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Don't Miss The Great Solar Debate: Where Does the Global Solar Industry Stand? Click Here to Register! ×

Fossil Energy Knows it's a Full Contact Game – Does Cleantech?

Mike Casey
December 06, 2010  |  35 Comments

Cancun - When I started working on solar energy issues several years ago, I repeatedly heard: “Everyone loves solar.” Back then, many people in solar and other cleantech sectors saw long-term meritocracy in the energy business. Public demand, technological advances and an inevitable price on carbon were going to drive cleantech to dominance over time. “Renewable energy,” it was often said, “will soon become just plain ‘energy’.”

From the gridlocked global warming treaty negotiations here in Cancun, however, the picture seems starkly different. The Congressional climate bill fight ended in disaster, the recession tightened credit markets, and the coal and oil industries bought themselves a new Congress last month. And that global carbon market many were counting on? The most optimistic note offered by top U.S. treaty negotiator Jonathan Pershing was, “maybe next year.”

Still, cleantech possesses a great combination of assets that many industries spend considerable time and money trying to generate:

Policy momentum: California’s anti-cleantech Proposition 23 lost by a huge margin last month, and the offshore wind industry has been greenlighted by the Obama Administration.

Business success: Solar is now the fastest growing energy sector, creating jobs in all 50 states.

Wide and deep public support: Over 90% of Americans support solar energy, while 87% believe we should build more wind farms.

However, that asset combination has also moved solar, wind, battery storage, and energy efficiency technologies from being cute niceties to potentially serious market disruptors for traditional dirty energy players.

The dirty energy guys know that, and they are acting accordingly. I’m not sure clean energy can say that.

Cleantech investors, executives and leaders have a lot at stake, and they should pay attention to dirty energy’s increasingly aggressive attacks:

  • A series of anti-cleantech editorials on the Wall Street Journal editorial page.
  • Sniping from fossil-funded front groups and “experts” for hire.
  • Seemingly random hit pieces on individual renewable energy projects.
  • ExxonMobil’s New York Times front page ad falsely equating fossil fuel subsidies with those of wind and solar.
  • An emerging class of “green ingrates,” pro-dirty energy pundits posing as cleantech players.
  • Chevron’s pioneering of what I’ve begun calling, “Cleantech washing” – pretending to promote clean energy while actually undercutting it.

Virtually all of these attacks push three, interlocking memes about cleantech: 1) It’s not ready; 2) It’s too expensive; and 3) It’s unreliable. And the message discipline and sheer number of these attacks make it very likely they are being underwritten and coordinated by people with a vested interest in undercutting support for clean energy.

But if you invest or work in cleantech, should you really care? After all, customers and project financers make rational decisions, immune from a technology’s market position… don’t they?

Not according to a panel of cleantech communicators we convened during the recent Solar Power International (SPI) trade show. There, RenewableEnergyWorld.com founder and publisher Oliver Strube; pollster Jeff Levine of Gotham Research Group; Kimberly Kupiecki of Edelman; and Greentech Media editor-in-chief Michael Kanellos joined us to discuss two new polls and steps cleantech should take in the face of dirty energy attacks on cleantech.

These experts agreed:

  • Cleantech is now in a full-contact game with dirty energy, which is playing accordingly.
  • The attacks by dirty energy are serious, coordinated, and are beginning to get traction in public opinion research.
  • By generating, stimulating, or exacerbating customer concerns about readiness, cost and reliability, they are affecting the marketing and sales environment for large and small companies.
  • More than probably any other industry, cleantech has a strong interest in collective brand defense.
  • Individual cleantech businesses and investors can’t rely solely on their trade associations, much less on environmental groups or on simple public goodwill, for their advocacy. It’s in each cleantech player’s financial interest to help to mount a more concerted effort to push back against detractors.

Our panelists recommended at least three steps for cleantech to take.

1. Clean energy needs to capture peoples’ imaginations, not just their intellects

Emory University psychologist Dr. Drew Westen conducted groundbreaking research in 2004, finding that people make decisions first and foremost at the emotional level, and only then do they begin rational consideration. In fact, Westen found, humans are incapable of doing otherwise. The cleantech community should assume there’s a reason why deep-pocketed Chevron and the coal front group, America’s Power Army, have spent huge sums on advertising and marketing materials with a certain feel to them.

2. Individual companies should advocate for the cleantech industry – it’s in their individual interests

A great recent example of this is SPG Solar CEO Tom Rooney’s piece making the case why political conservatives should support clean energy. Mr. Rooney is busy running a company, but he took time to do a thoughtful, spot-on piece that generated a lot of traffic, comments and conversation. It also raised SPG Solar’s visibility and thought leadership, at very low cost.

We need more of that type of effort across the board. A lot more, in fact. At our panel, Edelman’s Kimberly Kupecki said, “One of the biggest challenges is helping solar companies talk about the context – why they matter and how they’re affecting their industry in the broader picture. It’s another way we can simply and cheaply be our own advocates.”

3. Welcome a conversation about cost

Cleantech voices need to frame the cost argument properly by relentlessly pointing out that fossil fuels’ supposed cheapness is underwritten by massive taxpayers subsidies.

The dirty energy lobby has proven highly sensitive to this counter-argument. On October 12, 2010, Solar Energy Industry Association CEO and President Rhone Resch called for cutting the “grotesque” subsidies to fossil industries. “Every year, the toxic fossil industries receive $550 billion in subsidies worldwide,” he said.

