Geothermal energy, #10

Green Energy Fails, Lobbyists Push for More

The Hill reports that energy groups are calling for a change to the text of a wind-power tax credit that would increase investment in several types of renewable, or green, energy.  They would like other forms of energy (green energy, of course) to receive taxpayer subsidies.  Eligible energies would include biomass, geothermal and hydropower.  Usually, when the government makes a supposed “investment,” it’s a red flag that some sort of failure is around the corner.

The list of Obama’s green energy failures is very, very long.  This abysmal record should signal to the federal government – and taxpayers – that it’s time to stop subsidizing these ventures with taxpayer money.  In fact, these subsidies never should have begun.   Yet, somehow, special interest lobbyists act as though this trend will suddenly change if they effectively rob taxpayers some more.

Energy groups want new language in the Senate Finance Committee’s tax package that they erroneously think would “boost investment for 2013.”  Actually, they’re right, but only on a technicality.  Investments will get a boost; they just won’t pay off.   

They also sent a letter to President Obama stating:

A rule that will allow renewable projects to go forward based on when construction begins is a major policy improvement that will allow many more clean energy projects to move forward. 

These policies, they contend, will reduce investors’ anxiety.

Unfortunately, investors have good reason for anxiety regardless of any law that Congress passes.   If renewable or green energy projects aren’t ready to compete in the free market, and offer a desirable product to consumers, they will simply not work.  Subsidizing them is about as useful as flushing money down a toilet or burning it.

Just look at one of Harry Reid’s (D-NV) pet-projects. Nevada Geothermal is a geothermal plant built in his home state that has resulted so far in nothing but massive failure.  How massive of a failure was it?  “A year and a half and $145 million in taxpayer financing later, and the company that built the plant [was] in dire financial straits.”

It’s pathetic how bad the government is at learning from its own mistakes:

Nevada Geothermal enjoyed significant backing from the federal government. It received a $79 million loan guarantee from the same Energy Department program that helped finance the failed solar company Solyndra. 

If these green energy projects can work on their own and due to a market demand for their products, more power to them!  Heritage’s Nicolas Loris explains that the problem is government subsidies.  He outlines four of the main problems with this:

  1. Subsidies destroy jobs elsewhere. Taxpayer-funded programs do not create jobs; they shift them from one sector of the economy to another…
  2. Subsidies promote cronyism. When the government dictates how private-sector resources are spent by doling out subsidies and targeted tax breaks, those industries that benefit greatly from such policy decisions will spend more money lobbying for government handouts…
  3. Subsidies create industry dependence on government. Government subsidies create [government] dependence and remove the incentive for companies to make their technologies cost-competitive…
  4. Subsidies waste taxpayer dollars. Even if a project with a taxpayer-funded subsidy is successful, attributing the project’s success to the taxpayer support is a huge assumption. It merely offsets the private-sector investment that would have been made anyway…

Unfortunately, too many politicians on both sides of the aisle can’t quite grasp these concepts, or at the very least, learn from past mistakes.

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