A Not-So-Mighty Wind
If, as the old saying goes, timing is everything in politics, then a recent 24 hour period says everything about the maddening politics of energy in America.
This particular sequence of events started on September 23rd, when the Boston Globe delivered some big news. In a story headlined "Wind power now competitive with conventional sources," the newspaper reported that Massachusetts had finalized "long-term contracts to buy wind-generated electricity at prices below the costs of...coal and nuclear plants." It was a historic moment: clean, renewable energy had become cheaper for a state's consumers than environmentally destructive sources of energy - and it had reached that status on a large scale.
Yet, just one day later, a group of corporate-financed front groups in Washington didn't send out press releases rejoicing over the developments. Instead, the groups - some of whom are financed by the fossil fuel industry - sent a letter to their allies in Congress demanding they vote to eliminate the crucial wind energy tax credit that creates an incentive for the construction of new wind energy facilities. Despite the comparative price savings in Massachusetts, these conservative organizations declared that wind energy "doesn’t produce cheaper energy."
What was so telling about the letter - beyond its brazen lying about the economics of wind - was its rhetorical bait and switch. Employing the righteous argot of principled outrage, it cast the front groups' opposition to the five-year, $18.5 billion wind tax credit as an earnest stand against all preferential tax credits. Yet, revealingly, it proffered no opposition to ongoing tax breaks for oil and gas companies that will cost even more - $20 billion - over a five-year period.
The difference in those subsidy levels tells a larger story that contradicts the fable the fossil fuel industry and its conservative allies have been spewing. For years, they've insisted that while more renewable energy would be both better for the environment and a way of achieving energy independence, it is too expensive and requires too many government subsidies to be economically viable. Lost in the noise of campaign commercials and conservative media blowhards that echo such misinformation is a simple fact: fossil fuels are far more heavily subsidized than renewable energy.
Data illustrate this point. Compiling figures from the International Energy Agency, Bloomberg News reports that the world's governments spend six to 12 times the amount on fossil fuel subsidies as they do on renewable energy subsidies. In total, a 2013 International Monetary Fund report found that these governments together spend almost $2 trillion a year on fossil fuel subsidies. And in case you think it is other countries giving out those subsidies but not "fiscally conservative" America - note that the United States government leads the fossil-fuel-subsidizing pack at a whopping $502 billion.
Those figures, of course, make the Massachusetts' news even more significant. It means wind became cost competitive even though on the whole wind receives fewer subsidies than its dirty energy competitors.
Put last month's sequence of events together with the data about subsidies and it is clear that the oil and gas behemoths are utterly freaked out - and rightly so. As a recent study from the federal government's National Renewable Energy Laboratory proves, the economics of energy are indeed changing, to the point where wind and solar could become completely cost-competitive with fossil fuels by 2025 without any federal subsidies whatsoever. It's worth repeating that to stress the subsidy part - yes, as long as public policies are reformed to support clean energy, wholly unsubsidized clean energy could very soon become cost competitive with still-highly-subsidized dirty energy.
The problem, though, is that the difference between "could" and "will" is the difference between the relatively honest, pragmatic and dispassionate government and a completely corrupt, irrational and ideological one. America has the latter - the kind that listens far less to its own citizens or the nascent green energy industry than it does to the politically connected and much-better-resourced signatories of that letter.
That discrepancy, of course, is generally reflected in the discrepancy between America's huge fossil fuel subsidies and relatively paltry clean-energy subsidies. It is also specifically reflected in how a comparatively tiny $18.5 billion subsidy for cost-competitive wind energy can be deemed a wasteful boondoggle by the political class, while $502 billion worth of fossil fuel subsidies is barely even mentioned as something to debate, much less criticize. That double standard is the power of Big Oil's campaign contributions, its lobbying, its media-supporting ad budgets and its attendant dominance of Washington, D.C.
If, as expected in the coming weeks, that the political class kills the wind energy tax credit and preserves the fossil fuel subsidies, it will not be proof that Congress is stupid or zealously pro-free-market. It will only be proof that Congress is so owned by Big Oil it is willing to prevent a cleaner, potentially cheaper, less-subsidized source of energy from competing in a not-so-free market - one that Big Oil wants to control.