Just two weeks later, ExxonMobil ran a remarkably defensive ad in the form of an obfuscating quiz on subsidies (see below) at the bottom of the front page of the New York Times.

Our panelists were in full agreement that it’s time for the solar industry to wade into the cost conversation. If we aggressively frame that conversation accurately, we’ll win.

Bottom line: Cleantech managers and investors are busy trying to build thriving companies, but their growing victories have drawn the opposition of status quo players who don’t want them to succeed. That’s why the dirty energy industries are now spending significant resources to harden the marketing and sales environment against cleantech’s success. All the facts, figures and solid product offerings in the world won’t overcome that problem if this emerging threat isn’t faced.

Dirty energy is playing full contact. Are we ready to do the same?


The information and views expressed in this blog post are solely those of the author and not necessarily those of RenewableEnergyWorld.com or the companies that advertise on this Web site and other publications. This blog was posted directly by the author and was not reviewed for accuracy, spelling or grammar.

35 Comments

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ANONYMOUS
December 11, 2010
Mary writes in comment #34:
"It is difficult not to be drawn into the frame of those with sufficient resources and connections inside U.S. agencies to skew things in ways they can use.

It's difficult to know whom to trust regarding quantitative things in general."

Well, in general, the data from the EIA and IEA and similar organizations is pretty reliable and there are lots of academic researchers also assessing energy policy. I think the notion that these organizations produced skewed findings due to "those with sufficient resources and connections" pulling strings is entirely unfounded. Differences of opinion exist about what the best methodologies are for assessing the data, but this is common in any complex endeavor. What there ISN'T is any significant evidence of intentional bias or corruption on the part of these researchers. A great many of the PR guys from both the fossil fuel and renewable industries have a more tarnished record.
Steven
Mary Saunders
Mary Saunders
December 11, 2010
It is difficult not to be drawn into the frame of those with sufficient resources and connections inside U.S. agencies to skew things in ways they can use.

It's difficult to know whom to trust regarding quantitative things in general.

When livelihood is involved, not to mention ego and emotion, it affects everybody's equations and even what they observe to base equations on.

Nonetheless, running off to be a side-show in Cancun may not be the most effective way for conservation-minded people to do things.

Convening your own show in a place like Curitiba, Brazil, might make more sense. The reason for this is that a place like Curitiba, according to Bill McKibben, has carefully considered the least-advantaged people in how it does things, and it has made a difference in reducing poverty and in class mobility.

Of course, Brazil is not perfect, but if judged by class mobility, it is doing a bang-up job compared to some other places.

I am hearing good things about Istanbul as well. How about battling cities and countries that seem to be getting improvements, under the radar (though rich people love to go to Istanbul and Brazil, from what I hear).

Sure, this kind of battle is only going to be covered by internet sources, perhaps, but that is where the battle may have to take place anyway. People with lots of resources and control can ignore little-people issues for a long time.
Ronald STEENBLIK
Ronald STEENBLIK
December 11, 2010
(Continued from above)

"An emerging class of 'green ingrates', pro-dirty energy pundits posing as cleantech players."

Come again? What I read on the Huffington Post is an article -- a good article -- giving two examples. One is the hypocrisy of somebody who has been a beneficiary of federal subsidies for solar energy who says he objects to subsidies as a matter of principle. The other is the sniping by a Clean-tech investor against government support received by a rival. Posing as cleantech players? These guys ARE cleantech players!


"Chevron's pioneering of what I've begun calling, 'Cleantech washing' -- pretending to promote clean energy while actually undercutting it."

I detest greenwashing as much as the next person. But the only evidence Casey provides is a website proclaiming Chevron's newfound affection for green, nothing on how Chevron is undercutting cleantech. Perhaps they are, but Casey's claim would be much stronger if he provided some concrete evidence supporting that part of his assertion.


And then, as previous mentioned, Casey makes highly innacurate and distorting comments about $550 billion a year worth of subsidies to help make ExxonMobile's fuel "inexpensive". (Why does he put "inexpensive" in quotes? Does he have a different meaning of inexpensive in mind than the dictionary definition?)

Such disregard for accuracy and evidence undermines the Cleantech cause for what I hope are obvious reasons.
Ronald STEENBLIK
Ronald STEENBLIK
December 11, 2010
What I find interesting about the defense of what I regard as a pretty poor op-ed piece is that the views here seem to be "The ends justifies the means." If somebody's core message is "We need clean tech!" then no matter what else they say is irrelevant and calling them out on sloppiness it is at best "confusing the message" and at worst supporting dirty energy.

But who is the one sowing confusion? Consider some of evidence Mike Casey provides to back up his assertion that "Fossil energy is engaged in a full-contact game".


"ExxonMobil's NYT front page ad falsely equating fossil fuel subsidies with those of wind and solar."

Come again? I look at that ad and I see the following question: "Which of these energy sources receives the highest federal government subsidy?" Then it gives a choice of four answers: (a) oil; (b) corn ethanol; (c) solar; and (d) wind. And then they place a check against "(b) corn ethanol!"! Now, there are raging debates over whether oil or ethanol are receiving the largest subsidies, but how is the ad "falsely equating fossil fuel subsidies with those of wind and solar"?


