The Natural Gas Threat to Renewables Motivates Its Opponents
Richard Downey
Unatego Area Landowners Association
The battle over natural gas is really a battle about renewables, says Dick Downey. They’ve gotten the massive subsidies and have generated little to show for it, while natural gas has become the nation’s energy choice through a system of largely free-market initiatives and consumers who were free to choose.
More than half (56%) the households in the USA, a total of 62 million, are heated with natural gas. Pipeline networks like the proposed Constitution Pipeline, deliver cheap, plentiful, and clean(er) gas to cities transitioning from heating oil. Over the last four years, coal-fired electric generation has fallen one third, from 53% to 36% for the same reasons. These trends are resulting in the lowest CO2 emissions in 20 years. All this in a free market. No cap-and-trade; no crony capitalism.
So why are the uber-greenies fighting gas down to the last molecule?
It’s simple when you follow the money. Gas trumps renewables for the foreseeable future. Gas is an efficient, scaleable, flexible energy product selling at a bargain price. Renewables aren’t. Without huge taxpayer supported subsidies, renewables will be gone with the wind.
The Department of Energy reports the federal government doled out $37.16 billion in energy subsidies in 2010. These include ear-marked tax breaks, direct loans, loan guarantees, R&D, home heating assistance, special consumer programs, and on and on and on. Interestingly, of the $37 billion in federal handouts, oil and gas combined only got about $3 billion. Nuclear and coal also fed at the public trough, but the bulk of the subsidies went to renewables.
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- Source: Energy Information Administration
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Does the country get its bang for the taxpayer buck?
The Institute for Energy Research used Department of Energy data to determine the subsidy paid per megawatt of electricity. Oil, gas, and coal clocked in at 64 cents per megawatt; hydropower at 84 cents; nuclear at $3.14. Wind blew in at $56.29 per megawatt and solar topped off at a sky high $775.64. For every tax dollar spent supporting an oil or gas or coal company to produce a given amount of electricity, a wind company got $88 and solar (Solyndra, et al) got $1,212 for the same output.
Are renewables worth it?
Not in Realville. Aside from the extra costs to consumers and taxpayers, renewables fall short in the societal benefit of job creation. Promise 700,000 jobs; deliver 28,854 (Bloomberg’s Businessweek.)
But that doesn’t mean nobody makes money. Al Gore is doing fine, with a net worth of $100 million, thanks to $2.5 billion in loans, grants, and tax breaks in his save-the-earth businesses. And, billionaire campaign contributions bundler George Kaiser continues to feed off the corpse of Solyndra with over $350 million worth of tax credits and tax-loss carry-forwards according to the Wall Street Journal. The Treasury took a bath for about half a billion dollars. The Hoover Institute estimates 80% of the “green” companies receiving Department of Energy backing have been run or primarily owned by fat cat financiers with political connections.
With the threat of these kinds of subsidies and sweetheart deals disappearing, it’s no wonder the Barnums of Big Wind and Big Sun are hunkering down for the long haul. We‘re talking serious money here.
Some day renewables may replace significant amounts of carbon based energy. Federal dollars would be well spent on basic research to that end. However, it shouldn’t be spent on companies that haven’t figured out what customers want and can’t deliver a product at a profit without financial life support. It shouldn’t be spent on the favored few who are guided through the bureaucratic regulatory maze to a Promised Land where start-up costs are covered, future sales are guaranteed, and competition is squelched. This kind of business model leads to complacency, obsolescence, and cynicism.
Deep Throat had it right. Follow the money. Big Wind and Big Solar aren’t going down without a fight. Hang on, folks, it’s going to be a bumpy ride.
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Good piece with good detailed information.
The author mentions $3billion in subsidies to oil and gas. I’ve heard $4billion, (perhaps as a more recent number). It’s of course chump change for this industry with its multi $100s of billions in revenues. But I’ve never seen a clear statement as to exactly what these subsidies supposedly are.
Does anyone know the specifics?
See http://www.eia.gov/analysis/requests/subsidy/
I agree Federal funds are best served in research into the best renewables for our county.
Meanwhile, back on the Gasland Ranch here in Susquehanna County, Pa. and other counties,
the bust has started.
