Who’s Paying For All This?

Why, you and I are, of course. The Wall Street Journal takes a look at the way the Federal government subsidizes energy production in the United States. It's appalling.

Some clarity comes from the U.S. Energy Information Administration (EIA), an independent federal agency that tried to quantify government spending on energy production in 2007. The agency reports that the total taxpayer bill was $16.6 billion in direct subsidies, tax breaks, loan guarantees and the like. That's double in real dollars from eight years earlier, as you'd expect given all the money Congress is throwing at "renewables." Even more subsidies are set to pass this year.

An even better way to tell the story is by how much taxpayer money is dispensed per unit of energy, so the costs are standardized. For electricity generation, the EIA concludes that solar energy is subsidized to the tune of $24.34 per megawatt hour, wind $23.37 and "clean coal" $29.81. By contrast, normal coal receives 44 cents, natural gas a mere quarter, hydroelectric about 67 cents and nuclear power $1.59.

This is our tax money being glad handed away by Washington. The numbers for biofuels are equally bad:

The same study also looked at federal subsidies for non-electrical energy production, such as for fuel. It found that ethanol and biofuels receive $5.72 per British thermal unit of energy produced. That compares to $2.82 for solar and $1.35 for refined coal, but only three cents per BTU for natural gas and other petroleum liquids.

If the subsidies for all sources of energy were taken away, which technologies would survive? That should be obvious. This isn't even taking into account the fact that fossil plants have to back up wind and solar power and be ready to take up the load when those sources drop offline suddenly. This was illustrated last February in Texas.