Oregon is on the Wrong Course
The promise of achieving economic
recovery by creating green jobs sounds too good to be true.
Unfortunately, it is too good to be true. No currently
promoted renewable energy source can produce reliable, useful
energy at competitive prices except for hydropower.
Hydropower now produces sixteen times
as much renewable energy as wind and solar power combined in
the United States. Moreover, hydropower is reliable,
consistent, and is produced at a small fraction of the cost of
wind and solar generation. In fact, unregulated hydropower is
far and away the least expensive source of electricity.
Unfortunately, our state and regional policies are focused
upon increasing the costs of hydropower regulatory, fish
passage, and water quality standards with the purpose of
destroying the economic viability of that resource. More
hydropower dams are being dismantled than built.
The total cost of United States energy
increased 80 percent during the past decade at the same time
that United States energy consumption only increased 5
percent. That 80 percent increase in energy cost has allowed
rapidly developing technologies for geothermal and biomass
energy production to approach competitiveness. In fact, both
of these technologies now require subsidies of less than one
dollar per megawatt hour.
Total federal renewable energy
subsidies have increased more than three fold during that ten
year period. The clear evidence shows that subsidizing several
forms of renewable energy production has been a fool’s errand
and a colossal waste of tax revenue. The imprudence of
investing $3 billion in annual federal subsidies for ethanol
production has been widely reported and rightfully lampooned.
Although ethanol is the highest total dollar subsidy, it is
unfortunately not the worst percentage subsidy.
In 2008 more than $1 billion federal
taxpayer dollars were spent on wind and solar power renewable
energy subsidies in the effort to make them competitive with
generation with natural gas, oil, and coal. The unbelievable
amount of those subsidies is underscored by the 2008 report
from the United States Energy Information Administration.
Solar energy receives a federal subsidy of $24.34 per Megawatt
hour. Wind power is subsidized at $23.37 per Megawatt hour.
After more than ten years of subsidized production the
combined wind and solar generation is contributing less than
one percent of United States energy consumption.
In addition, twenty seven states have
passed renewable portfolio standards that mandate from 4 to 25
percent usage of renewable power. Those mandates become
requirements between 2009 and 2025. Most of these states,
including Oregon, have added their own state tax credits and
production income deductions to the already staggering federal
incentives. This current path of handouts and mandates will
inevitably result in even higher energy prices.
Our own state leadership is actively
participating in the development of unaffordable and
unsustainable green energy. For instance, millions of hard
earned Oregon tax dollars have been invested to entice Solar
World to locate in Oregon. The company employs workers at a
median wage of about $3,200 per month to build solar panels.
This creates a monthly payroll of more than $1.1 million.
While that sounds pretty good you need
to hear the rest of the story. We understand that Solar Fun,
located in China, is now producing eight times as many solar
panels of essentially equal quality with a monthly payroll of
$300,000. The Chinese corporation produces eight times as many
solar panels for about one fourth the costs. With that
gigantic competitive disadvantage we wonder how Solar World
can remain economically viable regardless of the amount of
state and federal tax dollars made available to subsidize
their solar panel production. A business model that requires
significant subsidies to produce a product is simply not
Oregon is rushing to subsidize the
production of unaffordable green energy. In the short term,
the construction of renewable energy facilities will create
jobs. Operating and maintaining those renewable energy
facilities will sustain jobs. The renewable portfolio standard
insures that Oregon ratepayers will be forced to pay the
significant increased cost of that renewable energy
production. However, the certain long term outcome of
unaffordable energy prices is the creation of a competitive
disadvantage for Oregon businesses. The combined effects of
the tax credit incentives to build unaffordable renewable
energy production in Oregon, and the Renewable Portfolio
Standard that requires the ratepayers to use the unaffordable
energy, will continue to drive energy prices upward. Expect to
see businesses either close, or migrate out of Oregon at an
increasing rates as energy prices continue to escalate in Ore
gon. High energy prices are job killers. Unfortunately,
ongoing Oregon public policy will insure the unending upward
spiral of energy prices.
Oregonians are paying for these failed
energy policies three times over. First, they pay higher
prices at the electric meter. Then they must pay higher taxes
to compensate for all the tax deductions and credits provided
to produce the unaffordable power. Finally, they pay higher
prices for retail goods and services because those business
providers must pass on their increased costs caused by
unaffordable energy prices.
Moreover, to purposely inflate energy
prices is an environmental injustice targeted at our poor and
disadvantaged citizens. It insures the continued loss of
Oregon jobs and the continued decline of Oregon incomes.
Oregon has consistently been a national leader in
unemployment, poverty and hunger for more than two decades.
The figures released by the Employment Department this week
show most Eastern and Southern Oregon counties experiencing
unemployment ranging from 12.5 to 19.5 percent. When those
bleak figures are adjusted to include those who were self
employed, those who have been out of work for more than a
year, and for those working significantly less hours, those
figures rise to from 20 to 28 percent! Unaffordable energy
prices will continue to be a significant driver of Oregon’s
national leadership in unemployment and poverty until our
public energy polices are changed.
Regrettably, our Governor is continuing
his “full speed ahead” policies to make Oregon the national
leader in unaffordable renewable energy. He continues to
promote ways to subsidize unaffordable wind and solar
technologies while leading the charge to destroy inexpensive
hydropower generation. In fact, he has introduced an entire
portfolio of bills that will enhance the development and
production of unaffordable renewable energy in Oregon. The
most onerous of those bills is
Senate Bill 80, which would impose significant energy
taxes in the form of a carbon cap-and-trade scheme. The
purpose, and the certain outcome, of cap-and-trade are to
increase the cost of fossil fuel energy in order to make
renewable sources more competitive.
The manipulation of energy costs
through public policy simply violates the civil rights of
those who must choose between heating their homes and feeding
their children. Oregon policy makers appear unable or
unwilling to recognize that reality in their continuing zeal
to make Oregon the greenest state on the planet.
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