Democrats in Congress are planning a major and long overdue step in the right direction on energy independence and reduction of carbon emissions. Let's hope they get it right.
In broad strokes, the plan is to eliminate various tax incentives and other subsidies for the oil and gas industry and devote those funds instead to supporting renewable energy sources, such as wind, solar, geothermal and biofuels.
On the oil and gas side, Democratic leaders have pretty much figured out what to do. They will roll back the portion of a broad 2004 manufacturing tax cut that went to the oil and gas industries--an unnecessary incentive for an industry raking in billions in profits. In addition, they will seek to force the industry to pay royalties on new offshore production in the Gulf of Mexico and adjust the way certain tax deductions are computed.
This is a good first step that will raise around $15-$17 billion. We urge Congress to also look hard over the next year at other tax breaks and subsidies provided to the oil and gas industries and begin eliminating them as well. There's no point continuing to subsidize fuels that spew climate altering carbon into the air. If they play their cards right, Democrats might well get a few Republicans to join them in this process of beginning to wean ourselves of our addiction to oil.
On the renewable energy side, Democrats haven't yet agreed how to spend the money garnered from the oil and gas side. Let's hope they don't mess this one up.
First, none of the money should go to nuclear energy. Yes, it is true that nuclear generating plants are essentially carbon free. The Curmudgeon endorses building new nuclear plants and expanding the percentage of our electricity generated from such facilities. However, new direct government subsidies (on top of existing ones already in place) are not the answer to the nuclear industry's problems. Nuclear power is competitive economically. To get nuclear going, the federal government needs to take other steps to help reduce regulatory hurdles and help the public understand the green benefits of nuclear power.
Second, biofuels, particularly ethanol, are already getting huge subsidies. They don't need any more. If anything, we're going overboard on ethanol produced from corn, which really isn't all that carbon friendly. So, if Congress wants to put the money to good use in this area, it should specifically designate it for funding of research and demonstration projects intended to produce biofuels from cellulosic plants, such as corn stalks and switch grass, where energy efficiencies can be much greater.
In broad strokes, the plan is to eliminate various tax incentives and other subsidies for the oil and gas industry and devote those funds instead to supporting renewable energy sources, such as wind, solar, geothermal and biofuels.
On the oil and gas side, Democratic leaders have pretty much figured out what to do. They will roll back the portion of a broad 2004 manufacturing tax cut that went to the oil and gas industries--an unnecessary incentive for an industry raking in billions in profits. In addition, they will seek to force the industry to pay royalties on new offshore production in the Gulf of Mexico and adjust the way certain tax deductions are computed.
This is a good first step that will raise around $15-$17 billion. We urge Congress to also look hard over the next year at other tax breaks and subsidies provided to the oil and gas industries and begin eliminating them as well. There's no point continuing to subsidize fuels that spew climate altering carbon into the air. If they play their cards right, Democrats might well get a few Republicans to join them in this process of beginning to wean ourselves of our addiction to oil.
On the renewable energy side, Democrats haven't yet agreed how to spend the money garnered from the oil and gas side. Let's hope they don't mess this one up.
First, none of the money should go to nuclear energy. Yes, it is true that nuclear generating plants are essentially carbon free. The Curmudgeon endorses building new nuclear plants and expanding the percentage of our electricity generated from such facilities. However, new direct government subsidies (on top of existing ones already in place) are not the answer to the nuclear industry's problems. Nuclear power is competitive economically. To get nuclear going, the federal government needs to take other steps to help reduce regulatory hurdles and help the public understand the green benefits of nuclear power.
Second, biofuels, particularly ethanol, are already getting huge subsidies. They don't need any more. If anything, we're going overboard on ethanol produced from corn, which really isn't all that carbon friendly. So, if Congress wants to put the money to good use in this area, it should specifically designate it for funding of research and demonstration projects intended to produce biofuels from cellulosic plants, such as corn stalks and switch grass, where energy efficiencies can be much greater.
Third, wind energy is already competitive in much of the country. But we can still learn to make even more efficient turbines and encourage communities to accept wind generation in urban areas. And expanding our wind generation capacity rapidly makes good sense all around.
Solar energy remains an economic challenge in most of the country. Subsidizing solar will help this sector become more competitive and encourage development of more efficient solar panels and increased manufacturing capacity.
Other renewables, such as geothermal (mainly in the west) and wave energy from the oceans would certainly benefit from increased funding.
Last, but certainly not least, we would all benefit tremendously from rapid development of vastly more fuel efficient automobiles. The two technologies with the most promise are hybrid autos with an extra plug-in battery, which can achieve 70 miles per gallon of gas used, and hydrogen powered fuel cell autos, with zero emissions and zero gasoline use. Anything Congress can do to speed adoption of these technologies will have huge payoffs down the road.
Is it possible that Congress will listen to the experts and do the right thing? We hope so. At a minimum, we hope that politics--such as overencouraging corn-based ethanol production to benefit already oversubsidized corporate farms--will play a relativel small role in shaping our priorities.
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