In a response to my prior letter regarding New Jersey’s $100 million taxpayer-subsidized offshore wind scheme, the Sierra Club’s Laura Lynch insinuated that electricity production from natural gas would be somehow comparable to offshore wind power if subsidies are accounted for. One problem: The cold, hard facts belie her assertion.
The first question to ask is why did Lynch reference the amount of subsidies doled out by the federal government to the energy industry from years 2000-2008? The simple answer: Under the current administration, subsidies for wind and solar have exploded.
For example, according to the U.S. Department of Energy, in 2010 gas and oil received $2.8 billion in subsidies (most of which are actually tax credits and not direct subsidies) while the wind industry received $5 billion. Since 2007, subsidies for wind have increased tenfold.
Yet are taxpayers getting a good bang for their buck for this so-called investment? The best way to understand the value of taxpayer subsidies in the energy sector is by calculating how much productivity is achieved on a megawatt hour basis. Again, using the U.S. Department of Energy’s own data we find that natural gas, oil and coal receive 64 cents per megawatt hour. Wind, on the other hand, receives an astounding $56.29 per megawatt hour! Solar is even worse at a whopping $777 per megawatt hour!
Put another way, for every dollar that goes to vilified fossil fuel industries to produce a megawatt of electricity, the wind industry gets $88! And since offshore wind is even more expensive than onshore wind, logically the figure would be even higher for the kind of offshore wind project authorized by the state under the Offshore Wind Economic Development Act (OWEDA).
Here’s the inconvenient truth: Offshore wind is the most expensive way of producing electricity on the planet.
The wind industry, especially offshore wind, would never be able to compete without subsidies.
The time has come time to end all subsidies for the energy sector and allow consumers and innovation to drive the free-market instead of squandering hundreds of millions of taxpayer dollars on failed “green” schemes that will only kill jobs, drive electricity prices even higher and further damage our state’s already fragile economy.
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