Monday, June 6, 2016

Leviathan seizes your hard-earned money at gunpoint to finance play-like energy forms

And they ladle lots of it on these "companies":

According to data from Subsidy Tracker — a database maintained by Good Jobs First, a Washington, D.C.–based organization that promotes “corporate and government accountability in economic development and smart growth for working families” — the total value of the subsidies given to the biggest players in the U.S. wind industry is now $176 billion.

That sum includes all local, state, and federal subsidies as well as federal loans and loan guarantees received by companies on the American Wind Energy Association’s board of directors since 2000. (Most of the federal grants have been awarded since 2007.) Of the $176 billion provided to the wind-energy sector, $2.9 billion came from local and state governments; $9.4 billion came from federal grants and tax credits; and $163.9 billion was provided in the form of federal loans or loan guarantees. 
General Electric — the biggest wind-turbine maker in North America — has a seat on AWEA’s board. It has received $1.6 billion in local, state, and federal subsidies and $159 billion in federal loans and loan guarantees. (It’s worth noting that General Electric got into the wind business in 2002 after it bought Enron Wind, a company that helped pioneer the art of renewable-energy rent-seeking.) 

NextEra Energy, the largest wind-energy producer in the U.S., has received about 50 grants and tax credits from local, state, and federal entities as well as federal loans and loan guarantees worth $5.5 billion. That’s more than what the veteran crony capitalist Elon Musk has garnered. Last year the Los Angeles Times’s Jerry Hirsch reported that Musk’s companies — Tesla Motors, Solar City, and Space Exploration Technologies — have collected subsidies worth $4.9 billion. NextEra’s haul is also more than what was collected by such energy giants as BP ($315 million) and Chevron ($2.2 billion).

About $6.8 billion in subsidies, loans, and loan guarantees went to foreign corporations, including Iberdrola, Siemens, and E.On. Those three companies, and five other foreign companies, have seats on AWEA’s board of directors.

Many of the companies on the AWEA board will be collecting even more federal subsidies over the next few years. In December, the Congressional Joint Committee on Taxation estimated that the latest renewal of the production tax credit will cost U.S. taxpayers about $3.1 billion per year from now until 2019. That subsidy pays wind-energy companies $23 for each megawatt-hour of electricity they produce.

That’s an astounding level of subsidy. In 2014 and 2015, according to the Energy Information Administration, during times of peak demand, the average wholesale price of electricity was about $50 per megawatt-hour. Last winter in Texas, peak wholesale electricity prices averaged $21 per megawatt hour. Thus, on the national level, wind-energy subsidies are worth nearly half the cost of wholesale power, and in the Texas market, those subsidies can actually exceed the wholesale price of electricity.

Of course, wind-energy boosters like to claim that the oil-and-gas sector gets favorable tax treatment, too. That may be so, but those tax advantages are tiny when compared with the federal gravy being ladled on wind companies. Recall that the production tax credit is $23 per megawatt-hour. A megawatt-hour of electricity contains 3.4 million Btu. That means wind-energy producers are getting a subsidy of $6.76 per million Btu. The current spot price of natural gas is about $2.40 per million Btu. Thus, on an energy-equivalent basis, wind energy’s subsidy is nearly three times the current market price of natural gas.

MidAmerican Energy Company, a subsidiary of Berkshire Hathaway, has a seat on AWEA’s board. Berkshire’s subsidy total: $1.5 billion — and it’s primed to collect lots more. In April, the company announced plans to spend $3.6 billion on wind projects in Iowa. Two years ago, Berkshire’s CEO, Warren Buffett, explained why his companies are in the wind business. “We get a tax credit if we build a lot of wind farms. That’s the only reason to build them,” he said. “They don’t make sense without the tax credit.”
Keep in mind that the $176 billion figure in wind-energy subsidies is a minimum number. It counts only subsidies given to companies on AWEA’s board. Not counted are subsidies handed out to companies like Google, which got part of a $490 million federal cash grant for investing in an Oregon wind project.

Nor does it include the $1.5 billion in subsidies given to SunEdison, the now-bankrupt company that used to have a seat on AWEA’s board. (To download the full list of subsidies garnered by AWEA’s board members, click here.) Nor does that figure include federal money given to J. P. Morgan and Bank of America, both of which have a seat on AWEA’s board. The two banks received federal loans or loan guarantees worth $1.29 trillion and $3.49 trillion, respectively. In an e-mail, Phil Mattera, the research director for Good Jobs First, told me that the loan and loan-guarantee figures for the banks include the federal bailout package known as the Troubled Asset Relief Program as well as “programs instituted by the Federal Reserve in the wake of the financial meltdown.” When all of the subsidies, loans, and loan guarantees given to the companies on AWEA’s board are counted, the grand total comes to a staggering $5.1 trillion. 
Now, get back to work. The Freedom-Haters are counting on you to pony up.


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