"This ad was followed with a laughable blog post from Vice President Ken Cohen."

So, what's the big problem here? It's that ExxonMobile can point to official documents from the U.S. Energy Information Administration which provide the data that they then quote. These data have been criticized in detail by respected energy analyst Doug Koplow, who argues that they leave out a lot of subsidies for oil and gas that should be counted. Does Casey call for correcting these problems? No, instead he draws on data produced by the IEA and tries to pass them off as relevant to the United States.

(Continued below)
KC Donovan
KC Donovan
December 10, 2010
Its hard to comment on Mike's article when a few of you go off on who said what to whom and other anonymously made points...

Wouldn't hurt to stick to the point of the article - RE needs a cohesive message to frame the energy debate - as opposed to letting Big Energy have their say - and with $20B a quarter in profits for many of the larger ones (3 of the top 5 largest companies on the planet are oil companies)- they certainly have the muscle to cast the debate anyway they want...

Check out a blog recently posted "Uber Green Economy..." for at least one possible solution...
Ronald STEENBLIK
Ronald STEENBLIK
December 8, 2010
Fred. Yes, I see now that by clicking on your name is Tor Valenza. My apologies.

Yo write, "Thanks for being open and contributing your policy views. I don't agree with them, but I at least respect that your willingness to openly stand by them." What policy views? In any of the above comments on this string do I express policy views? If so, with what do you not agree?

Frankly, I am a bit surprised to see that both you and Mike are in the business of "communications". To me, that word is always, or should always, be yoked to "of correct information". But perhaps I am naiive.

And, by the way, I have discussed issues with countless anonymous posters on blogs. It does not bother me if they choose to remain anonymous as long as they are polite and do not abuse their anonymity to attack me personally for what they believe to be my motives (but invariably get wrong). By the normal standards of REW, Steven has been doing the right thing here and focusing on the issues.


@Steven,

Note in the above I did not say that the costs of maintaining the Strategic Oil Reserve necessarily benefit producers. (It probably does to the extent that any price-stabilizing benefit it has makes their consumers less wary of continuing to depend on oil as a fuel.) What I wrote is that many are of the view that its costs should be born ultimately by consumers. Other IEA countries do that, through hypothecated levies on fuel.

It is an interesting point that "We don't require any other industry to bear the costs of stockpiling sufficient reserve to prevent supply disruptions". I would need to double-check that. But, in any case, clearly the government decided long ago that the risk to the economy (and military readiness) was great enough to warrant the creation of the SPR. But, at the margin, who is creating the insecurity externality? Taxpayers, through their general economic activities? Or consumers of petroleum products? They are not, or at least no longer are, one and the same.
ANONYMOUS
December 8, 2010
Ron:
You remarked that you disagreed with me about the SPR. How would you quantify the value of such a reserve to the Petroleum industry? The ELI study put the value at $6.2 Billion for a 5 year period and that seem high to me. Any opinion on this estimate?

I'd argue that having a reserve of transportation fuels is in the national interest because it guards against a major disturbance in energy supplies. The SPR only stockpiles petroleum so perhaps there is some slight advantage from this fact for the fossil fuel industry compared to the biofuels sector, but I don't think that as nearly as valuable as say $1.2 Billion per year in tax breaks or cash payments.

ELI's report says "ELI calculates the cost to government of the SPR as the lifetime costs of financing for SPR facilities, maintenance, and operation since 1976 that are attributable to the study period"

If there was no SPR and a major supply disruption occurred, fuel prices would spike and the transportation fuel vendors (fossil and biofuels) would likely not suffer a major loss in profits. We don't require any other industry to bear the costs of stockpiling sufficient reserve to prevent supply disruptions so I don't see how we could consider 100% of the cost of the SPR as an industry subsidy.
Steven
ANONYMOUS
December 8, 2010
Solarfred writes: "As usual, Steven is green-washing the fossil fuel industry."

This is a serious distortion. The term "green-washing" is commonly used when a fossil fuel company, by means of token investments or PR, attempts to leave an impression that they are contributing to renewable energy growth or other environmental initiatives. Fred will be hard pressed to find ANY statement I have ever made which would constitute such a claim! In fact, I decry that type of mendacity every bit as much as I decry the use of phony statistics for any other purpose. (As an aside, I would point out that it isn't very reasonable to expect fossil fuel companies to transition into the renewables business--their expertise is in other areas. New technologies are almost always pioneered by new businesses. )

I wonder why solarfred feels that making biased and deceptive statements not supported by the actual data would be beneficial to the position he supports. Every time I catch someone making an error or an inflated claim I become wary that their other statements may be similarly inaccurate.

The tendency to bandy about hyperbolic claims that "fossil fuels receive X times as much as renewables" when the fine print on the actual data tells a very different story doesn't do much for the renewable industry's credibility. Why would anyone think it is reasonable to try to conflate consumption subsides that exist in the developing world with the corporate subsidies in the developed world? And why would anyone feel it is appropriate to disparage someone who pointed out that there is a significant distinction between these two things? Does solarfred even read any of these reports? Perhaps he finds prevarication easier if he knows as little truth as possible....
Steven
Tor 'Solar Fred' Valenza
Tor 'Solar Fred' Valenza
December 8, 2010
Ron, Google "Solar Fred." Hardly anonymous. It's part of my brand, not my name. Even easier, you could also just click my name above and find all you need to know. Can't do the same with Steven. Can with you, and that's great. Senior Trade Policy Analyst and your past comments gives me some perspective of where you're coming from. Thanks for being open and contributing your policy views. I don't agree with them, but I at least respect that your willingness to openly stand by them.
Ronald STEENBLIK
Ronald STEENBLIK
December 8, 2010
"Especially because he's anonymous, nothing Steven says here anymore is credible or convincing. Responding to him any more is a waste of time and energy."

