Robber Baron? I Think Not!

I’ve been reading about how some people think that T. Boone is asking for too much in subsidies for wind power generation and how he’s going for a government sanctioned land grab for transmission capability.

For the sake of argument, let us assume that the nay sayers are right and that he is trying to do such. How does that make it any different than any other energy entity?

Let’s talk about subsidies for a bit.

In FY2007:

$3,302,000,000 was provided for coal and refined coal
$2,149,000,000 was provided for natural gas and petroleum liquids
$1,267,000,000 was provided for nuclear
(http://www.eia.doe.gov/oiaf/servicerpt/subsidy2/pdf/execsum.pdf)


While I couldn’t find any solid number on oil, I’m using an estimate:
$6,750,000,000 for oil ($27*10^9 over 4 years)

(http://democrats.senate.gov/journal/entry.cfm?id=300196&)

Since we also need to factor in the subsidies for shipping coal to the power plants, we need to account for that:

$7,000,000,000 for freight rail
(http://www.fra.dot.gov/us/content/177)


So far that’s about $20,500,000,000 in subsidies per year that I’ve found, and I wasn’t even looking very hard. I’m sure the numbers would be much higher if I actually had the time to do proper research.

All renewable combined received about $4,875,000,000 in 2007, with $2,990,000,000 going to ethanol production
http://www.eia.doe.gov/oiaf/servicerpt/subsidy2/pdf/chap2.pdf

If the numbers from the Department of Energy are correct, wind generation made up about 30.3 billion kilowatt hours nationally in 2006.

With a production tax credit of $0.019/kilowatt-hour, that’s about $575,700,000….only 2.5% of the subsidies that all other energy sources and infrastructure received when combined.

I will cede that as a cost per kilowatt-hour generated, the amount is high for wind generation, but some other things should be taken into account:

Most of the infrastructure to support conventional forms of power generation have been heavily subsidized. Over 100 years for the rail system (mostly in the form of land) and since the 1930’s for electrical transmission and distribution.

In the big scheme of things, it’s very difficult to talk about subsidies and have the numbers mean anything. 1,000,000 acres of land for railroads in the 1870’s is difficult to compare with $30,000,000 in government backed loans for electrical transmission systems in the 1930’s or $2,990,000,000 in tax credits for ethanol production in the new millennium.

I don't see "Robber Barons" in the shadows.

I see a wise businessman asking for a fair shake.