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10 Wasteful and Unnecessary Energy Spending Programs in the Omnibus

Posted By Nicolas Loris On January 15, 2014 @ 9:58 am In Energy | Comments Disabled

omnibus-bill [1]

We’ve written several times that the Omnibus legislation includes Department of Energy spending that needlessly squanders money away on activities [2] that should occur in the private market.

Of the $1.9 billion allocated for Energy Efficiency and Renewable Energy money will be a variety of wasteful projects:

  1. “Technology validation” and “market transformation” of hydrogen and fuel cells technologies. A good idea will be validated by its success in the market place, not by how much money government pours into an idea.
  2. $2 million for the clean burning, biomass cookstove development.  Reducing indoor smoke in developing countries where many families still use cookstoves is a laudable goal but a number of clean cookstove technologies already exist [3].
  3. Offshore wind is one most expensive forms of energy in America [4] but that isn’t stopping DOE from spending money on demonstration projects and technology development. If offshore wind is as promising as proponents say it is, it won’t need help from the taxpayer.
  4. Included in the $17.3 million for conventional hydropower, Congress is allocating $3.6 million for Section 242 of the Energy Policy Act of2005 [5], a production handout for hydro that allows a facility to collect 1.8 cents per kilowatt hour (up to $750,000) for up to 10 ten years.   It’s your wind production tax credit but for hydro.
  5. Money to [2] “research the most promising Class 8 heavy-duty long-haul truck technologies, such as alternative fuel or dual-fuel technologies.”  Here’s an industry that operates on razor thin margins and plans its driving routes down to the tenth of a mile and the government’s going to help them determine which fuel to use?
  6. $27.5 million for Advanced Manufacturing that conducts research to find energy and savings costs for America’s manufacturing, industrial and commercial bases. Manufacturers already know that energy is a significant input cost and will innovate to find ways to lower costs and gain a competitive advantage.
  7. $50 million for the State Energy Program, a competitive grant program [6] for “the adoption of energy efficiency/renewable energy products and technologies.”  Read: more handouts for politically preferred technologies.
  8. Over $100 million for advanced nuclear reactor concepts [2] and light water reactor sustainability that researches how to extend the life of our nation’s current fleet of reactors.   While new nuclear reactor technologies have great potential, commercialization must be shouldered by the private sector.  Further, the private sector has tremendously increased the efficiency of our reactors on their own.  No help from the feds needed.
  9. $392 million for carbon capture and sequestration technology (CCS).  The Environmental Protection Agency’s regulation of greenhouse gas emissions on new and existing power plants is hinging on CCS. Even with taxpayer-funded financial handouts to CCS projects, building them will be prohibitively costly, which is why the EPA’s regulation of greenhouse gas emissions will effectively ban the construction of new coal-fired generating units [7]. Even if CCS were affordable, it does not justify the EPA’s greenhouse gas regulation, since the EPA’s greenhouse gas regulations are intended to address a non-problem. CCS should be built only if companies believe it is in their economic interest to do so—for instance, if profitable opportunities for enhanced oil recovery exist nearby.
  10. $12.6 million for collaborative research on hydraulic fracturing to, in part, improve the economics and recoverability of shale oil and shale gas as well as $10 million for “activities to improve the economic viability, safety, and environmental responsibility of offshore exploration and production in challenging conditions, of exploration and production from unconventional natural gas and other petroleum resources, and of production by small producers.”  President Obama’s line about oil subsidies is that [8] “They’re doing just fine on their own” but he generally misidentifies which provisions are actually oil subsidies [9].  These spending programs are blatant subsidies; there’s no reason taxpayer dollars should be spent trying to improve the economic viability of America’s oil and gas resources; the energy companies will handle that on their own.

Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2014/01/15/10-wasteful-unnecessary-energy-spending-programs-omnibus/

URLs in this post:

[1] Image: http://blog.heritage.org/wp-content/uploads/omnibus-bill.jpg

[2] needlessly squanders money away on activities: http://docs.house.gov/billsthisweek/20140113/113-HR3547-JSOM-D-F.pdf

[3] clean cookstove technologies already exist: http://www.cleancookstoves.org/our-work/the-solutions/cookstove-technology.html

[4] one most expensive forms of energy in America: http://www.eia.gov/forecasts/aeo/electricity_generation.cfm

[5] Section 242 of the Energy Policy Act of2005: http://www.gpo.gov/fdsys/pkg/PLAW-109publ58/html/PLAW-109publ58.htm

[6] competitive grant program: https://www1.eere.energy.gov/wip/sep.html

[7] effectively ban the construction of new coal-fired generating units: http://www.heritage.org/research/reports/2013/12/epa-power-plant-regulations-a-backdoor-energy-tax

[8] subsidies is that: http://www.ontheissues.org/2012/Barack_Obama_Energy_+_Oil.htm

[9] misidentifies which provisions are actually oil subsidies: http://www.heritage.org/research/reports/2011/05/whats-an-oil-subsidy

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