SARAH PALIN: END ALL ENERGY SUBSIDIES
http://www.investors.com/NewsAndAnalysis/Article/573971/201106011846/Palin-End-iAlli-Energy-Subsidies.htm
Energy Policy: The former governor of energy-rich Alaska calls the administration’s bluff: End tax breaks for all forms of energy, she says, and let the free market pick winners and losers. End the ethanol pandering too.
She isn’t running, or riding, for president, at least not yet. But at a stop on her One Nation bus tour, Sarah Palin offered a winning idea for an economy strapped for energy and jobs and saddled with unsustainable debt.
“I think all our energy subsidies need to be re-looked at today and eliminated,” Palin told Scott Conroy of Real Clear Politics during a quick stop at a coffee shop. “And we need to make sure that we’re investing and allowing our businesses to invest in reliable energy products right now that aren’t going to necessitate subsidies because, bottom line, we can’t afford it.”
These would be genuine, private investments that create wealth and produce tax revenues, not government subsidies to politically favored energy sources that consume taxes and reduce wealth. Palin, in stark contrast to former Massachusetts Gov. Mitt Romney, took particular aim at ethanol subsidies that cost taxpayers about $5 billion last year.
Democrats like to rail against “oil subsidies,” the elimination of which they say would save about $20 billion over 10 years. That’s less than the $26 billion the Energy Department, which produces no energy, consumes in one year. Never mind these annual tax credits are afforded to almost every other industry.
The government is hardly losing money on the deal considering that, according to the American Petroleum Institute, the oil industry generates almost $100 million of revenues per day in income taxes, excises and royalties for the federal government. That’s on top of an effective 55% corporate tax rate that is higher than in most industries.
As the Heritage Foundation reports, solar receives subsidies of more than $23 per megawatt hour — compared with the 44 cents for conventional coal and 25 cents for natural gas — but provides a tiny fraction of America’s electricity. According to Heritage, in 2010, solar energy received 52 times more subsidy money per megawatt hour of electricity than coal and 92 times more than natural gas.
Subscribe to the IBD Editorials Podcast According to an analysis by Chris Horner, an energy expert at the Competitive Enterprise Institute, the stimulus bill’s subsidies for renewable energy to the tune of $30 billion cost taxpayers about $475,000 for every job generated. Three billion dollars went to wind to cover 30% of its production costs.
Wind accounts for a little more than 1% of electricity generation and coal almost 50%.
Accepting the wind industry’s figures for employment, Horner reckons it takes at least 25 times more workers to produce a kilowatt of electricity from wind as from coal. The Institute for Energy Research puts the real cost of energy produced from wind at 24 cents per kilowatt hour (kwh). This compares with 7 cents per kwh for natural gas-fired combined cycle, 10 cents per kwh for conventional coal and 11 cents per kwh for advanced nuclear.
Then there’s heavily subsidized ethanol, which consumes 40% of our corn crop and does little other than raise the cost of food at the grocery store. It requires huge subsidies to make it competitive with gasoline. The Congressional Budget Office says it adds a billion dollars to food stamp costs annually.
We disagree with Romney when he told an Iowa voter, “I believe ethanol is an important part of our energy solution for our country.” Putting food in our gas tanks is an absurd and expensive idea when we have at least triple the fossil fuel reserves of Saudi Arabia locked up by federal edict. Even Al Gore admitted he supported ethanol only out of political necessity.
We like Sarah’s idea: Eliminate all energy subsidies and couple that with the elimination of all production restrictions off America’s coasts and in shale formations throughout the U.S.
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