Obama Wants To Fund Clean Energy Research With Oil & Gas Funds 409
An anonymous reader writes "The Obama Administration has put forth a proposal to collect $2 billion over the next 10 years from revenues generated by oil and gas development to fund scientific research into clean energy technologies. The administration hopes the research would help 'protect American families from spikes in gas prices and allow us to run our cars and trucks on electricity or homegrown fuels.' In a speech at Argonne National Laboratory, Obama said the private sector couldn't afford such research, which puts the onus on government to keep it going. Of course, it'll still be difficult to get everyone on board: 'The notion of funding alternative energy research with fossil fuel revenues has been endorsed in different forms by Republican politicians, including Alaskan senator Lisa Murkowsi. But the president still faces an uphill battle passing any major energy law, given how politicized programs to promote clean energy have become in the wake of high-profile failures of government-backed companies.'"
Comment removed (Score:5, Informative)
There is no subsidy (Score:4, Informative)
Unless you count the oil depletion allowance as a "subsidy".
But by that definition, then every industry gets a "subsidy" in terms of depreciation and other tax breaks.
But how big is it? About $2.4B annually total for all oil companies between 2011 and 2012.
Obama spent more than that on failed alternative energy speculation in the same time period.
Re:Hopelessly off-target (Score:5, Informative)
The plan to collect $2 billion from oil and gas revenues is a tax. These companies don't get subsidies for being oil companies. They get tax credits for R&D investment, like any other company in the US. Politicians call these subsidies, like some call tax cuts spending, when a lowering of a tax rate is not an expenditure.
When a politician states that they want to eliminate the subsidies to oil companies, they are talking about not giving them tax credits for R&D, like any other company. As I mentioned in my first post, this R&D is largely in alternative and clean energy research. Removing the tax credits for these energy companies is counter to the professed intention of supporting alternative energy.
-- Len
Re:How is this not a good idea? (Score:5, Informative)
Secondly, there are many others that are hits, such as Tesla. In fact, if private enterprise had the success record of Chu, they would be lauded as being one of the most successful investors of all times.
Re:Hopelessly off-target (Score:5, Informative)
The money is not given away. It is a tax credit for R&D. What you seem to be suggesting is that some types of R&D are more worthy for receiving a tax break. In the larger picture of a national economy, R&D spending prepares for economic growth through either finding ways to lower cost, or produce a better product. It is incentivized in the tax code, to promote economic growth.
Carving out specific areas for different rates, is just meddling. The law of unintended consequences will guarantee that the recipients of these proposed grants will have very little to do with the professed goal. A few years ago, I saw many academic papers tack on the words "with nanotechnology" in an attempt to gain funding. Most of the projects had nothing to do with nano anything. In a similar way, these grants will go to alternative energy shams that have nothing viable in the way of technology, but loads of good intentions.
Why give money to the government to have a small portion given back? This is a policy that is anti-growth, except for governmental growth.
Not sure what free money you are talking about.
-- Len
Re:How is this not a good idea? (Score:5, Informative)
Re:Obama in other times would be Reagan (Score:2, Informative)
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As for which party hates women... Ooh ooh can I take a guess? Is it the one that The one that says women can't control their own bodies and are not entitled to birth control as part of their health insurance? [gop.com]
Re:How is this not a good idea? (Score:5, Informative)
How many? You named three. And how many "green energy" companies got federal funding?
There were 27,226 federal awards listed in the stimulus bill for energy/environment. You've named three that failed. The three companies you mentioned were part of a specific group of those awards under the control of the Department of Energy that were meant just for new technologies. There were 28 such funding deals. Of those, four went under. Others in the successful group include a very successful battery company that's not far from where I live, which now supplies batteries automakers, including Japanese and Korean companies that build cars in the US. Batteries that are also exported. Other successes include companies that are building the smart grid and even a company whose technology is being used in the natural gas industry (you know, the fracking folks you love so much).
Though the stimulus bill authorized $90 billion for green projects, about $80 billion was spent, and most of that on infrastructure. The group of 28 Dept of Energy awards totaled $34billion. It might be worth noting here that a study published this week estimates the cost of the Iraq War at $6trillion.
