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Guest Column

August 31, 2013

What makes good sense, and what doesn't

By Mike Zagata

Local Commentary

Following the recent visit to upstate New York by the President, a local TV station carried an interview with someone who was there to protest the exploration for and production of fossil fuels. In their place he advocated for government subsidy of renewable forms of energy like solar and wind power. That’s a position that sounds good on the surface and one that, over time, most of us would support.

There are, however, some near-term issues that would need to be addressed. First of all is the fact the government has been supporting the development of “new” energy sources since at least as far back as the 1980s. At that time the US Synthetic Fuels Corporation supported attempts to find a way to extract the oil from oil shale in a manner that would enable it to be competitive with oil produced the traditional way, i.e. drilling exploratory wells into potentially oil rich rock formations. Even with the cost of the “dry holes” included, shale oil couldn’t compete on an economic basis even though we knew exactly where it was. Then in the early 1990s the US government got involved again – this time by providing incentives to drill for coal bed methane – methane trapped in association with coal formations. That too fizzled out in short order – and you and I, as tax payers, footed the bill. Now we want to do the same with “renewable” energy sources. In fact, we already are subsidizing them, e.g. $500 million for “Solindra “ that yielded no measurable benefits and tax credits of up to $7,500 per car for electric vehicles (an existing subsidy). The honest truth is that at this point in time “renewable” can’t compete with fossil fuels when held to a standard of being cost-effective. If we heated a school district with solar power right now it would cost about 15 times as much as it would to heat it with gas. That translates to either heating with gas or oil, or heating with solar and letting teachers go.

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