April 20, 2005
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"I told some people the other day, I know the oil and gas business pretty well, and I don't think we need tax incentives to encourage exploration when you got price driving exploration,"
President George W. Bush, The Washington Times, January 12, 2005. For the fifth straight year, the House of Representatives is set to debate an energy bill chock-full of corporate welfare subsidies for the oil, gas, coal, and nuclear industries and short on innovative policy solutions to address our nation's energy problems. Last year, the Energy Information Administration concluded that despite spending billions of dollars, American taxpayers will get nothing in return - not lower gas prices, not lower electricity prices, not even less oil dependence. If last year's energy bill had passed, America's imports of oil would have increased by 85 percent by 2025. So how did Congress respond to the damning analysis of last year's bill? You guessed it: by re-introducing virtually the same bill this time around. The latest House bill contains more than $80 billion in authorized spending and another $8 billion in tax breaks, 95 percent of which are for the oil, gas, coal and nuclear industries. These industries received more than $500 billion in subsidies and tax breaks from 1950-97. Now, with oil prices and profits hovering near record levels, we're going to throw even more money at them. Good work if you can get it.
Going Nuclear
Closing in on the ripe old age of 60, the nuclear power industry is anticipating some huge gifts in the form of lucrative payouts from the House energy bill. Though industry once heralded nuclear power as a source that would be "too cheap to meter," it has turned out to be the energy source too expensive to afford. The federal government has always maintained a unique public-private partnership with the nuclear industry, wherein the costs and risks of nuclear power are borne by the public, but the profits are enjoyed by private companies. This energy bill continues this perverse tradition, doling out more than $6.1 billion in new subsidies for the nuclear industry. These include incentives to mine uranium, tax breaks for clean-up, and funding for research, development, and site licensing. Rest assured that by the time the energy bill winds its way through the Senate, nuclear subsidies will burn brighter than an over-trimmed Christmas tree. A recent analysis shows that the nuclear power industry is really itching for taxpayer subsidies to help them build new plants - something they haven't been able to do for more than 30 years. These include production tax credits, power purchase agreements, loan guarantees and investment credits. If Wall Street is unwilling to invest in nuclear power after 60 years, then maybe the federal government should get out of the business as well. On Second Thought...Maybe Not One of the poster children for this program's waste is the Healy Coal Plant in Alaska, a small 50 MW plant that cost $242 million to build. As a part of the Clean Coal Program, taxpayers covered $117 million of this cost. Yet once the plant was built, the operator of the plant - Golden Valley Electric Association - claimed the plant was too expensive to run, and it's been sitting idle ever since. Now, Golden Valley is using the energy bill to squeeze another $125 million out of taxpayers to convert the plant to a conventional unit. Talk about double dipping. |
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