I don't know Steven from a hole in the head, but who's calling the kettle black? What kind of name is "SolarFred"? Is "Solar" really your given name, and is "Fred" really your family name?


"As usual, Steven is green-washing the fossil fuel industry."

How so? All he is doing is pointing to the fact that the IEA data do not support the conclusions that Mike Casey drew from them. And for that you are accusing him for being a shill for the fossil-fuels industry?

From where do you think reliable, comparable data on subsidies come from? I'll tell, you: generally, from dedicated people working in inter-governmental organizations or think tanks. As professional "subsidy accountants" (for lack of a better term), it upsets us to see the data being misused and misinterpreted -- twisted, as it were.

The important point about the IEA data you seem to be missing, Mike and Fred, is that it only measures subsidies on the consumption side, and then only those revealed by price gaps -- price gaps which one finds mainly in developing and emerging countries. It does not pick up, for example, subsidies such as those provided through direct payments to final consumers (e.g., LIHEAP). Nor does it quantify tax exemptions for particular end users (farmers, fishermen, taxi drivers, operators of public-transit systems, etc.), nor the cost of tax breaks that favor providing employees with company cars and fuel credit cards in lieu of higher salaries (at a cost in lost taxes of € 54 billion a year in the EU). And, most importantly, it does not measure subsidies on the production side.

In short, those data have not (yet) been compiled in a systematic, internationally comparable way. Doing so is not easy, I might add, because of the difficulty of establishing common benchmarks.

For what it is worth, that is what I am working on.
Tor 'Solar Fred' Valenza
Tor 'Solar Fred' Valenza
December 8, 2010
As usual, Steven is green-washing the fossil fuel industry. And this isn't the first time:

http://www.renewableenergyworld.com/rea/blog/post/2010/11/more-than-5-fossil-fuel-subsidies-for-every-1-of-support-for-renewables

If Steven doesn't represent PR for the fossil fuel industry, he should. He spouts the same, "yes, there's a problem, but let's not be too hasty! And let me characterize anyone who disagrees with me as negative x or being negative y" instead of answering the parts he can't answer. Or then points fingers, what about them? What about that?" Cast doubt, redirect, delay, and minimize.

Especially because he's anonymous, nothing Steven says here anymore is credible or convincing. Responding to him any more is a waste of time and energy.
ANONYMOUS
December 8, 2010
dlwilsondotcom writes in comment #19:
"I'm with Fred on this one, Steven. If you can't say who you are, then you must be treated as a troll, whatever your position. It seems to me that the whole point of this article is that advocates of R.E. have to stand up and be counted, because the fossil fuels types are counting on spreading their intimidation, lies and distortions to the point that most people believe them."

Two responses come to mind:

1) Do you really think the proper response to "lies and distortions" is countervailing lies and distortions? I think the truth would be a better response....

2) In my profession (science) anonymous commentary is used all the time in the peer review process and it generally works well. Well-reasoned arguments and supporting data can be evaluated on their own terms and you don't need to know who authored them in order to do so.
Steven
ANONYMOUS
December 8, 2010
SolarFred writes:
"What set me off on this debate with Steven was his use of the word "mendacious." It means lying..."

I'd say mendacity means "untruthfulness" which is perhaps a shade politer than "lying" and a shade less polite that "prevarication" or "obfuscation". Hopefully it was clear that the word was used in reaction to Casey's blog post and his fast and loose use of statistics (Mark Twain would probably say that my word choice was several notches too polite for this misuse of data). The IEA generally produces excellent data, the meaning of which is carefully delineated in its many detailed documents--I have no quibbles with them!

I think Casey KNOWS that half a Trillion dollars a year in subsidies ISN'T flowing into the pockets of fossil fuel companies, but wanted to leave that impression with readers even though the true figures are at least an order of magnitude lower (on a worldwide basis). In another place in his post he writes "and the coal and oil industries bought themselves a new Congress last month" so Mike is no stranger to a rough and tumble style of writing.

I point out that if you want to insult a majority of the US congress as intensely corrupt you should expect that they might view some of your goals with suspicion. If you go on to make wildly distorted claims about government subsidy policies, your credibility is going to be seriously damaged. Renewable energy would be better off with no "PR" than that type of message.
Steven
Ronald STEENBLIK
Ronald STEENBLIK
December 8, 2010
"What set me off on this debate with Steven was his use of the word "mendacious." It means lying, and I think that characterizes word characterizes the IEA researchers and their research as lies and liars."

Huh? What I read from Steven's comments was that he was criticizing the interpretation that Mike Casey gave to the IEA's numbers. Maybe Mike was not setting out to deceive, but if not then he should have looked more closely at the underlying data. I see nothing in Steven's comments suggesting criticism of the IEA's numbers. Au contraire!

So, maybe you guys should start over again, because much of what you are saying is premised on an assumption that Steve was being critical of the IEA numbers, rather than critical of Mike's spin of them.

