Energy is not Created Equal: Technology Subsidies

All energy is not created equal since each energy resource in the U.S. receives different levels of subsidization that make it either very competitive or not at all in the energy marketplace. Consequently, when politicians, the media, and others say the U.S. cannot have an economy other than one based on fossil fuels, the reason is the unequal subsidy practice in place that enables fossil fuels to outpace renewable sources substantially. It is almost as if renewable energy sources aren’t even being given a chance to develop their technical capacities and potential since all the money that can go to them is instead going to the oil, coal, and natural gas industries. Clearly, in the U.S., in particular, all energy in not created equal and some are more equal than others. Part of that has to do with the sheer money and influence of the fossil fuel industry at the national level.

To give an illustration of the problem, The Bloomberg News Agency, for example, highlights how in 2009 “governments provided subsidies between $43 billion and $46 billion to renewable energy and biofuel industries. In contrast, estimates from the International Energy Agency released in June showed that $557 billion was spent by governments during 2008 to subsidize the fossil fuel industry.” Even though the Bloomberg News Agency reports talks about governments internationally, this is equally applicable to the U.S. given that the U.S.’s known addiction to oil. In particular, U.S. lawmakers often talk about how we are addicted to oil and that new investments in renewable energy will be made, but the rhetoric is never translated into reality with any policy solutions.

As such, when President Obama promised “Change” almost two years ago, there was excitement on a lot of fronts. Energy independence is certainly one area that Obama has made a top priority. Yet, when push comes to shove, the usual status quo thing happens where subsidies for “Big Oil” or “Big Coal” continue unabated, but the types of dramatic investments in renewable energy go largely untouched. Keep in mind this is a global problem, but since the U.S. has one of the largest appetites for fossil fuels, the lopsided energy subsidies for fossil fuels relative to renewable energy sources is particularly acute here.

In summery, the subsidies for fossil fuels compared to renewables make it so that they are an artificially cheap energy source compared to renewable resources that provide clean energy. Consequently, the problem here is that lawmakers in DC and elsewhere seem to be beholden to the fossil fuel industry. Until the allegiance changes, renewable energy will remain about what it is today, a relatively insignificant source of energy in the U.S. compared to fossil fuels.

Article by Patrick Kenny, appearing courtesy Justmeans.

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One comment on “Energy is not Created Equal: Technology Subsidies

I think you are right. The problem now is that renewable energy companies have not yet conquered the power that oil companies have. In the end, politicians are very influenced by large corporations, especially the energy ones. I understand that they may be very cautious when their policies threaten to change the status quo and it may be difficult to make long-term decisions when their mandates last for only 4 years. I hope that once renewable energy companies gain terrein to oil corporations, governments will be less scared of the actions that those oil companies may take in retaliation for their policies.

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