Solar Power #2: The Myth Of Subsidy, or, Where Are The Libertarians Hiding?

You remember I said that solar power was going to be a disruptive technology? Well, here's a little more background. And it's where my own father comes into the picture.

It's like this. I have heard for years…and you probably have too…that solar power would not be economical if it weren't for the fact that the government is subsidizing it. It gets special tax breaks and, in some cases, outright grants from Washington.

So, goes the logic, solar power doesn't really pay for itself. It is, in fact, a parasite. You hear it on talk shows. You see it in financial publications. If it weren't for your taxes going to those people (long haired hippie freaks and greenie weenies) then solar wouldn't exist.

Not like oil. Which is based on sound principles. And stands on its own two feet. Like a man. You betcha.

Except …except….


*

My father.

My father is an 85-year-old man. He's getting quite frail, now. He has trouble seeing. He no longer drives (thank God). He has trouble walking.

But, all the brains works just fine, thank you very much.

He's also a physicist. And, sometimes, when I take him out for coffee in the afternoons, we'll talk energy. A couple of days ago, while we were at Satellite Coffee down on Montgomery, the subject of solar power came up. He told me some of his thoughts. He mentioned the dropping costs of solar cells, and the rising costs of oil, and all the rest.

I was curious. I had never thought I'd hear such things from him…not the hardened realistist who told me how the solar tower at Sandia was basically useless.  So, as an experiment, I quoted back at him something I'd read in Forbes…about the "false economy" of solar power, and how it didn't work, and how it was only attractive because of government supports.

He gave me that smile of his. The one he reserves for moments when I've revealed a particularly endearing brand of stupidity.

"But," he said, "oil is subsidized, too."

"What? You're kidding."

"Oh, no. It is. Big time."

I whipped out the old smart phone and did a search. He was, of course, absolutely right. Big oil, big fossil fuel companies, consume government money like you would not believe. They get billions …and billions…of dollars. Either directly, or indirectly in the form of tax breaks.

I'm not sure if anyone even really knows how much the oil industry gets. I've seen numbers anywhere from $100 to $400 billion. But, if you're interested, here's some places to look. I found most of them on my cell phone that morning in the coffee shop:

*"America's Most Obvious Tax Reform Idea: Kill the Oil and Gas Subsidies," by Jordan Weissmann, The Atlantic, theatlantic.com/business/archive/2013/03/americas-most-obvious-tax-reform-idea-kill-the-oil-and-gas-subsidies/274121/

*"As Oil Industry Fights a Tax, It Reaps Subsidies," by David Kocieniewski, International New York Times, nytimes.com/2010/07/04/business/04bptax.html?pagewanted=all&_r=0

*"Fossil Fuel Subsidies in the U.S.," Oil Change International, priceofoil.org/fossil-fuel-subsidies/

Yes, folks, your taxes are going to the same vast fuel companies that are already earning jaw-dropping profits…while moving their operations and HQs overseas, the way that Halliburton moved to Dubai. Your money is going to the very same companies that announce sanctimoniously that solar and other renewable energy supplies are viable only because they get government subsidies.

Subsidies which look like peanuts compared to what the oil companies themselves get.


*

"So what I want to know," my father asked, over his triple espresso and cranberry scone, "is where are the Libertarians?"

Where, indeed?  Where are the Libertarians? Where are the Ayn Randers? Where are the defenders of free enterprise? Of less government and more freedom? Why aren't they out protesting? Why aren't they in the streets? 

Could it be they just don't know? Could it be that no one ever explained to them just how much money the fossil fuel companies were taking out of their paychecks and savings? Could none of their leaders have pointed this out to them?

Or, could it be that, in fact, their leaders have lied to them? That their leaders do not care about the free enterprise and the opportunity they claim to treasure? That, in fact, in their heart of hearts they believe that the welfare state is just fine, so long as the recipients of the monthly checks are rich and powerful corporations with many lawyers and more lobbyists? Not just ordinary serfs…like the ones they employ?

Just asking.


*


Does it make you uncomfortable to consider that thought? Perhaps you are a Libertarian and you value the power of capitalism to improve the world. Perhaps it seems to you that I am attacking the very concept of free enterprise.

I am not. I am, rather, defending it.

If it would make easier for you, remember the vast sums of money that the oil companies are getting from the government. With that in mind, it is easier to see them for what they are: not private enterprises but rather state-corporations, what the Europeans and South Americans used to call para-state or "parastatal" corporations. They look like private enterprises. Sometimes they act like private enterprises.

But they're not.

Not really.


*


The point is, if you really believe in free enterprise, in capitalism, and in opportunity for all, then government subsidies have to go…for the enormous oil companies as well as for the little solar power startups.

And if that ever happens (I know it is unlikely, but if) then it will be interesting to see who has the better chances of survival—the solar startups, tiny and new, or the fossil fuel giants, who have done so little and prospered so long.


*

But I have not explained why I said that solar would be disruptive.

For that, I must return to my conversation with my father. I asked him if I thought the oil and other fossil fuel companies would oppose solar, in whatever way they could.

He gave me that smile again. He reminded me of another news story. You probably saw it too. It seems that in Oklahoma there was an attempt by the state legislature, backed by utility and other energy companies to impose a special tax on homeowners who dared to put solar panels on their roofs (1). There were all sorts of glib reasons given for the move…it was unfair for some state residents not to pay as much for electricity as others, etc. …but come right down to it, the real reason for the law was obvious. Solar was a threat to certain special interests, and the measure was meant to punish those of us peasants who got out of line.

Need one add that a later New York Times article revealed the effort to establish such laws is being led by organizations associated with the Koch Brothers? I didn't think so (2).

My father then repeated my question to me. Would they resist? The oil companies? The fossil fuel giants? Using tactics both fair and foul, and often foul?

How could I not see…my father said… that it had already begun?

He brushed away the crumbs of the scone. "But," he added, again with the deadly smile, "that's a problem for your generation, isn't it?"

And then he suggested it might be time to leave.








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(1) weather.com/news/science/environment/oklahoma-alternative-energy-taxes-20140423

(2) nytimes.com/2014/04/27/opinion/sunday/the-koch-attack-on-solar-energy.html?_r=0