Regarding externalities, stress them by all means. But please keep them separate from the subsidy numbers. The accounting is very different, and involves different people. While I can vouch (or not) subsidy numbers, I am not an expert on how the externality costs are estimated (which is a science in itself, and much more akin to sophisticated statistical analysis than to accounting).

"The Bush II administration was notorious for editing science for the sake of fossil fuel politics." Maybe so. But we are in a new Administration -- have been for almost two years the last time I looked at the calendar.

"Regardless, it doesn't change the point that fossil fuel companies generate record profits and still reap huge tax breaks from Americans." Well, where was the renewables industry last June, when the Senate voted 2-1 against the elimination of tax breaks for the oil and gas industry?
Tor 'Solar Fred' Valenza
Tor 'Solar Fred' Valenza
December 8, 2010
Ron,

What set me off on this debate with Steven was his use of the word "mendacious." It means lying, and I think that characterizes word characterizes the IEA researchers and their research as lies and liars. This is very typical of those opposed to climate change or RE policies. Cast doubt and question the numbers.

So, by calling those numbers lies, it provides a green washing "oh, it's not so bad" frame of the subsidy issue. It is that bad. Our energy policies are supporting an expensive and unhealthy future, and we need to change them now. I also believe that we should stand behind our words in an open debate.

I should also be clear that I WANT the numbers to be open and factual, though one must judge the source objectivity. As you can see above, I conceded to the subsidies taking into account the programs. Fossil fuel companies have cooked safety and air quality numbers. The Bush II administration was notorious for editing science for the sake of fossil fuel politics. Solar shouldn't do the same, I agree.

Regardless, it doesn't change the point that fossil fuel companies generate record profits and still reap huge tax breaks from Americans. This is a 19th century mentality. We're now in the 21st century and anyone who cares about national security and, you know...breathing clean air and drinking clean water should support SEIA's efforts, vote solar's efforts and anyone's efforts to seriously and constructively change our energy policy towards renewable sources. (Notice I didn't say "radically" change.)
Ronald STEENBLIK
Ronald STEENBLIK
December 8, 2010
It really saddens me that so many here (apart from Steven) have taken Steven's attempts to explain the use and misuse of the various estimates of fossil-fuel subsidies as a defense of those subsidies.

I agree, Dave, "Let's have this debate in the open, and base it on facts that we can agree on." But how are we going to do that when so many want to shoot the messengers?
Dave Wilson
Dave Wilson
December 8, 2010
I'm with Fred on this one, Steven. If you can't say who you are, then you must be treated as a troll, whatever your position. It seems to me that the whole point of this article is that advocates of R.E. have to stand up and be counted, because the fossil fuels types are counting on spreading their intimidation, lies and distortions to the point that most people believe them. This is neither news, nor surprising, as it has been business as usual for over a century.

What's different now is that the Internet has given a forum to those who would claim that the emperor has no clothes, and so the arguments can be made in the sunshine. (Yet another reason for the fossil fuel folks to dislike Solar Energy!)

In any case, we need as a civilization to learn to frame this debate in scientific and economic terms that are real and measurable. What are the real ROIs? What is the net social cost of different policy choices? Unfortunately, between the starry eyed environmentalists and the fossil fuelies with their own agendas, there are not many advocates for reasoned debate.

Are we better off tomorrow without using fossil fuels? Only an insane person would say that, just as I think that no serious person can say that we should not be trying to explore the maximum utility of Renewable Energy, in the broadest economic framework.

Let's have this debate in the open, and base it on facts that we can agree on. There are far too many trolls on this site, just as there are many hopeful Renewable Energy enthusiasts who sometimes let their emotions get in the way of reality.

Dave
Ronald STEENBLIK
Ronald STEENBLIK
December 8, 2010
OK, I'll use my own name (though I understand why Steven doesn't), and say that I can confirm everything that Steven has said here, though I disagree about the SPR (see below).

On what basis do I say that? Because I have been heavily involved with the G-20 effort to "to rationalize and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption", and have worked closely with the analysts at the IEA who produced the $550 billion (actually, $558 billion, if we are talking here about 2008; the figure for 2009 is $312 billion) estimate of subsidies to fossil fuels cited in the article.

It serves no purpose to make false claims about those estimates, which refer to subsidies to consumers of ALL fossil fuels (not just oil and gas). As Steven points out, very little of those subsidies flow to Western oil majors. In many cases they are simply the opportunity cost to an economy of selling domestically produced fuel to domestic consumers at cost rather than the world market price.

Do they nonethless harm the prospects for alternative energy in those countries? Of course they do, by making coal, natural gas and petroleum that much cheaper.

Are oil companies in the developed world subsidized? No doubt to some extent. The Obama Administration has been trying to get some of those subsidies (about $3.4 billion per year's worth), mainly in the form of tax breaks, eliminated.

But to castigate the analysts who are to trying to produce comparable numbers for energy subsidies, and cast it as an us-vs-them "fight" is just ignorant.

Regarding the SPR, other member countries of the International Energy Agency also keep public stockpiles of oil. But some finance those petroleum reserves with a fee on sales of petroleum products, or through other means. Accordingly, many analysts (e.g., Doug Koplow, at earthtrack.net) have concluded that there is a public cost of maintaining the SPR that, they argue, should be born ultimately by consumers.
Robert Fiske
Robert Fiske
December 8, 2010
Good Points, Fred;
At least it seems clear that this article and your comments have inspired just the kind of pushback Mike Casey has indicated.

