Can Energy Subsidies Be Simplified?

President Obama’s 2011 State of The Union Address included a call for 80% of the United States’ electricity to come from clean energy by 2035.  The President focused on investing in the future and clean energy but found time to single out the oil industry as “doing just fine on their own” and to ask Congress to eliminate the billions of dollars going to them.  Is it too simple to weigh all energy sources by one well rationed standard and provide subsidies on a relative basis?  Base the standard on energy vs. impact.

Both factors, energy and impact, are composed of variables.  The ideal combination would be high energy and low impact but no one fuel provides this combination.  Instead the variables should be weighed and subsidies awarded relative to the energy vs. impact score of the energy source.

The energy content of an energy source relates to the supply needed to do a unit of work.  In simple terms, how much of an energy source is needed to provide for the energy demanded.  The energy content of fossil fuels is considerably more dense than that of renewable energy sources.  A gallon of oil has greater energy content than a gallon of water.  This measure is one-time use.

The impact includes some variables that are difficult, at best, to measure.  For example, the impact of particulate matter from the burning of coal on the health of a population is difficult to quantify.  Comparisons of populations with and without a coal burning power plant can be made but a note of caution: correlation does not always equate to causation.  Differences in the quality of coal or climate between two locations can skew results.  The impacts of harvest, production, and consumption include far reaching costs affecting environmental and public health.

What is the impact of transporting and storing a given energy source and can it even be done?  Today, electricity production is an on-demand business.  The storage of electricity is inefficient compared to producing and transmitting directly.  Hydro, oil, gas, and coal can all be stored prior to being used for energy production.  Please don’t spill.  Solar and wind cannot be stored in their raw form.  Additionally, solar and wind are not always available in a given location.

The gallon of oil has greater impact than the gallon of water and the water can be used again.  This is not to say that renewable energy doesn’t have an impact.  Large scale hydro projects have a number of impacts.  The creation of reservoirs change ecosystems and relocate people, to say nothing of the impact of a containment failure.  Even large solar farms have the desert tortoise on the defensive.

Allocation of subsidies based on an energy vs. impact standard helps to level the field and follow President Obama’s direction.  Subsidies have contributed to the fossil fuel infrastructure and should now be used to fund research and build a renewable energy infrastructure.  Perhaps the details of subsidies aren’t simple but using an energy vs. impact standard allows for a method of comparing fossil and renewable energy in order to apply subsidies fairly.

Photo Credit:  Argonne National Laboratory