’s environmental damage alone costs $62 billion annually; I’m sure people have already factored this amount into a “real” price for coal on a per kWh production basis. I’m assuming you’re referring to coal’s negative aspects. On the other hand, a proper accounting should consider the many positive aspects of fossil fuels, particularly since about 70% of our electricity generation comes from burning fossil fuels (imagine the problem if we burned–uh–wood, which was the primary carbon source for millennia). When I calculate electricity’s overall benefits to humankind, in terms of personal and community health, quality and quantity of life, education, mobility, etc, it occurs to me that the benefits rather substantially outweigh its liabilities. Which is why it remains so popular, here and around the world.

    It wasn’t long ago, less than a generation in fact, when groups that now vehemently oppose coal were its most ardent supporters: the Democratic Party, the Sierra Club, Audubon, among many others. This irony should not be lost because of an impoverished knowledge of history.

    In any event, an economic comparison between solar and, say, coal, makes sense only if the two resources had relatively equal status as modern power providers. Although solar in general has more firm capacity than wind (which has none), compared to coal it is merely a poseur. Therefore , trying to make sense of such an argument is akin to trying to make people think that a soap box derby vehicle could, one day, later than sooner perhaps, achieve functional economic parity with a fleet of Mack trucks. If we were in the freight hauling business, this wouldn’t make any sense at all. As it doesn’t in the electricity sector.


  8. john  

    The Carbon Tax Revenue Menu


    Getting the politics to align for a carbon tax requires the right blend of honey and vinegar. For years, advocates’ and opponents’ attention alike has focused on the vinegar – the tax part. Lately, though, we’ve noticed growing interest about how to best spread the honey — the potentially huge revenues a carbon tax would generate. Here’s a primer on the options: what they are, how they would work, their merits and drawbacks, and who’s pushing them hardest……

    …….The allure of carbon tax revenue also offers a growing incentive for other nations to match a U.S. carbon tax in order to avoid WTO-sanctioned border tax adjustments, capturing the revenue themselves…….

    ……. Rep. Chris Van Hollen (D-MD) also introduced a cap & dividend bill in the Ways & Means Committee. It relies on a cap to set the CO2 price indirectly, aiming for 85% reductions (over 2005 levels) by 2050. Because of its similar emissions trajectory, we’d expect Van Hollen’s bill to generate similar revenue to Rep. Larson’s bill: roughly $80 billion in the first year, rising to about $600 billion within a decade.


  9. john  

    It’s On: CBO Fielding VAT Questions From Congress


    Elmendorf declined to specify which members and said he has yet to field an official request to study a VAT tax. The CBO is in the process of figuring out how best to study a VAT tax’s impact, sorting through various structures employed by other countries. Elmendorf also declined to estimate what a VAT tax level would need to be to cover the 2020 debt, which the CBO predicted will be 90 percent of GDP.

    Pelosi says new tax is ‘on the table’



    “Somewhere along the way, a value-added tax plays into this. Of course, we want to take down the healthcare cost, that’s one part of it,” the Speaker added. “But in the scheme of things, I think it’s fair look at a value- added tax as well.”

    Pelosi said that any new taxes would come after the Congress finishes the healthcare debate consuming most lawmakers’ time, and that it may come as part of a larger overhaul to the tax code.


  10. rbradley  


    Climatewire this morning says that carbon taxation is not going to be part of any budget deal. Tax reform to eliminate special energy provisions maybe; carbon tax no.



  11. john  

    Although the budget deal may not, it’s on the ‘super committee’ radar.



    But if the committee fails to present a deficit-reduction package by Nov. 23, the day before Thanksgiving, or if Congress deadlocks and fails to pass the plan or enacts less than $1.2 trillion in cuts by Dec. 23, across-the-board spending cuts would be triggered to make up the difference between the committee number and the $1.2 trillion savings goal. Those automatic cuts would largely affect defense spending, a top priority for Republicans, and Medicare, a favorite program of Democrats, creating a strong incentive for both parties to reach a deal and pass the bill.

    The math works out and politically they are not going to raise taxes as promised, just create new ones. They (super committee)are charged with that authority. I expect by Thanksgiving they will announce a Carbon tax and a VAT. To be politically expedient any such rule/law might be delayed like parts of Obamacare was (2014).


  12. Mark Heslep  

    Robert –
    “… surely the externality has been internalized by a combination of regulation and technological progress.” ??

    Coal scrubbers, efficiency requirements and the like have certainly internalized *some* costs of coal pollution from what it was decades ago, when, for instance in the WWII era Baltimore pollution blacked out the sun midday. As the older plants are gradually taken off line I’m sure you are correct that emissions will continue to improve, but only to a point. Recognize that a harmful amount of sulphur dioxides, nitrogen oxides, ash, radioisotopes, mercury, etc are forever going up the stack even from the best plants; they must given burn rate of some 2 million tons of coal per *day* in the US. That is simply the physics of burning impure hydrocarbons in a nitrogen oxygen atmosphere. There is a cost imposed on society for those emissions which has a commonly measured actuarial harm. Solar PV does not impose such a harm. PV may not capable of replacing coal plant baseload, but PV use can easily increase much further than the couple of GWe produced today before baseload is an issue.

