Cavuto's Selective Outrage Over Energy Subsidies

››› ››› MIKE BURNS

On his Fox News show, Neil Cavuto hosted Chris Horner of the Competitive Enterprise Institute to argue against the effectiveness of federal subsidies for the solar industry and claim that there would be no solar industry but for these subsidies. In fact, solar energy receives significantly fewer subsidies than fossil fuels and nuclear energy.

Your World Segment Criticized Solar Energy Subsidies

Horner: Solar Industry "Would Not Exist But For Politicians" And Government Subsidy. From the January 13 edition of Fox News' Your World:

CAVUTO: We keep spending green to go green and look what happens -- solar panel plants are going bust. This factory shutting down in Massachusetts -- forget the sun. After two years, it appears the only thing this plant soaked up is $58 million in tax per cash, and Chris Horner's -- well, he's had enough. He's from the Competitive Enterprise Institute. Yet we still push this technology maybe hoping that someday it'll hit pay dirt, but it has not as yet -- maybe not across the board but clearly in this case. What happened?

HORNER: Well, it's not a new technology. Its first patent for solar power was in 1888. Windmills only became commercialized in '91 -- of course that was 1891. Though they still come to Washington, the state capitals, hat in hand saying they're nascent technologies. Intel's not a nascent technology, and I suggest it's somewhat newer than these folks. So, whenever these people come, they're purely aid-dependent industries. They come to state capitals or Washington and they say, unless I get this wealth transfer from the taxpayer, I will go broke.

The answer is go broke, because implicit in that argument or in that plea, Neil, of course is, even if I get this wealth transfer from the taxpayer, I will go broke. I will go broke in a few more months. We've seen it here. We've seen it on a scale 10 times as large with Solyndra, which started showing signs of rigor mortis in California about the time the check for 580-something million was cashed. These are industries that would not exist but for politicians having decided that these energy sources of the past will be what work in the future despite the engineering and the physics saying otherwise. [Fox News, Your World with Neil Cavuto, 1/13/11]

Solar Energy Receives Significantly Fewer Subsidies Than Fossil Fuels, Nuclear Energy

Energy Information Administration: In 2007, Solar Received Significantly Fewer Subsidies Than Other Energy Industries. According to the federal Energy Information Administration, federal coal subsidies in 2007 totaled $3.234 billion, federal natural gas and oil subsidies totaled $1.829 billion, and federal nuclear subsidies totaled $1.121 billion. In comparison, federal solar subsidies totaled $187 million in 2007, and the total subsidy for all non-fossil and non-nuclear energy was $1.252 billion in that year.

[U.S. Energy Information Administration, accessed 1/13/11]

Nuclear Energy Institute: In 2008, Biggest Beneficiaries Of Federal Energy Subsidies Were Oil And Gas Industry. According to a 2008 Nuclear Energy Institute study titled, Analysis of Federal Expenditures for Energy Development:

Federal tax concessions for oil and gas are the largest of all incentives, amounting to about 80 percent of all tax-related allowances for energy. Regulation of prices on oil for stripper wells or new wells comprises the second largest amount of incentives aimed at a particular energy type.

In the R&D category, nuclear energy received about half of the expenditures since 1950 and coal about a quarter of the total.

Some additional observations on the data:

  • Oil and gas received approximately 60 percent ($436 billion) of federal spending to support energy since 1950. Oil alone received more than three-fourths ($335 billion) of this amount.
  • Coal received approximately 13 percent ($93 billion) of federal spending.
  • Nuclear received approximately 11 percent ($81 billion) of federal spending. Hydro received approximately 11 percent ($81 billion) of federal spending.
  • Wind, solar and geothermal received approximately 7 percent ($50 billion).
  • Nuclear energy was the target of about half ($67 billion) of the government's spending on energy R&D.
  • About $39 billion (almost 60 percent) of the total spent on nuclear energy research since 1950 was spent before 1975 to explore a range of reactor concepts and potential applications for military and civilian uses. [The Nuclear Energy Institute, Analysis of Federal Expenditures for Energy Development, 9/08]

NEI provided the following chart comparing federal expenditures on different energy sources:

[The Nuclear Energy Institute, Analysis of Federal Expenditures for Energy Development, 9/08]

NY Times: "Oil Production Is Among The Most Heavily Subsidized Businesses." From a July 3, 2010, New York Times article:

With federal officials now considering a new tax on petroleum production to pay for the cleanup, the industry is fighting the measure, warning that it will lead to job losses and higher gasoline prices, as well as an increased dependence on foreign oil.

But an examination of the American tax code indicates that oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process.

According to the most recent study by the Congressional Budget Office, released in 2005, capital investments like oil field leases and drilling equipment are taxed at an effective rate of 9 percent, significantly lower than the overall rate of 25 percent for businesses in general and lower than virtually any other industry.

And for many small and midsize oil companies, the tax on capital investments is so low that it is more than eliminated by var-ious credits. These companies' returns on those investments are often higher after taxes than before. [The New York Times, 7/3/10]

Clean Technology Researchers: There "Is No Such Thing As Subsidy-Free Energy, And There Never Has Been In The Modern World." According to the book by Ron Pernick and Clint Wilder, The Clean Tech Revolution: The Next Big Growth and Investment Opportunity, published in 2007:

Skeptics and naysayers have traditionally dismisses clean-energy technologies like solar and wind by arguing that these technologies "can't compete on price without public subsidies." The problem with this argument is that there is no such thing as subsidy-free energy, and there never has been in the modern world. The history of coal, oil, natural gas, large-scale hydroelectric, and especially nuclear power -- a subsidy all-star if there ever was one -- makes it clear that all these industries' growth occurred partly with the direct and indirect financial support of governments that wanted to encourage them. There's nothing inherently wrong with that, but don't ask other energy sources to compete on the same playing field without comparable support. [Page 280, The Clean Tech Revolution: The Next Big Growth and Investment Opportunity, 2007]

Horner's Employer Has Close Ties To Big Oil Companies

CEI Has Received Millions Of Dollars From Exxon Mobil. According to reports compiled by Greenpeace, Exxon Mobil Corp. and its foundation donated more than $2 million to CEI from 1998 through 2005 when it stopped directly providing money to the group. [, accessed 1/13/11]

CEI Has Received More Than $600,000 From Koch Family Foundations, Which Are Closely Tied To Oil Industry. According to data compiled by Media Matters Action Network, from 1986 through 2004, CEI received $666,420 from the Charles G. Koch Charitable Foundation, Claude R. Lambe Charitable Foundation, and David H. Koch Charitable Foundation and Personal Philanthropy. [Media Matters Action Network, accessed 1/13/11]

  • Charles and David Koch reportedly each own 42 percent of Koch Industries. [Forbes, 9/17/08]
  • Koch Industries Subsidiaries have been in the petroleum industry since 1940. [Koch Industries, Inc.'s website, accessed 1/13/11]
  • Claude R. Lambe, Charitable Foundation president, is an executive VP of Koch Industries and member of the Koch Industries board. [Charles G. Koch Charitable Foundation's website, accessed 1/13/11]

Posted In
Environment & Science, Energy
Fox News Channel
Neil Cavuto, Chris Horner
Your World w/ Neil Cavuto
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