Should the government stop providing subsidies to all energy sources, eg, coal, oil, solar and wind?

Yes

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by Gene Denardo

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Energy subsidizes of any kind to any industry, whether oil, coal, wind or solar, are simply transfers of wealth from the pockets of the working citizens to Resource and Energy Corporations. They serve no practical purpose other than bolstering the bottom lines of these companies and interfering with consumer choice.

The entire United States electrical system is a study in subsidy and market intervention. For the most part, all large power plant projects, including dams and nuclear plants, have been either directly paid for and built by the Federal Government often through the Army Corp of Engineers, or been highly subsidized. The electrical grid system, the fairly inefficient collection of nationwide power lines that transfer electrical power from centralized power plants to far away cities and towns, was constructed by the Government.

Once knowledge about electricity became commonplace, it was only a matter of time until people would "demand" that they were able to utilize this wonderful product. But, this in no way predetermines that bringing electricity to the citizen couldn't have been accomplished much more efficiently through the "free market". In fact, if done in that manner, we would be eons ahead of the situation we find ourselves in today; burdened with a fundamentally flawed and energy wasting system. A true market would only compensate efficiency and low cost, not inefficiency and the seemingly unlimited finances of the taxpayer.

Electricity is at its best when it is produced and consumed in relatively close distances. Our grid system utilizes huge power plants, planted many miles from the destination of the power. It is then transported at extremely high voltage over a very expensive but insufficient web of wires to its distant goal; homes and businesses. The further electricity travels, the more waste occurs as heat because of the inherent friction known as resistance. It is estimated that up to one third of the original electrical power is wasted before it gets to its final destination.

These large subsidized power plants are also very inefficient and waste up to half of the fuel consumed. This is primarily due to the fact that when Government enters the market, they have no need to compete. They cannot experience insolvency because of a bad or inefficient decision. Well, at least not yet! So, using taxpayer funds responsibly and competitively is not a concern.

Subsidies to all the Resource Energy Corporations, those that market our coal, oil, gas, wind or solar, are futile. They are allegedly done to create "energy independence" and "self-sufficiency" and this couldn't be further from the truth. Once the subsidy is absorbed by the corporation, that is the last the taxpayer sees of it. Unless you "fix" the consumer price of the product, a subsidy is simply that; a transfer of cost from one party to another. In the case of energy subsidies, the taxpayer bears costs that should be the liability of the producer.

Do these subsidies transfer to a "lower price" to the consumer of these energy products? If you received a payment that subsidized part of your normal costs of operation, is there any reason you would voluntarily lower your final price? Instead, you needn't worry about "inefficiencies" in the production process as you now have a much larger profit margin to cover items that would normally be of a concern in a more competitive market.

The taxpayer experiences a "double-whammy" in that many of the subsidies come in the form of below market access to public lands that hold these resources. What could be a tremendous boost to the United States Treasury, revenue and royalties from public land, instead becomes a corporate giveaway. Resources are drained from the public trust and deposited in the accounts of already prosperous corporations.

What of the recent so called "green" energy subsidies? This is definitely a taxpayer "catch 22". The reasoning behind the "green" subsidies is not the supposed rush to energy independence, but instead the lobbying of these industries to "level" the playing field that has been thrown out of kilter through a century of exploitive energy subsidies. These latest subsidies are subsidies to counter earlier subsidies. Confused yet? It would make tons more sense simply to eliminate all subsidies to the oil, coal, gas and nuclear industries and forget about the "green" subsidies. We would be awakened with an abrupt voluntary shift to these green options that would have naturally come to fruition years ago if the market was left to its own doing.

There is no possible way for the most efficient product to take preeminence in the marketplace when government continues to subsidize whatever segment of the market contributes the most to the campaign coffers of the winning candidate. Special interests will always demand subsidies and only special interests are served by them. It is only when the true costs are borne by the producer and past on to the consumer without taxpayer subsidies, can the consumer make a valid product choice. When all the costs are included in the price calculation without interference and intervention we will also have the most "efficient" option. It is then we will be free to choose energy efficiency and energy self sufficiency. Until then, our Government is making the choice for us.

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