Taxpayer Dollars Well Spent on Energy?

How does the Government spend our tax Dollars for energy production, research and development. The Wall Street Journal On-Line edition gives us an idea in this article - Wind ($23.37) v. Gas (25 Cents).

Congress seems ready to spend billions on a new "Manhattan Project" for green energy, or at least the political class really, really likes talking about one. But maybe we should look at what our energy subsidy dollars are buying now.

Most of us can agree that a reasonable look at any project needs to be free of emotion. Green is a Politically Emotional Term. So it is fair to go beyond the emotion and look at reality.

First let's start with the total Tax Dollars expendated by our Government concerning energy.

Some clarity comes from the U.S. Energy Information Administration (EIA), an independent federal agency that tried to quantify government spending on energy production in 2007. The agency reports that the total taxpayer bill was $16.6 billion in direct subsidies, tax breaks, loan guarantees and the like. That's double in real dollars from eight years earlier, as you'd expect given all the money Congress is throwing at "renewables." Even more subsidies are set to pass this year.

Now what are we getting for our $16.6 Billion spent? So that we are really comparing apples to apples the Wall Street Journal article points out that the taxpayer cost per unit of energy is one way of standardizing expenses. And here are the results.

For electricity generation, the EIA concludes that solar energy is subsidized to the tune of $24.34 per megawatt hour, wind $23.37 and "clean coal" $29.81. By contrast, normal coal receives 44 cents, natural gas a mere quarter, hydroelectric about 67 cents and nuclear power $1.59.

Since the research into alternative (green) energy has been going on for several years, it is clear that without a technological break-through solar, wind and clean coal don't deserve the bulk of the research money.

Notice I did not say cut off all funding. I'm only suggesting we insist on a more Fiscally responsible way to allocate our Tax Dollars. Research needs to continue, but reality needs to govern how the Research Tax Dollars are spent so that we get the most bang for our Tax Buck.

Where then should we put the bulk of our tax dollars?

... nuclear power provides 20% of U.S. base electricity production, yet it is subsidized about 15 times less than wind. We prefer an energy policy that lets markets determine which energy source dominates. But if you believe in subsidies, then nuclear power gets a lot more power for the buck than other "alternatives."

The figures up to this point have been for Electrical Energy Production. However the study also calculated the tax dollars spent on federal subsidies for non-electrical energy production. For fuel the figures are:

... ethanol and biofuels receive $5.72 per British thermal unit of energy produced. That compares to $2.82 for solar and $1.35 for refined coal, but only three cents per BTU for natural gas and other petroleum liquids.

Even with the high cost of oil, natural gas and petroleum liquids are ONLY 3 CENTS PER BTU. Remember these figures next time any of the politicians talk about expendatures for Green Energy Production. Our Tax Dollars are truly best spent on Oil and Gas.