    [1] See for example http://www.ucsusa.org/clean_energy/coalvswind/c02c.html
    Granted UCS may be agenda driven and biased but even assuming exageration these numbers harmful
    per plant:
    19kt SO2
    10kt NO2
    500t particulates
    220t hydrocarbon VOCs
    170 lbs mercury


  13. Mark Heslep  

    Jon –

    I don’t accept your assertion that “compared to coal [PV] is merely a poseur”.


  14. john  

    Solar has issues.


    This company has since closed it’s doors and moved to China.


  15. Mark Heslep  

    I think ‘how much is enough is a good question’ is a good question. I’d answer with another, “how much trash should we tolerate thrown over each other’s fences?” The answer it seems to me is that we price these scenarios, so that nobody gets decide on their own that, well, the process creating the trash is important so don’t bother me about it. Off hand I’d add 2-3 cents / kwh to coal for pollution that goes, perhaps, back to the community, I don’t know, but some kind of mechanism that allows the community to lay a price premium on coal compared to cleaner power like nuclear or solar PV.


  16. rbradley  

    Two issues: different studies will show a range of costs that have or have not been internalized–it is not objective but subjective.

    Government is involved, right? What is the ‘gov’t failure’ versus the market failure where you would not want to correct the market failure?

    Reliable, affordable electricity is a social good, not only a private good. How much is the positive externality?

    Can you imagine life with only wind turbines and solar panels??


  17. Jon Boone  

    If solar ever becomes controllable and dispatchable, perhaps with storage systems (which I think unlikely at industrial scale), then we can discuss a comparison between coal and that energy diffuse technology. As it is, solar makes the most sense locally, for a variety of functions–heating water, moving traffic (in very sunny climes), among others. But even here maintenance problems make it nettlesome.


  18. Mark Heslep  

    Why the frequent resort to the ‘ imagine … only solar’ false dilemma? Yes storage is an issue, but for now need only be concerned with 10-20% solar share of the grid in the next decade or two, and, as per Robert’s article, the price comparison today. In any case I expect shale gas, which doesn’t emit ash and mercury and SOx, etc, will likely take care of replacing coal over time in any case.

    In the long term for wide spread use I agree the storage issue for PV is a serious technical hurdle, the diffuse energy argument strikes me as canard given the vast land area of the US already under use which is taken for granted. Replacing the equivalent of the just the silly (it seems to me) US corn ethanol acreage of some 40K sq miles, for example, with solar PV at 40W/M^2 average would generate (average, not just peak) some 74 Quad BTU’s, enough to replace not just the entire US electrical output but all of the other US energy needs theoretically converted to electric power (transportation, heating, industrial) totaling ~35-40 Quads.


  19. Mark Heslep  

    Apologies, I don’t seem to be able to edit mistakes in the blog box: Rev 2:

    The ‘ imagine … only solar’ is not the case I require, a false dilemma. Yes storage is an issue, but for now we need only be concerned with a (say) 10-20% solar share of the grid in the next decade or two which new storage tech doesn’t prevent. Meanwhile, today, per Robert’s article let us consider the price comparisons and externalites on fossil fuels. In any case I expect shale gas, which doesn’t emit ash and mercury and SOx, etc, will likely take care of replacing coal over time in any case.

    I agree that in the long term for wide spread use the storage issue for PV is a serious technical hurdle. However, the diffuse energy argument strikes me as canard given the vast land area of the US already under use which is taken for granted. Replacing the equivalent of the just the silly (it seems to me) US corn ethanol acreage of some 40K square miles, for example, with solar PV at 40W/M^2 average would generate (average, not just peak) some 74 Quad BTU’s per year, enough to replace not just the entire US electrical output but all of the other US energy needs, theoretically converted to electric power (transportation, heating, industrial) totaling ~35-40 Quads per year.



  20. Jon Boone  

    I once heard a geologist comment that there are a trillion dollars worth of diamonds just under the earth’s surface. However, he said, it would take many trillions of dollars to bring them to market. Converting the energy of sunlight to modern power given present knowledge would require a ginormous leap of faith and an incredible amount of surface area. We have much yet to learn–perhaps from trees….


  21. Mark Heslep  

    I suppose the term ‘incredible’ is inevitably subjective. But we can at least insist on consistency. The land requirements of a solar PV powered US future are incredible only if the land requirements of existing corn ethanol are incredible (40k sq mi), existing building roof top area is incredible (6600 sq mi), the size of *one* US military base (WSMR – 3300 sq miles) is incredible, the total US road area which is larger than many states is incredible, and so on.


  22. Jon Boone  

    Since I think, with many others, that corn ethanol is one of the largest energy scams in history–misusing and degrading so much land in ways that decrease our food supply, increase prices, promote world hunger, and damage equipment–it is “incredible,” that is, not to be believed–that so many have been so bamboozled for so long by the confederacy of dunces and thieves responsible. What ethanol is to the transportation sector, wind is to electricity. And solar, at industrial scale, isn’t much of an improvement, although it does have some capacity. Its supporters do have audacity, similar both in degree and kind, to the audacity of hope, to coin a phrase….


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