Anonymous put in a good bit of time responding, if this is merely 'minor banter' for him. But focusing on his (her?) identity was an opening for more distraction-arguments in response.

One of the biggest subsidies that Oil and Coal get are the essentially free pass on polluting our air. We will get the bill for that, or our kids will. If Anonymous is actually a scientist and is actually interested in a forward-moving energy policy for the world, then that will take on more importance than hiding behind the SPR and Heating Assistance.

Those are 'aww-shucks!' distraction arguments that are meant to paint opponents as 'Wanting America Unsafe', or 'Wanting Grampa to Freeze', and yet they are actually short-term stopgaps, while a Super-Insulation and Solar Heater program would keep our people warmer and safer in the long-term, and simply preclude the NEED to get that heat from Burnt Fuels.

Keep up the good fight!

Bob

'Your House is Cold. The Sun is Hot.'
ANONYMOUS
December 8, 2010
Fred writes: "Knowing your name and occupation would perhaps help to give some perspective to your love affair with dirty energy..."

I am not a fan of "dirty energy" but neither am I a fan of credibility damaging mendacity or short sighted plans. Subsidy envy is a dangerous distraction from rational plans that might lead to meaningful changes in our energy infrastructure.
Steven
Tor 'Solar Fred' Valenza
Tor 'Solar Fred' Valenza
December 8, 2010
Steven, let's be clear here who's being paranoid. You're the one who's anonymous and imagining me hunting you down, apparently. I actually have a life. Knowing your name and occupation would perhaps help to give some perspective to your love affair with dirty energy. But forget that. You're not tied to the fossil fuel industry, even indirectly. My paranoia is now cured. Yours remains.

As to subsidies for the poor, of course I'm not for abolishing those and I acknowledge that they're part of the numbers. (What's also not part of those numbers are all of the hidden subsidies of fossil fuels like health care costs, asthma, cancer, industry deaths and, you know, wars to protect our interests. And how much are the lives of those West Va 29 coal miner worth to their wives and kids? Doubt we'll ever see day when solar causes the deaths of 29 workers in one incident. But let's just keep this conversation to direct subsidy costs.)

What I'm talking about are the direct tax breaks that you have addressed as "chump change." I want THOSE eliminated, especially that 10 billion in fossil chump change. I'll take my share of that chump change, thanks so much. Or if I can't get my share back, I'd like to ask Congress to transfer it to solar technology instead and battery technology.

This has been nice, Steven, but I'm going to now drop out of this anonymous dialog. Thanks for contributing your perspective. Ain't mine, obviously, but that's America, and that's the type of open forum we have here on RenewableEnergyWorld.com.
ANONYMOUS
December 7, 2010
Comment
14 of 14
Anonymous
December 7, 2010
Fred in #13 writes: ""Not directly involved in energy industry." Hmm... Sounds like you "not directly" receive income from the energy industry, Steven. Don't be modest. You're part of their solution, and that's okay, but be clear so we don't have to guess. Not being anonymous would take care of our wild imaginations, wouldn't it?"

Clearly Fred's paranoia knows no bounds. Perhaps he thinks agents of the fossil fuel cartels are hiding under his bed at night, following him around by day, and monitoring his every online activity. If so, that is yet another reason why I don't want him to know my identity! Fred will never believe me but I don't work in or for the energy industry. If I was as paranoid as he is I'd suggest that a solar industry insider such as he is or a PR agent such as the author of this blog post aren't exactly in a good position to claim to be without bias, but I like to focus on facts.

As for the web pages I quoted having some sinister hidden agenda, I rather doubt it because I got the links directly from the IEA web site.

Fred:
You write: "I'll look into it, but I urge you to consider whether you want your children (or any child) living in a world that is only going to be further polluted by coddling fossil fuel companies today with ANY subsidies. " The ELI considers funds to allow poor old people to heat this homes a subsidy to the fossil fuel industry. You say you oppose all subsides, so do you want to have old people freezing in their homes?

The strategic petroleum reserve is considered a subsidy by the ELI and you oppose all subsidies. Do you want to close it down?

It is easy to whine about subsidies in the abstract, but how about these specific examples?
Steven
Tor 'Solar Fred' Valenza
Tor 'Solar Fred' Valenza
December 7, 2010
"Not directly involved in energy industry." Hmm... Sounds like you "not directly" receive income from the energy industry, Steven. Don't be modest. You're part of their solution, and that's okay, but be clear so we don't have to guess. Not being anonymous would take care of our wild imaginations, wouldn't it?

And that website, I wonder how objective it is with its About Us page pushing "free markets." That's fossil fuel code for "Don't regulate us or do anything to stop our business, even at the expense of the air we all breath and clean water and oceans. And 'free market' except for our industry subsidies, of course." Reminds me of the tobacco institutes that conducted all of that great objective research MINIMIZING the health effects of smoking. Same here with this site. Think this study is also minimizing the IEA report too? Hmmm..

In any case, thanks for the explanation. I'll look into it, but I urge you to consider whether you want your children (or any child) living in a world that is only going to be further polluted by coddling fossil fuel companies today with ANY subsidies.