You gotta look beyond just the right-wing talking points.
[Source for the stimulus energy figures: http://www.cnn.com/2012/10/04/politics/fact-check-green-energy [cnn.com]
Source for the cost of the Iraq War: "Costs of War" project at Brown University's Watson Institute for International Studies. http://www.scienceworldreport.com/articles/5584/20130315/cost-iraq-war-6-trillion-dollar-costofwar.htm [scienceworldreport.com] ]
Re:Obama in other times would be Reagan (Score:1, Informative)
the problem with the republican party is that there isn't really "a" republican party... there are the sheep candidates that follow whatever the latest news is on CNN (Romney) and there are the libertarians like Ron Paul that would have had a run for the presidency if the republican primary vote was actually fair (as in whole electorates in favor of paul not being excluded).
obama won on the idiot vote (everyone on welfare wants more welfare so they will always vote for the guy promising more welfare).
Re:Hopelessly off-target (Score:4, Informative)
There is a difference between a tax credit and a tax deduction. A legitimate business expense is a tax deduction and will save you whatever you spend times your margnial tax rate. A tax credit on the other hand will save you 100% of your cost on your taxes.
Re:How is this not a good idea? (Score:5, Informative)
We have been giving welfare checks to oil companies since Rockefeller owned the government. Having that money shifted to clean energy might actually decrease the deficit. U.S. Oil companies still spend more money over seas than they do in North and South America combined. Ironically BP spends more in the Americas then U.S. based ones do; but, we take their money instead of the other way round.
Re:So.... (Score:1, Informative)
The reality is that majority of the voters are morons and that is exactly why democracy ends up as a failure as it slides towards more and more totalitarian oppressive government, since the mob votes away its freedoms in exchange of a promise of free lunch (free, only because the government promises to steal from somebody else to pay for it).
At the end there is no free lunch, anything that government offers 'for free' ends up being the most expensive thing on the menu.
There is a reason that every government program ends up in a disaster. From printing of money itself to any form of social welfare to housing to education to banking and obviously to energy. It doesn't matter what government does, all of it collapses as the fake money is pumped in, the system is first awash with money, so the government portion of the system grows beyond anything that the system would otherwise support in a free market. Then eventually the money train stops because that is what happens to all subsidies - they stop once the money run out. Of-course in the process the quality is destroyed, the prices are inflated, the free market is abandoned but it will get blamed for the inevitable final outcome, since the government always blames the free market for failures, that government actually creates.
Re:How is this not a good idea? (Score:5, Informative)
Kidding around aside, please don't diss the batteries too much. I've blown up a few lithium batteries myself. Tow were intentional. I wanted to get an idea of just what it would take to make them lose their temper. Two were unintentional. But I did learn a lot from that. I was just happy I had the foresight to have used an old toaster oven for my battery pack test chamber. Lithium battery fires are nasty. Nothing I could do more than take the toaster oven out to the parking lot and let it exhaust itself.
One learns from their mistakes. There are several things I am not going to do again. Ever.
My neighbor's car caught fire a couple of years ago. He was lucky enough to catch it in the act and pushed it out to the middle of the street. The problem turned out to be the fuel injection system, which somehow did not shut down with the rest of the car. But being fuel injection is old technology, it did not make the news.
Fisker's exploding battery did.
I hate to diss technologies because of a misunderstanding of how to use them. There was a helluva lot of airplane accidents before we got that one pretty well nailed down.
Lithium batteries are dangerous. Very dangerous. So is gasoline.
Re:How is this not a good idea? (Score:4, Informative)
The "billions" the oil companies "receive" are really the simple deductions every other business is entitled to make - just like Apple gets to "write-off" research & development cost, so to do the oil companies. Just as GE gets to "write-off" capital investments, so to do the oil companies. And, they don't "receive" money from the government, they get to keep more of the money they earned.
Re:How is this not a good idea? (Score:3, Informative)
Oddly enough, the source for those figures (if you follow back all the blogs), is Fox News:
http://nation.foxnews.com/obama/2012/10/20/list-36-obama-s-taxpayer-funded-green-energy-failures
CnCRobot, please avoid ad hominem attacks. They make it appear that you are disingenuous.