Tea Party Opportunities
A Taxpayer-Funded Sucker Play for the 21st Century
I have to admit, elections put me in a bit of a funk.
Let's just say that no matter who I vote for — whether Republican or Democrat — I always experience a sense of buyer's remorse.
Every year, these candidates promise the world, but rarely deliver. It's almost as if we're back in high school, listening to a pretty girl who's running for class president promise to limit homework to just two days a week...
These candidates come out and tell us how they're going to do all these wonderful things, but chances are, nothing substantial is going to get done.
Of course, with the recent victory of Tea Party-supported candidates, some are hopeful that they'll be able to shake things up and live up to their promises of limited government, no more excessive taxes, a balanced budget, and no exorbitant national debt.
But I'm skeptical. I've heard this song and dance before, yet I'm sitting here today, watching the continued erosion of our freedoms and our economy.
And what's most frustrating is that this crisis has been in the making for decades.
But who knows, despite some really stupid things said by Tea Party-supported candidates this year (no Congresswoman Bachmann, same-sex marriage is NOT the biggest issue that will impact our nation in the last 30 years), there are a number of Tea Party winners who now have the opportunity to live up to their ideals and their promises.
Especially when it comes to the economy.
The tax burden that keeps on giving
It doesn't take a rocket scientist to know that much of our economic burden today can be traced back to our reliance on fossil fuels.
You may remember earlier this year when the Environmental Law Institute released a report that showed subsidies for fossil fuels totaled approximately $72 billion from 2002 to 2008. During that same time period, subsidies for renewables came to about $29 billion.
And of those renewable subsidies, more than half were set aside for corn-based ethanol — providing even more kickbacks for an already heavily-subsidized agricultural system that typically excludes small local and organic farms.
You can read that details of that report here.
There was also an interesting study that came out a few years ago that showed the security costs of having the U.S. military protect the oil supplies of the Persian Gulf. That bill came to around $44 billion in 2007.
And then there was that DOE study in 2000 which found that oil supply disruptions, price hikes, and loss of wealth suffered through oil market upheavals have cost the U.S. economy around $7 trillion (in 1998 dollars) over the thirty years from 1970 and 2000.
My friends, that's more than half the U.S. national debt!
Now you won't see any of this stuff figured into the equation when you pull into the gas station... But the truth is, if we weren't directly and indirectly subsidizing our reliance on oil, we'd be shelling out anywhere between $8 to $10 a gallon for 87 Octane.
That's not a free market. That's a welfare scam.
Where we're heading
Now I'm not so naïve to believe that we're going to see an end to subsidies for fossil fuels.
Despite coal and oil being mature and profitable industries, the handouts will continue simply because you and I do not dictate OUR energy policy. That's left up to the special interest puppet masters who spin truth and fill bureaucratic troughs.
However, the realities of peak oil, national security vulnerabilities, and a new industrial revolution in clean energy (in which we're clearly allowing China to pummel us) will be enough to force a transition of our energy economy.
So let's review a few things we can look forward to in the coming months...
The first will be “clean coal.” Mark my words, this will prove to be one of the biggest taxpayer-funded sucker plays of the 21st century.
But just like the bureaucrats in the Midwest who took us for a billion-dollar spin on that corn-based ethanol train, you can be certain that there will be plenty of senators from coal-producing states that will have no problem taking your tax dollars to feed this pig.
It's likely that very soon, we will see enough bipartisan support to push through a 15 percent renewable energy standard. Certainly this will offer some support to solar, wind, and geothermal.
Nuclear could get some love here, too — if a select group of folks in Washington are somehow able to include it in this renewable energy standard.
But to be honest, I don't see that happening. Nuclear is still a tough sell.
And while I have little doubt that new nuclear plants will be on the horizon, I don't see any politician sticking his neck out over including nuclear in a renewable energy standard.
Besides, President Obama has already given the nuclear industry a very nice gift: a call for increasing federal guarantees for new nuclear plants to $54 billion from $18.5 billion.
I guess that was a lot of money back before we started printing it like junk mail credit card applications and Victoria's Secret catalogs.
Sarcasm aside, I don't see the nuclear industry having any problems moving forward, now that there's even more bipartisan support for it.
It is also likely that there will be more bipartisan support for raising the corporate average fuel economy standard, as it's not a tax burden, and the result of raising the standard is less oil consumption. If presented without the influence of a few special interests, it's a pretty easy sell.
This should certainly add more support to the development of electric vehicles and electric vehicle infrastructure.
The people have spoken
Over the past week, we've been hearing a lot about how “the people have spoken.”
Now the question is, Will the policy makers listen, now that they've secured their jobs for another 4 years?
I already know what to expect from the career politicians on both sides of the aisle: more bickering and complacency.
But the new guys... the new blood... the ones that campaigned on promises of fiscal responsibility...
Will they put their money where their mouth is? Will they address and call to remove that billion-dollar fossil fuel tax burden and allow these industries to compete without the assistance of your tax dollars?
I guess we'll soon find out.
In the meantime, consider the following...
In the three minutes it's taken you to read this, we've spent about $68,493 to subsidize all that “cheap” oil and coal.
We claim that we value a real, honest free market.
But when it comes to energy, in practice, we've yet to live up to that claim.
To a new way of life, and a new generation of wealth...
Energy Demand will Increase 58% Over the Next 25 Years
After getting your report, you’ll begin receiving the Energy and Capital e-Letter, delivered to your inbox daily.