December 15, 2017
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Energy subsidies aren’t just for renewables, fossil fuels get the lion’s share

By The BDN Editorial Board
Courtesy of Jeff Cropley | BDN
Courtesy of Jeff Cropley | BDN
Jeff Cropley, a student in the wind power technology program at Northern Maine Community College, spent the summer as an intern for independent power producer TransCanada. He is pictured here at the Kibby Mountain wind farm project in western Maine. Cropley inspected the turbines and issued mechanical completion certificates.

Energy, especially proposals to lower costs, will again be a significant topic of debate in Augusta this year. Renewable energy should be central to that discussion. Unfortunately, lawmakers in recent years have backtracked on the state’s commitment to developing clean, local sources of energy.

Again there will be attempts to ease requirements for the state’s use of renewable energy, including an expected bill from Senate President Mike Thibodeau to cap subsidies, like the state’s renewable portfolio standard, to renewable projects. Most energy subsidies are at the federal, not state, level.

Such government payments are akin to taking money out of his grandmother’s Social Security check, he told the Portland Press Herald in explaining his proposal.

But the notion that governments only subsidize renewable energy is nonsense. The federal government gives large tax breaks to oil and gas companies, which are also allowed to drill on federal land and in federal waters for a pittance. Even more expensive, much of our defense spending is about protecting oil and gas supplies.

A 2010 report by Bloomberg New Energy Finance found globally fossil fuel subsidies were 12 times higher than those for alternative energy. Governments in 2009 gave $43 billion to $46 billion of support to renewable energy through tax credits, guaranteed electricity prices and alternative energy credits, the group said in its report. The U.S. offered $18 billion in subsidies for renewable energy that year. According to the International Energy Agency, $557 billion was spent in 2008 to subsidize fossil fuels.

And that’s only direct subsidies. When you add in other costs, such as protecting shipping lanes for tankers and a foreign policy that must curry favor with oil producing countries, the so-called hidden costs (costs not included in the price consumers pay at the pump) can soar to $3 to $8 per gallon of gasoline. Clearly, these costs aren’t passed on to consumers at the gas pump. Rather taxpayers foot the bill through federal spending on defense, transportation and other government expenses.

Journalist Peter Maass, author of “Crude World,” has spent more than a decade researching oil supply and prices. In a 2010 Foreign Policy article, he cited a two-decades-old study by the Government Accountability Office that in 1991 estimated that between 1980 and 1990 the U.S. spent a total of $366 billion to defend oil supplies in the Middle East.

“An honest accounting would do a lot more than tired platitudes because it would force us to confront the hidden costs that we don’t see at the pump,” he wrote.

Beyond finances, there are serious health consequences to our dependence on fossil fuels. The burning of oil, gas and coal to fire power plants and cars and trucks are the biggest sources of air pollution in the U.S. This pollution is responsible for increased cases of asthma and other breathing problems, as well as premature deaths among the most vulnerable.

Particulate pollution from U.S. power plants shortens the lives of nearly 24,000 people each year, including 2,800 from lung cancer, according to the Clean Energy Task Force.

Meanwhile, renewable energy companies are growing in Maine — employing Maine residents and putting money into the local and state economies. A recent report by the Maine Center for Business & Economic Research at the University of Southern Maine along with with Wind for Maine and the Maine Renewable Energy Association — admittedly self-interested sources — projected that nearly $1.3 billion would be invested in Maine by renewable energy-related companies between 2006 and 2018 with the creation of an average of more than 1,500 jobs a year. This year is expected to a peak year, with 4,200 jobs created.

All energy sources have positives and negatives. Looking at any source without comparing it to other sources results in misleading and dangerous conclusions. Lawmakers should avoid such conclusions when discussing any topic, but especially one as important as the state’s energy future.

 


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