Natural Gas vs. Subsidized Renewables Is No Contest
A “fractivist” ended the recent Otsego County Natural Gas Advisory Committee’s meeting by intoning the following statement:
A dollar spent on natural gas is one less dollar spent on renewables.
Very deep, but what does this mean? It’s probably about subsidies, so let’s scroll back to Economics 101.
Demand determines where money is spent in free markets. However, in command-and-control societies, the money goes where the kings and commissars (the elites) deem it best. Our society is a little of both, but thankfully, still more of the former. So, in spite of loan guarantees, tax credits, state supported rebates, state mandates and quotas, direct subsidies and grants, and manipulated tariffs, renewables still fail to make the market.
Take solar heated homes. After decades of popularization and righteous approval, and with tons of subsidies, solar heated homes are still marginal in the United States. According to the 2010 Census (American Community Survey), there are only 38,000 in the entire country. In contrast, there are 57,000,000 homes heated with natural gas. Why? Natural gas is cheaper, more reliable, more adaptable to a mass market (i.e., scaleable), and more builder friendly. In other words, people like it.
This holds true for wind, biomass, hydro, wave, geothermal and other forms of renewable energy. Renewables gobble up massive subsidies and, yet, are nowhere near fossil fuel pricing. Competitive? Not even with the pork barrel.
But, hey, that doesn’t mean people can’t make a buck on them. Massive subsidies attract the wheeler/dealers and the crony capitalists. Never mind the business wont fly. When Uncle Sam picks up the tab, roll ‘em, and let it ride! More money where that came from, baby!
And, get this. When First Solar was found by the government to be unable to “meet requirements in time,” the company experienced production drops and a stock market slide. That didn’t prevent First Solar from picking up new guaranteed loans while selling off solar farms to Exelon and General Electric. Now blue chip Exelon and General Electric are on the renewable dole. Go figure!
There’s a better way for government to support renewables, a way that takes the government out of venture capitalist game of picking winners and losers, a game it has never played well. Perhaps that offers fodder for a future post.
In the meantime, there’s natural gas. If folks could pull themselves away from the Josh Fox press and actually go to the raw data and statistics coming out of the states (and countries) with shale production, they’d see an economic uptick, with acceptable risk, in oil and gas production, in baseload electricity, in manufacturing, and in chemicals. They’d see economic growth in other words … and jobs. Natural gas will also play an increasing role in transportation as infrastructure expands. Witness Otsego County’s recent decisions on natural gas fueled vehicles. Also, witness the opposition, driven by ideology over economics.
Renewable purists can always buy a mule, card wool for clothing, cook over a campfire and walk the trails to town. (Yeah, road tar and asphalt are hydrocarbon products.) That way, they can signal their moral support to the renewables mentioned at the Natural Gas Advisory Committee while making sure their dollars don’t go to a natural gas company.
Note: A version of this article appeared in the Oneonta Star.