8 Nov 2010

Natural gas prices are low now, but renewables make more sense long-term

Written by Jim Pierobon


Perhaps its the state of the Fourth Estate (aka the media) that no longer can take the time to provide sufficient context in their coverage of clean energy developments; so I will attempt to do so here.

First up: The New York Times reported Sunday on the relatively high up-front cost of solar, wind and other renewables vis a vis the price of natural gas and other traditonal energy sources without tallying the enormous tolls, to name just a few, that fossil fuels and nuclear energy are taking on:

1)  human lives;

2)  the air we breathe;

3) the water we drink;

4) long-term costs and risks to consumers;

5) the U.S. debt and annual Federal budget deficit; and, oh yes..

6) our national security.

When The Times and other journalists assert, as it does in the online caption that “Fossil fuels are cheaper than wind for energy production” it might compare favorably if you include ONLY the cost  of producing the fuel. But that does not include Federal and state incentives and tax breaks; the costs we know full well of cleaning up after breakdowns in pipelines transporting natural gas, crude oil or refined products; the terrible price we pay — including human lives — from accidents in coal mines, dams designed to contain coal ash sludge and explosions on offshore oil rigs.

Environmental Law Institute documents the imabalance of Federal subsidies from 2002-2008 for fossil fuels vs. traditional renewables.

We all owe it to ourselves and to generations to follow to compare apples-to-apples. If you want such a comparison focusing only on Federal tax breaks and other incentives for renewables vis a vis fossil fuel sources, this study by the Environmental Law Institute is a must read and reference point in this debate. The upshot: the value of incentives for fossil fuels (not nuclear) vis a vis renewables (not but ethanol) during the seven years ending in 2008 was about $70 billion vs. about $12 billion. In other words, 85 cents of every dollar in this mix goes to make it easier to produce dirty fuels.

AND NOW THIS:  The International Energy Agency has released its annual World Energy Outlook urging strong and sustained government support for the deployment of renewable energy.

The agency tally 2009 subsidies for renewables at $57 billion and called for that to increase to $205 billion by 2035. Fossil fuel subsidies stood at $312 billion in 2009.

“The share of modern renewable energy sources, including sustainable hydro, wind, solar, geothermal, modern biomass and marine energy, in global primary energy use triples between 2008 and 2035 and their combined share of total primary energy demand increases from 7 per cent to 14 per cent,” according to the agency.  The IEA urged that they be eliminated to accelerate the transition to renewables (emphasis added by author).

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