The point here is that enough is enough. Stop kicking the fossil can down the road. Stop the subsidies.

In fact, just started a new facebook page. Please support it. Even you, Anonymous Steven.

http://www.facebook.com/pages/A-Million-Registered-Voters-for-the-Repeal-of-Dirty-Oil-and-Coal-Subsidies/159554560744541
ANONYMOUS
December 7, 2010
Fred also writes in comment #6: "There is no reason to subsidize their Cayman Island tax dodging to spend 300 million dollars lobbying Congress to keep their subsidies. (Read that NY Times link above again.)

Honestly, Steven, the point is that no matter what figure is being thrown at fossil fuel subsidies, it's a waste our money."

Well, there is some money wasted in the subsidy business, both for fossil fuel companies and for renewable companies--neither portion of the industry is run entirely by saintly altruists. However, most subsidies are actually things that enjoy strong support. These include credits for exploration of alternative fuels, funds to allow poor people to heat their homes, the strategic petroleum reserve, etc. Often tax laws that ANY company can employ (e.g., the foreign tax credit) are counted as subsidies for the fossil fuel industry, which is a rather slanted view of the matter. For example, GE--a major wind turbine maker--uses the foreign tax credit to greatly reduce its taxes as well, but no one counts this as a subsidy for the renewables sector....

The bottom line though is that ~$10 Billion/year is chump change for an industry the size of the energy industry. The renewables sector receives much more than that already if one assigns a fair market value to RPS requirements and the industry should be angling for much more. Do you really think it is in the renewable sector's best interests to be seen as petty and/or deceptive? or to be wasting effort on trivial matters when it should have its eyes or larger goals? I don't....
Steven
ANONYMOUS
December 7, 2010
Solar Fred asks in comment $8:
"And please explain how "none of this $550 Billion dollar figure ends up in the pockets of private companies is the industrialized world."

OK, take the world leader in consumption subsides for 2009 (Iran at ~$100 Billion) as an example. The oil industry in Iran is a state run enterprise and they sell oil within their own borders at below market rates. Iran's citizens get gasoline, etc. at below market rates and the government gets less revenue than if they sold their product on the world market (but the government benefits by reducing social unrest). No western companies are involved in these transactions so these subsidies don't have a strong impact on markets in industrialized nations where renewables and fossil fuels compete head to head.
Steven
ANONYMOUS
December 7, 2010
Fred writes in comment #6:
"You seem wonderfully informed about fossil fuel subsidies. Perhaps you are also biased being part of that industry, as well? "

and

Michael writes in comment #8:
"Hey, Anonymous, do me a favor. If you're going to make a case that ExxonMobil and Peabody Energy need to be on welfare after what, 150 years (?), then have the courage to pure your name on it."

Well, I don't care to use my full name for minor blog posts. I like it when the first 20 google hits for my name refer to my professional publications rather than banter of minor consequence on blog posts. I will state that I am merely a scientist who is not directly involved in the energy industry or funded by any of the players in that industry. You guys really should be more concerned with ideas and data than motivations anyway; and frankly the idea that agents of the fossil fuel cartels are responsible for large numbers of blog posts on renewable energy sites strikes me as just a bit paranoid--surely those guys have better things to do with their time. I point out that if I google "michael casey" I can't figure out anything more about you than you can figure out about me by googling "Steven" so we are on an equal footing anyway.
Steven
Steven
ANONYMOUS
December 7, 2010
Fred,
Here is a chart of consumption subsidies for 2009 broken down by country:
http://www.instituteforenergyresearch.org/2010/11/23/global-fossil-fuel-and-renewable-subsidies/

Note that you won't find the US or any EU nations on the list.

You can find some additional information on the definition of consumption subsidies in : http://www.worldenergyoutlook.org/docs/second_joint_report.pdf
and in any number of other IEA documents. To get a complete picture of the subsidy landscape you have to wade through a bit of data in several different reports and papers, but you should pretty easily confirm that the $550 Billion figure is only for consumption and the much smaller type of subsidies that go to energy producers are tabulated separately.
Steven
Michael Casey
Michael Casey
December 7, 2010
Hey, Anonymous, do me a favor. If you're going to make a case that ExxonMobil and Peabody Energy need to be on welfare after what, 150 years (?), then have the courage to pure your name on it.

The fact is that highly profitable dirty energy companies are on the dole, with tax breaks, subsidies, pollution forgiveness, rock-bottom access to public resources, and whole government bureaucracies devoted to making their lives easier. People are fed up with paying for it. If you want to be the sucker who keeps cutting them checks, go for it. The other 70+% of the rest of us are tired of these guys being welfare bums.
Tor 'Solar Fred' Valenza
Tor 'Solar Fred' Valenza
December 7, 2010
Steven, I wrote the above while you were posting yours, but I understand your point, but I don't see any specific links to back it up that anything is not an honest comparison.

Beyond that, most of my above comments still apply.
Tor 'Solar Fred' Valenza
Tor 'Solar Fred' Valenza
December 7, 2010
Anonymous #3 (Steven again, per chance?). Thanks for the correction, which is even more appalling.

You seem wonderfully informed about fossil fuel subsidies. Perhaps you are also biased being part of that industry, as well?

