Energy

UXBRIDGE, Canada, Sep 30 (IPS) – Why do U.S. oil companies — some of the most profitable corporations on the planet — receive 20 to 40 billion dollars a year in subsidies from the U.S. government?

And, in a time of skyrocketing oil prices and profits, why did the George W. Bush administration in 2005 authorise an additional 32.9 billion dollars in new subsidies over a five-year period?

“Those are very good questions,” said Doug Koplow of Earth Track, Inc., an independent energy information research organisation in Boston, Massachusetts.

"Environmental groups Earth Track and Friends of the Earth just put out a study quantifying biofuels subsidies through 2022, as the U.S. plans to massively increase production of biofuels. The upshot? The cost to taxpayers would be about $420 billion over that period, or an average of about $28 billion a year."

"The billions of dollars that go into a nuclear power plant could be spent better in other ways, including making homes more energy-efficient, said Doug Koplow, president of Earth Track Incorporated, a Cambridge, Mass.-based consulting firm."

According to government data commissioned by the GSI, China provided a total of RMB 780 million (US$ 115 million, roughly US$ 0.40 a litre) in biofuel subsidies in 2006. These comprised support for ethanol in the form of direct output-linked subsidies paid to the five licensed producers, as well as tax exemptions and low-interest loans for capital investment. Further support is provided through mandatory consumption of ethanol-blended fuel in ten provinces (a ten per cent blend with gasoline, E10).

This study aims to reduce this complex debate to two simple questions: how much money are Canadian federal and provincial governments spending to support liquid biofuels—fuel-grade ethanol and biodiesel—and does it represent good value-for-money to Canadian taxpayers?

It is one of a series of reports undertaken by the Global Subsidies Initiative (GSI) of the International Institute for Sustainable Development (IISD) examining government support for biofuels in selected countries.

Within the past year, estimates of the cost of nuclear power from a new generation of
reactors have ranged from a low of 8.4 cents per kilowatt hour (kWh) to a high of 30 cents. This
paper tackles the debate over the cost of building new nuclear reactors.

Advocates of nuclear power are promoting a “nuclear renaissance,” based on claims that a new generation of reactors will produce relatively cheap electricity while solving the threat posed by global climate change. As of October 2008, U.S. utilities and power producers had already proposed building about 30 new nuclear reactors. And some analysts have called for building 300 new plants by mid-century.

Government involvement in financing large scale energy projects has a checkered past.  Historical forays into loan guarantees for biofuels and syn-fuels have been expensive failures.  Large hydroelectric dams and federally-owned uranium enrichment facilities were built and operated as government-owned entities, though not without substantial subsidies.   Title XVII of the Energy Policy Act of 2005 initiated a new wave of multi-billion dollar federal loan guarantees to large scale, high risk, privately owned energy infrastructure.