Businesses are closing, selling, houses remain on the market for longer periods and now even have “for rent” signs above the “for sale” signs and still sitting, rentals are a plenty, not being rented, gas development down about 50 %, Summerhouse Grill Restaurant closing for the winter months due to slow-down, Robinson’s and PJ’s closed and closing
in South Montrose. Seven Businesses in and around Montrose for sale and still sitting.
I spoke this week to one of our largest landowners in Dimock who has over a dozen gas wells on his property and he told me that his royalties are now 1/8 of what they were about four years ago !!
The Bust has started after only four years plus.
So, you can hang on to your wealth fantasies, but come here and talk to the residents
and see whether it’s worth having gas wells every 1/4 to 1/2 mile apart in our heaviest , developed areas.
I can show you around and tell you who’s talking and who isn’t.
Our roads are still full of patches and our countryside is a patchwork of open swatches for endless pipelines filled with high pressure gas of 200 to 1500 lbs. pressure per inch,
which is different than the street pipelines of suburbia !
Farmers are complaining that they’re only getting $30. an acre in monthly royalties.
We need good, cheap, clean fuel for now and future generations.
It’s not worth polluting our air, water and land for this dirty gas where a few of the CEO’s, stakeholders ran off with the bulk of the profits and left most with little or nothing and a dirty environment to deal with.
Vera,
I have never seen so many exaggerations in one short piece. One visit to Susquehanna County will dispel that notion for anyone.
Data for Bradford County PA show median home prices in 2007 as around $70,000. Data for 2012 Q2 shows median prices as around $140,000.
Source: http://www.city-data.com/county/Bradford_County-PA.html
Scroll down and look at the graph. Where are your ‘facts’ supporting declining home prices?
And how do you explain the Sautners selling their supposedly worthless house (worthless due to their supposedly contaminated well) at a profit?
As far as royalties, with the price of gas down I wouldn’t be surprised that payments are down. Still, that’s income that most landowners didn’t have before. And let’s not forget the multiplier effect of spending that additional income in the community.
Farmland is now going for $10k an acre, that up from $3k an acre for the last 20 years. Explain that away, Vera.
Ed, are you in Pa.? if you have land, see if you can get $10,000. an acre and get back to us with proof. Right now , not much is selling and if you do happen to find a buyer, you have to give up your lease to the buyer. Show me someone who has sold for $10,000. an acre in our county since September.
Vera
the provocateur of mis information, the keeper of the nimby dung, seeking, no, demanding proof yet never providing that which she demands….
Ed ….. give her nothing as twisting information through false witness and accusations is her expertise…. ask her to provide proof of frack chemicals in water aquifers. To show a video of a well pad tour where she was allowed on the well.
Vic, by the way, I emailed over a week ago , after the Binghamton protest, the DEP documents to your friends, Tom and Joe of EID, showing that gas drilling is responsible
for the latest water contamination of water wells in four homes in Lenox near Cabot gas wells. Have they shown it to you or did you have trouble reading it? These homes have methane emission stacks over their water wells and three are receiving replacement water to their water buffaloes paid for by Cabot Gas….
Vera,
You know well the rules of presumed liability in PA. I’m not saying gas development didn’t produce methane migration, but your statements assume mitigation automatically equals fault and that’s not the case.
and there ya have it
Tom and Vic,
if you read the DEP papers I sent you, it says that gas drilling impacted the water wells of the four homes in Lenox this past year and Cabot is paying to deliver them water ; it’s not assumption, it’s definitive DEP determination that gas drilling is at fault.
the truth will come out; those who are interested , can write me and I can send the DEP documents faulting gas drilling for the latest group of water wells;
veraduerga@yahoo.com
I got these documents with a Right To Know. you can get them, too.
I don’t think anyone ever had any illusions that natural gas would never fall in price, especially after the Marcellus has proven to be so immensely productive as to completely change the energy supply picture in the northeast. Which demonstrates the wisdom of most land owners who have made some money from natural gas in that they are saving most of the proceeds rather than going on a shopping spree as per a Penn State survey of a little while back about how the new gas money was being used. People who have had to make a living from the land, especially in a region where nature was often fairly grudging have had a long experience in being thrifty. And those who had not been content to live lean have long since lost their places. As to the disappointment of a land owner in that his royalty check has gone down to only 30 dollars per acre per month, I think anyone would be hard put to find a farmer or woodlot operator who makes that much per acre per month no matter how hard they work or how much money they invest and risk in their business.