And please explain how "none of this $550 Billion dollar figure ends up in the pockets of private companies is the industrialized world." To bastardize Shakespeare: A tax break or a reduced tax basis or a sweetheart deal on mineral/oil rights, etc by any other name means $$ in the bank accounts of oil and coal companies with record profits.

There is no reason to subsidize their Cayman Island tax dodging to spend 300 million dollars lobbying Congress to keep their subsidies. (Read that NY Times link above again.)

Honestly, Steven, the point is that no matter what figure is being thrown at fossil fuel subsidies, it's a waste our money. Let fossil fuel costs be real and rise accordingly. And yes, let's ding them for pollution (and tax evasion) so that they're encouraged to pollute our air and water less and pay equal corporate tax rates as any business. Then we'll see how expensive clean, sun and wind energy compares.
ANONYMOUS
December 7, 2010
continuation of #4:

I point out that whining that somebody else got something you don't think they deserved is a pretty poor way of justifying the large expenditures that are needed to support the renewables industry. In particular, lots of the things that the ELI claims are "subsidies" are quite popular. You will find it hard to convince the nation we should close down the strategic petroleum reserve, for instance, or to cut funding of home heating costs to the poor (which isn't a consumption subsidy because it does not lower the cost of one form of energy compared to another--it merely allows the poor to purchase whatever form of energy they choose).

The renewable industry already gets very considerable subsidies from the government. Many of these subsidies are in the form of legislatively mandated bills to ratepayers, which is something that the ELI does not count in its subsidies totals even though it is clearly a government act to advantage the renewables sector. The market value of RPS programs and other set asides is also not included in standard compilations of renewables subsidies. The renewable energy industry can credibly argue that these expenditures are worthwhile and that more funding is warranted. However, every time you try to argue that you hardly get anything now by cooking the books (so that ratepayer billed funds and RPS quotas, etc., don't "count") it undercuts you credibility.
Steven
ANONYMOUS
December 7, 2010
Fred,
The 550 Billion dollar figure includes ONLY consumption subsidies, because the people who tabulate these data don't consider them comparable to the types of subsidies given to energy corporations in the west. The types of subsides that the ELI attempts to estimate are included in an entirely different category. These types of subsidies DO serve to make fossil fuels more competitive against renewables. ELI claims 72 Billion in 5 years (not 7 as you say) but they also include lots of biases in their study so they overestimate fossil fuel subsidies and underestimate renewable subsidies. Note carefully that consumption subsidies in the US and EU--according the IAEA figures--are essentially zero; none of this $550 Billion dollar figure ends up in the pockets of private companies is the industrialized world.

If you wanted to go around grumbling that the fossil fuel industry gets ~$14 Billion a year more than they "should" you might have a leg to stand on (although the ELI report is biased), but quoting the $550 billion dollar figure without an explanation of what it means in the hopes that readers incorrectly conflate it with the types of subsides that do influence the competition between renewables and fossil fuels is clearly deceptive.

to be continued....
Tor 'Solar Fred' Valenza
Tor 'Solar Fred' Valenza
December 7, 2010
Steven, (#2), say you're right about the 550 billion being for consumption subsidies. In any case, that's total for the entire world, which includes the U.S.

And how much to we, the tax payer, give to oil and coal companies that should stand on their own without our help after 100 years of being in business?

According a Environmental Law Institute study, between 2002 and 2008, the coal and oil companies received $72 billion over the seven-year period, while subsidies for renewable fuels totaled only $29 billion. That's 3.5 times as much.

http://www.elistore.org/reports_detail.asp?ID=11358

Subsidies for solar and RE have increased since then, but subsidies for oil and gas and coal haven't gone down either. And the industry is spending 340 million dollars in lobbying money to fight for their subsidies. See:

http://www.nytimes.com/2010/07/04/business/04bptax.html?_r=1&pagewanted=all

So, where's the mendacity, Steven? There's no lying here and there should be no justification for our tax dollars going to VERY profitable businesses that are and remain profitable for years and years to come.
ANONYMOUS
December 7, 2010
The author writes: "So, he should know that if you're given $550 billion a year to be "inexpensive," you shouldn't run your mouth about the cost of clean energy technologies."

He is presumably aware that this 550 Billion dollar figure is for CONSUMPTION subsidies, which are reduced prices for energy in the developing world (most typically OPEC nations). If Iran wants to fritter away $100 Billion/year so that its own citizens get cheaper energy and thus don't riot against the government, it doesn't put a dime in Exxon Mobile's pocket. There are essentially NO consumption subsidies in the US or the EU, so western companies do not profit from them at all. The types of energy subsides that exist in developed nations are at least an order of magnitude below the consumption subsidies of the developing world (on the order of $10 Billion dollars/year in the US). By artificially inflating demand in the developing world, consumption subsidies INCREASE prices in the developed world--they do NOT make fossil fuels inexpensive in the markets where it is competing with renewables.

Renewable energy has strong arguments in its favor, but nothing will weaken its case more than this type of mendacity.
Steven
Dana Blankenhorn
Dana Blankenhorn
December 7, 2010
I noticed this has also gotten some Google News love and with good reason. I agree with all Mike's points here, and hope he has the clients to help him change the frame.

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Mike Casey

Mike Casey

Mike Casey is the President and founder of Tigercomm, a leading U.S. cleantech PR firm with offices in Arlington, VA and San Francisco, CA. He uses his 28 years of experience in communications to counsel cleantech executives and investors....
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