Appeared in: The Bellingham Herald , Trading Markets , The Press of Atlantic City , The Vindicator , The Keene Sentinel , The Lexington Herald-Leader , The Sacramento Bee
For most businesses, Election Day is already an afterthought. Their viability depends on customers, not on politicians. For "green" energy industries, however, unfavorable political winds can easily lead to bankruptcy.
Consider the collapse of the Chicago Climate Exchange. It was established seven years ago to facilitate the "trade" part of a "cap-and-trade" policy. Accordingly, the fortunes of CCX have mirrored the prospects of climate policy in the Congress. In May 2008, as the Senate prepared to take up cap-and-trade legislation, CCX-investor optimism spiked - as did the price for a credit representing a ton of carbon dioxide on the CCX, at almost $7.
Then the Senate shelved the controversial measure and the price of a ton of carbon dioxide plummeted steadily, now languishing at 5 cents. When the November Republican election tide became reality - with its corresponding doom for the politically poisonous cap-and-trade bill - the CCX, begun and sustained with so much media and political fanfare, announced that it would fold.
The fall of CCX brings into stark relief the central problem ailing the entire "clean energy" industry that President Obama has promised to conjure: It exists only by the grace of politicians.
For decades, renewable energy sources have existed solely due to subsidies, yet they still cannot compete. According to the federal Energy Information Administration projections, in 2016 wind will still be nearly 50 percent more expensive than coal and nearly 80 percent more expensive than natural gas. The EIA projects thermal solar will be 150 percent more expensive than coal, and 200 percent more expensive than gas.
Don't take our word for it. Green energy execs regularly acknowledge that their industries face ruin unless the taxpayer spigot is kept wide open, all the while providing assurances that they have become cost-competitive:
-Biomass Power Association President Robert Cleaves (February 2010): "Thousands of jobs in the biomass power industry could be lost if Congress fails to extend the production tax credit."
-American Wind Energy Association CEO Denise Bode (July 2010): "Manufacturing facilities will go idle and lay off workers if Congress doesn't act now" to impose a federal mandate for electricity produced by AWEA members.
-Solar Energy Industry Association President Rhone Resch (September 2008): "Unless Congress promptly returns to complete their unfinished business, the solar industry will suffer with the loss of 39,000 jobs."
-Renewable Fuels Association CEO Bob Dinneen (November 2010): "Allowing the tax incentive to expire would risk jobs in a very important domestic energy sector and across rural America."
Of course, it is only natural for aid-dependent industries to warn that they would suffer without the continuation of aid. Employing this circular logic, taxpayer funded renewable power has remained the "energy of the future" for decades. But American taxpayers simply cannot afford to subsidize industries that are forever-nascent.
Although conventional energy sources like coal and natural gas also, unfortunately, receive subsidies, their existence does not depend on handouts, and renewable power generation receives at least 50 times the taxpayer subsidies doled out to fossil fuels per unit of energy produced, even before the 2009 stimulus act and its more than $60 billion in green energy giveaways. In the face of rising deficits, it's well past time to end wasteful, taxpayer-funded welfare.