Published on September 2nd, 2010 | by Guest Contributor
Digging Into Conservative Misconceptions of Energy Costs
Here is an excellent guest post by an energy veteran and businessman on the costs of clean energy compared to old, dirty energy.
We’ve been writing on clean energy more and more these days. It is clearly one way to address global climate change, air pollution, and water pollution. And with another offshore oil production facility catching fire today, the sense of urgency to switch over from “dirty” to “clean” energy is growing.
In this guest post from Tom Rooney, President and CEO of SPG Solar in Novato, California we get a deeper look into the real costs of energy. Tom has been on CSPAN and Fox Business News recently, and his commentaries have been “in the New York Times, Los Angeles Times, Miami Herald and hundreds of papers in between.”
As an intro to this story, Tom wrote this to me:
Conservatives get it wrong on energy because they are wrong on the costs of energy.
Including the usually reliable folks who write the editorials for the Wall Street Journal.
In a recent editorial, the WSJ condemned solar energy as “premature and speculative.” This editorial appeared a few months after the paper’s parent company announced plans to build one of the larger solar facilities in the country.
This disconnect about costs is why I wrote this commentary for the Planetsave.
Enjoy the post below (with a little emphasis, subheadings, and a few links added by me).
Conservatives, let’s talk about energy. And why so many conservatives are so wrong — so liberal, even — on wind and solar energy.
Let’s start with a recent editorial from the home of “free markets and free people,” the Wall Street Journal. Photovoltaic solar energy, quoth the mavens, is a “speculative and immature technology that costs far more than ordinary power.”
So few words, so many misconceptions. It pains me to say that because, like many business leaders, I grew up on the Wall Street Journal and still depend on it.
But I cannot figure out why people who call themselves “conservatives” would say solar or wind power is “speculative.” Conservatives know that word is usually reserved to criticize free-market activity that is not approved by well, you know who.
Solar and Wind Energy Is Being Used NOW
Today, around the world, more than a million people work in the wind and solar business. Many more receive their power from solar.
Solar is not a cause, it is a business with real benefits for its customers.
Just ask anyone who installed their solar systems five years ago. Today, many of their systems are paid off and they are getting free energy. Better still, ask the owners of one of the oldest and most respected companies in America who recently announced plans to build one of the largest solar facilities in the country.
That would be Dow Jones, owners of the Wall Street Journal.
Now we come to “immature.” Again, the meaning is fuzzy. But in Germany, a country 1/3 our size in area and population, they have more solar than the United States. This year, Germans will build enough solar to equal the output of three nuclear power plants.
What they call immaturity our clients call profit-making leadership.
But let’s get to the real boogie man: The one that “costs far more than ordinary power.”
I’ve been working in energy infrastructure for 25 years and I have no idea what the WSJ means by the words “ordinary power.” But, after spending some time with Milton Friedman, whom I met on many occasions while studying for an MBA at the University of Chicago, I did learn about costs.
And here is what every freshman at the University of Chicago knows: There is a difference between cost and price.
Solar relies on price supports from the government. Fair enough — though its price is falling even faster than fossil fuels are rising.
But if Friedman were going to compare the costs of competing forms of energy, he also would have wanted to know the cost of “ordinary energy.” Figured on the same basis. This is something the self-proclaimed conservative opponents of solar refuse to do.
But huge companies including Wall Mart, IBM, Target and Los Gatos Tomatoes figured it out. And last year so did the National Academy of Sciences. It produced a report on the Hidden Costs of Energy that documented how coal was making people sick to the tune of $63 billion a year.
And that oil and natural gas had so many tax breaks and subsidies that were so interwoven for so long, it was hard to say exactly how many tens of billions these energy producers received courtesy of the U.S. Taxpayer.
Just a few weeks ago, the International Energy Agency said worldwide, fossil fuels receive $550 billion in subsidies a year — 12 times what alternatives such as wind and solar get.
Whatever that costs, you know it starts with a T.
All this without hockey stick graphs, purloined emails or junk science.
When you compare the real costs of solar with the fully loaded real costs of coal and oil and natural gas and nuclear power, apples to apples, solar is cheaper.
That’s not conservative. Or liberal. That comes from an ideology older and more reliable than both of those put together: Arithmetic.
Top Photo Credit: SkipSteuart via flickr