SMRs and AMRs

Sunday, October 16, 2011

Oil and Gas Had Help. Why Not Renewables?

By ROBERT B. SEMPLE Jr.
NYT

The bankruptcy of a single solar-panel company, Solyndra, has catapulted the question of federal energy policies into the news. It has also led many people to draw exactly the wrong conclusions about federal support for energy innovation and where the policies should be headed.

Solyndra was clearly a bad bet for the government, which now stands to lose all or part of about $500 million in loan guarantees. But one case hardly discredits the whole idea of government support for energy innovation. The federal government has always been in the energy business, and with good reason. Private capital may be good at identifying and incubating new technologies, but bringing those technologies to commercial scale often requires significant public capital.

Land grants, for instance, helped build the coal industry, Depression-era spending created hydroelectric dams, and the Defense Department helped develop the first nuclear reactors. The oil and gas business benefited hugely from tax breaks like the oil depletion allowances that go back to the 1920s and were intended to encourage production in what was then a risky game.

Subsidies for newer technologies follow in that tradition. As priorities have changed and many politicians have come to realize that fossil fuels exact big social costs, federal subsidies have swung slowly toward projects that produce wind and solar power and biofuels from crops and plant matter.

(More here.)

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