The old dirty Energy industry is one of the most highly subsidised in the US, with tax subsidies going back a 100years with annual subsidies according to the OMB, of at least $4Billion. The alt energy investments have been trivial in comparison.
"An economist for the Treasury Department said in 2009 that a study had found that oil prices and potential profits were so high that eliminating the subsidies would decrease American output by less than half of one percent.
“We’re giving tax breaks to highly profitable companies to do what they would be doing anyway,” said Sima J. Gandhi, a policy analyst at the Center for American Progress, a liberal research organization. “That’s not an incentive; that’s a giveaway.”
Some of the tax breaks date back nearly a century, when they were intended to encourage exploration in an era of rudimentary technology, when costly investments frequently produced only dry holes. Because of one lingering provision from the Tariff Act of 1913, many small and midsize oil companies based in the United States can claim deductions for the lost value of tapped oil fields far beyond the amount the companies actually paid for the oil rights.
Other tax breaks were born of international politics. In an attempt to deter Soviet influence in the Middle East in the 1950s, the State Department backed a Saudi Arabian accounting maneuver that reclassified the royalties charged by foreign governments to American oil drillers. Saudi Arabia and others began to treat some of the royalties as taxes, which entitled the companies to subtract those payments from their American tax bills. Despite repeated attempts to forbid this accounting practice, companies continue to deduct the payments. The Treasury Department estimates that it will cost $8.2 billion over the next decade.
It's a shame about Solyndra. Sounds like they were a victim of being too soon with the technology and predatory competition. It's a tough world, getting tougher with China, Inc. As a Bay Area resident and Silicon Valley fan, I'm used to the "1 out of 10 make it" model and occasional major flame outs; WebVan comes to mind. Last time around, at least George Bush waited to trash the Valley model on his only Bay Area visit after Wall Street destroyed the Internet revolution. We can only guess how many jobs were lost were lost when investment dried up overnight, but perhaps today folks only like the "sure thing" jobs. Too bad the Internet never panned out as advertised and thank God for all those who "told us so". Now, we get trashed on innovation before we even get off the ground.
This will all even out. As the middle class grows in China they'll get wealthy and request higher wages just as it happened in Japan and Korea. Then, if we're lucky, maybe our new risk averse culture will produce our own set of competitive low wage workers and Chinese kids can giggle at the cute, round eyed bobbleheads stamped "Made in the USA".
Sometimes I'm not sure the rest of the country deserves Silicon Valley.
The numbers you quote may have been true 20yrs back, but the energy payback period for even home solar PV got to be well under 5years a long time ago. For CIGS maybe under 1 year. See this old ref for example and the quote below :
"Energy payback estimates for rooftop PV systems are 4, 3, 2,
and 1 years: 4 years for systems using current multicrystalline-
silicon PV modules, 3 years for current thin-film modules,
2 years for anticipated multicrystalline modules, and
1 year for anticipated thin-film modules"\
Solar Panel Makers Spectacular Collapse: A monument to delusional subsidies provided by wishful politicians; a reminder that the market crushes anyone without a value proposition that compounds truthful profits.
Deploying solar was only real because of massive solar subsidies by Germany, Spain, Greece, Italy, Portugal and the US. Aside of Germany, all the other countries have seen their public debt downgraded or are on the edge of it.
Is there a message on that observation for politicians playing to be VC/PE investors with our children's future taxes?
Um, have you been watching China's actions in the global petroleum industry? How about the China/Iran oil barter? How about the newly launched Chinese aircraft carrier and its potential impact on the South China Sea? The South China Sea is chock full of international territorial disputes and potentially full of oil and gas.
Personally, I like solar, particularly solar-thermal power generation. But, I don't want to put all of our eggs in the solar-electric basket. We should be actively pursuing ALL commercially-viable energy sources.
“Big clean-energy projects that have relied on a combination of federal tax incentives, subsidies, and loan guarantees are almost certain to see that go off a cliff this fall,” said David Victor, an energy-policy expert at the University of California (San Diego). “It’s going to be a big problem for the industry.”
Energy Secretary Steven Chu and Navy Secretary Ray Mabus joined Biden and Reid for the energy summit, a gathering of alternative-energy advocates that for the past three years has set the table for the congressional clean-energy agenda. The leaders sounded a defensive note, acknowledging that the industry’s government support is under attack, and urgently sought to make the case to keep clean-energy spending even as other government programs are slashed.
From the studiously fair National Journal at:
LAS VEGAS--The Obama administration is trying desperately to head off what many economists say is a coming crash in the clean-energy industry. To make the case, Vice President Joe Biden on Tuesday equated spending on clean energy during a recession to spending on crucial weapons and technology during a war, previewing a theme likely to recur this fall as the White House and Democrats try to save what’s left of the federal clean-energy budget.
In the next year, the small but growing U.S. clean-tech sector, which President Obama sees as crucial to transforming the nation’s energy economy, will face a trifecta of challenges: Roughly $30 billion in federal spending the industry enjoyed in the 2009 stimulus law will come to an end; the congressional panel charged with slashing $1.2 billion from the federal deficit this fall will likely target the government’s existing clean-energy tax credits, subsidies, and research funding; and new energy policies that Obama once hoped would spur massive market demand for renewable energy—such as a national clean-energy mandate or a price on carbon pollution—will be halted in Congress with a Republican-controlled House.
Complaining about China government subsidies without looking at the US govt subsidies is a bit hypocritical. If I'm reading the various news articles correctly, we (US taxpayers) subsidized Evergreen with low cost guaranteed loans of several hundred million $'s, and similarly for Solyndra something like $500M. Highly unlikely the US govt will see those loans paid back. The big difference here is that the Chinese companies had something of a viable business plan, whereas the US companies had very good lobbyists and politicians who were receptive to crappy business plans that fit with ideological politics.
At least the US taxpayers got a glorious Taj Majal along the freeway in Fremont. Perhaps it could be turned into a Sunday worship site for the church of "true believers in green energy at any cost".
Drones are, in essence, flying autonomous vehicles. Pros and cons surrounding drones today might well foreshadow the debate over the development of self-driving cars. In the context of a strongly regulated aviation industry, "self-flying" drones pose a fresh challenge. How safe is it to fly drones in different environments? Should drones be required for visual line of sight – as are piloted airplanes? Join EE Times' Junko Yoshida as she moderates a panel of drone experts.