Archive for October 4th, 2010

Don’t cap, subsidize: Wind industry needs to become cost competitive

October 4, 2010

By Steve Milloy
The Gazette (Cedar Rapids, IA), October 3, 2010

It’s terrific that Sen. Chuck Grassley wants to help out Iowa’s wind industry, but does he have to sell out the rest of the state in the process?

Last week, Sen. Grassley co-sponsored a bill (S.3813) to establish a national renewable electricity standard (RES), legislation that Sen. Harry Reid (D-NV) has indicated he would try to make the consolation prize in this Congress’ final lame duck-clash over global warming regulation.

Despite his co-sponsorship, Sen. Grassley is rightly wary of Sen. Reid’s gambit and told the media that unless more than a handful of Republicans also sign on to the bill, “I’m not going to be a part of one or two Republicans, get 60 votes, so they can have a partisan victory.”

What is RES and why should Sen. Grassley not go down the RES road at all?

An RES would require that electric utilities generate a set percentage of their power from so-called “renewable” power sources, like solar and wind, by a certain date. The disastrous-for-House-Democrats Waxman-Markey cap-and-trade bill passed in June 2009, for example, would require that utilities generate 20 percent of their power from renewables by the year 2020. S. 3813 would reduce the Waxman-Markey standard to 15 percent.

But even a 15 percent RES would be quite the monumental challenge given that solar and wind power provide less than 2 percent of current electricity generation and require massive subsidies to do so. According to the Department of Energy, solar and wind are each subsidized at a rate 55 times that of coal, 97 times that of natural gas and 15 times that of nuclear power.

Solar panels and windmills aside, it’s only the taxpayer wallet that makes these forms of energy “renewable.”

But even cost is not the main reason for rejecting the arbitrary targets and deadlines of a national RES.

Imagine a utility that generates 100 percent of the electricity it sells by burning coal or natural gas. Impose the S. 3813 RES standard on that utility and, all of a sudden, only a maximum of 85 percent of its electricity can be generated by fossil fuels. In other words, the utility’s use of fossil fuels has been capped — the result would be skyrocketing energy prices.

Since the passage of the Waxman-Markey bill, Americans have been up in arms against cap-and-trade. As Sen. Grassley recently observed “If we pass cap and trade we’d export all of our jobs, manufacturing jobs to China.”

But the same reasons for opposing cap-and-trade can and ought to be applied to RES, which ought to be labeled as calling cap-and-subsidize.

Under cap-and-trade, electric utilities would be compensated for higher generation costs by charging consumers more for electricity and by selling billions of dollars of carbon credits, which they received for free courtesy of taxpayers. Under RES, electric utilities would be similarly compensated for higher generation costs, courtesy of over-charged consumers and untold billions in taxpayer subsidies.

So the difference between RES and cap-and-trade is merely a change in form, not a change in substance of an economy-killing consumer/taxpayer rip-off.

None of this is to dissuade Sen. Grassley from trying to help Iowa’s wind industry, which is the second largest in the U.S. – but that path forward is much different than a job- and economy-killing cap on fossil fuel use.

The first step forward for wind entrepreneurs is to push for tax and regulatory policies that will restart economic growth. A growing economy requires more energy, thus enlarging the opportunities for renewable technologies. Next consumers who value renewable electricity should be allowed — not forced — to purchase it at whatever price the market will bear.

The renewables industry should also be encouraged to look for niches where its technologies are competitive with conventional energy technologies. Finally, like all other business enterprises, the renewable energy businesses should look for efficiencies that make its products more cost competitive.

Many in the renewable energy sector have gotten lazy and have decided that hiring lobbyists is easier than innovating and competing. Sen. Grassley should work to help the latter and to discourage the former.

Steve Milloy publishes and is the author of “Green Hell: How Environmentalists Plan to Control Your Life and What You Can Do to Stop Them” (Regnery 2009).

Sony, Kyocera bail out of violent climate video outfit

October 4, 2010

Sony and Kyocera Mita are no longer listed as sponsors of the violence-advocating 10:10 climate group. (h/t Paul Chesser)

Click here to see the letter we sent the companies last Friday.

In addition to Sony and Kyocera leaving 10:10, Caterpillar, ConocoPhillips, Deere & Co., Xerox and Marsh & McClennan have abandoned the U.S. Climate Action Partnership (USCAP).

Is corporate support for the green agenda melting faster than the Arctic ice cap?