Today's WSJ reports on an Energy Information Administration study detailing current federal energy subsidies.
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. . . .
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 [million] British thermal unit[s] of energy produced. That compares to $2.82 for solar and $1.35 for refined coal, but only three cents per [million] BTU[s] for natural gas and other petroleum liquids.
UPDATE: I consulted the EIA report upon which this editorial is based, and it confirms (as some commenters suggested) that the size of subsidies for non-electricial energy production was overstated. The figures originally quoted are per million BTUs, not per BTU (see Table ES6).
-dk
Also note that the WSJ editorial takes issue with the low level of nuclear subsidies when compared to solar thermal, PV, wind, etc. That's sort of a silly criticism for two reasons. First, as they grudgingly acknowledge, nuclear's a fairly mature technology and you'd expect the subsidy per unit energy produced to be much higher for immature technologies than you would for mature technologies.
Second, and more important, you can't subsidize something that isn't growing its deployed base. If you really want to help the nuke industry, you don't need to pay them very much directly. You just need to give them licenses and help them manage their risk. These numbers have nothing to do with that.
Agreed, the numbers sound fishy.
Lets see, given ethanol has about 76,330 BTUs per gallon, at $5.72 per BTU, that'd mean $436,607.60 per gallon. That sure doesn't seem right.
That 3 cents per BTU for petroleum fuels also seems suspect. A gallon of gasoline has about 116,090 BTUs, that would mean it was being subsidized about $3,482.70 a gallon. Not as ridiculous, but still not realistic seeing as they still made me pay for gas this morning.
In addition to the sound reasons given above, this is especially so given that the purpose of much of the subsidies is not just to buy energy, but to buy a particular kind of energy. So if you would really want to standardize the comparison in the way they propose, you would want to do it cost per a megawatt hour per either ton of CO2 emitted or per or new job generated, if we think it is more of an economic stimulus.
Even that, though, would of course be incorrect since the purpose of the federal energy budget is not just to subsidize the purchase of present day energy, as the WSJ proposes. Instead, as said above, the goal much of the subsidies is to to get the various emerging industries to scale, something that is not well measured by how much energy per buck we're buying this year. Likewise, putting the costs in $ / megawatt hour is not an accurate way of 'standardizing' this aspect of the costs, if that is indeed the WSJ's goal.
This is not to say that all of our money is well spent, but the WSJ is judging our expenditures by a foolish and inaccurate metric. Any industry that wants to increase current profits or output can do no better than go balls out on its current product. Long-term investment in the 'growing' area of your businesses almost never come out looking good judged by "profit produced per dollar spent this year".
As a former management consultant, I roll my eyes when I read this kind of hackery, people playing with numbers to make them tell a story that they want them to tell rather than letting the data lead the narrative. Then again, as a former management consultant, I also learned how easily it is to play with numbers in this way...
Finally, just a small hat tip - I found the comment above about what we would need to do to really increase nuclear production quite interesting.
1. The WSJ doesn't "propose" that the purpose of the federal energy budget is just to subsidize the purchase of present day energy (whatever that means). The Journal article simply points out that wind and solar are receiving far greater subsidies than nuclear or coal. That doesn't prohibit from drawing a conclusion that those costs are worthwhile since they may save us from global warming/sunspots/whatever other danger is supposedly present.
2. The problem with wind and solar isn't scale, it's that the technologies are just plain too expensive to implement. The ostensible reason for the increased spending is to spur innovation, not to produce scale benefits.
3.
I can see the argument that it is foolish (if you believe that nuclear/cost/natural gas aren't realistic alternatives), but inaccurate? How? How are they "playing with the numbers"? The numbers are what they are. Just because you don't like the conclusion the numbers lead you to doesn't make them wrong.
And it's not a silly criticism for one very good reason. The advocates of these new technologies often cite nuclear subsidies as justification for subsidies for their own sectors.
Now that we know the extent of nuclear subsidies is proportionally much, much smaller they have less of a justification for the sheer, staggering amount of pork they are sucking up.