Betting The Farm On The Right Curve
05/04/09 14:41
Imagine you are the President of the United States. You face big choices over which energy supply sources (e.g. oil, wind, nuclear, coal, solar) to support for our future, and which to reduce.
I’m going to show you the prices of three energy sources (e.g. oil or wind or coal in say, dollars per barrel) over time. (For you geeks, these are all in 2008 $ and the source is the U.S. Dept. of Energy)
US taxpayers have subsidized one of these energy sources for nearly a century with tens of billions of $ of tax breaks and other easements every year. As a result, we now depend upon this source of energy above all others.
You as President, must decide which energy sources you support and which you think the United States should wean itself away from.
From the mystery charts below, pick the two energy sources you think would be best for the American people and click Read More to find out what they are...
1.
2.
3.
I’m going to show you the prices of three energy sources (e.g. oil or wind or coal in say, dollars per barrel) over time. (For you geeks, these are all in 2008 $ and the source is the U.S. Dept. of Energy)
US taxpayers have subsidized one of these energy sources for nearly a century with tens of billions of $ of tax breaks and other easements every year. As a result, we now depend upon this source of energy above all others.
You as President, must decide which energy sources you support and which you think the United States should wean itself away from.
From the mystery charts below, pick the two energy sources you think would be best for the American people and click Read More to find out what they are...
1.
2.
3.
OK, here’s a little more info. to help you decide. It is obvious that one energy cost is rising while the other two are falling - this, in itself, is probably reason enough to choose #2 and #3.
However what if you also knew these other facts?
Energy source #1 was an export industry for decades but the US now imports more than 50% of this energy source because U.S. resources are depleted. The US led in production the other two sources ten years ago but now lags Europe and Asia by a factor of 10. (But we can get this lead back if we act decisively and quickly.)
Energy source #1 is subject to extreme price swings and shortages due to the unstable parts of the world where most of this energy is produced. The other two are not subject to these risks because this energy is produced in the U.S.
Energy source #1 creates greenhouse gases, while the other two do not.
Energy source #1 continues to be subsidized by the US while Europe has switched and bet on the other two.
If you guessed that oil was the first chart, Solar (Photovoltaic to be specific) is #2 and wind is #3 you were correct.
For decades the US has subsidized oil with around 20 BILLION DOLLARS of tax credits annually. Tax breaks for drilling, accelerated depletion allowances, preferential expensing for refining and drilling equipment, accelerated depreciation for dry holes, no limits on passive losses, etc., etc.
Yet the U.S. has never (until now) provided even one billion of tax credits per year for wind and solar until late last year. The breakthrough energy policy reduced 90 years of subsidies to the petroleum industry and increased subsidies (at least for the next 8 years) to wind and solar power.
Some have pointed out that as President you don’t have to make a bet. I beg to differ. First, we are already making a big bet and we have always bet big. Second our competitor nations ARE making bets by subsidizing one energy form and taxing others) as we do today.
The U.S. has led he world for a century by commercializing technologies by subsidizing leading edge technologies: in the 1850s the U.S. gave railroad companies all the land for a MILE on each side of the tracks as an incentive to build and operate new routes - thus developing a nationwide road service. Granting monopoly rights to regional telephone companies in exchange for ensuring that every home in the U.S. (incluiding distant ranches) would be wired for telephone service at the same cheap rates in the “Universal Service” guarantee. Granting lucrative “mail contracts” encouraging budding airlines to use bigger planes to build out the world’s first airline network. Building the ARPANet that grew into the Internet.
Mr. President, will you consistently support domestic renewable energy sources whose price is declining and help the U.S. build the leading export economy for these companies?
However what if you also knew these other facts?
Energy source #1 was an export industry for decades but the US now imports more than 50% of this energy source because U.S. resources are depleted. The US led in production the other two sources ten years ago but now lags Europe and Asia by a factor of 10. (But we can get this lead back if we act decisively and quickly.)
Energy source #1 is subject to extreme price swings and shortages due to the unstable parts of the world where most of this energy is produced. The other two are not subject to these risks because this energy is produced in the U.S.
Energy source #1 creates greenhouse gases, while the other two do not.
Energy source #1 continues to be subsidized by the US while Europe has switched and bet on the other two.
If you guessed that oil was the first chart, Solar (Photovoltaic to be specific) is #2 and wind is #3 you were correct.
For decades the US has subsidized oil with around 20 BILLION DOLLARS of tax credits annually. Tax breaks for drilling, accelerated depletion allowances, preferential expensing for refining and drilling equipment, accelerated depreciation for dry holes, no limits on passive losses, etc., etc.
Yet the U.S. has never (until now) provided even one billion of tax credits per year for wind and solar until late last year. The breakthrough energy policy reduced 90 years of subsidies to the petroleum industry and increased subsidies (at least for the next 8 years) to wind and solar power.
Some have pointed out that as President you don’t have to make a bet. I beg to differ. First, we are already making a big bet and we have always bet big. Second our competitor nations ARE making bets by subsidizing one energy form and taxing others) as we do today.
The U.S. has led he world for a century by commercializing technologies by subsidizing leading edge technologies: in the 1850s the U.S. gave railroad companies all the land for a MILE on each side of the tracks as an incentive to build and operate new routes - thus developing a nationwide road service. Granting monopoly rights to regional telephone companies in exchange for ensuring that every home in the U.S. (incluiding distant ranches) would be wired for telephone service at the same cheap rates in the “Universal Service” guarantee. Granting lucrative “mail contracts” encouraging budding airlines to use bigger planes to build out the world’s first airline network. Building the ARPANet that grew into the Internet.
Mr. President, will you consistently support domestic renewable energy sources whose price is declining and help the U.S. build the leading export economy for these companies?
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