Industry lobbies are powerful beasts, and the sugar industry is a large one. I see they are still getting an extension to their support in this proposal:

The bill also would extend the U.S. sugar-support program, which includes domestic marketing quotas and import restrictions. Critics including the Coalition for Sugar Reform say the measures artificially inflate costs for U.S. consumers and companies that use the sweetener.

Still, it's a start - looks like about a 20-25% cut in subsidies. Not 30% as proposed by others (the House, and the President), but there we go.

Great meeting you face-to-face Monte.

Sugar drives me nuts. Domestic sugar is more expensive, so much of the candy manufacturing business is now in Canada and Mexico, and we import our Life Savers. An incredibly stupid policy that exists only to enrich the few at the expense of the many.

This video brings the whole "alternative energy" debate into sharp focus.

Ultimately, we have nothing better in economic terms than fossil fuel. The choice is to accept that fact, use it while we can, or to fight against it, force the prices up in the hopes of making something else viable. President Obama believes the latter course is viable.

He's willing to damage the economy to save it.

Hmm. A short clip of two opposing opinions, followed by some Fox talking heads is not really 'sharp'. And, unfortunately, it's an argument about a particular policy of government (which surprisingly Krauthammer et al disagree with!) rather than being about the actual economics of energy.

Solar energy met the grid parity in many places in the US and Europe already and is expected to meet retail parity by 2016 or even earlier. Unsubsidised solar competes with fossil fuels in one US state already (Hawaii of course) but the southern mainland states would not be out of reach if the price of photovoltaic continues to fall (it fell by 25 times in between 1990 and 2010 and the trend is not changing). Especially if the price of fossil fuels rise - which is likely regardless of government policy.

Similarly wind power reached grid parity in places a few years ago and reductions in capital costs should see it reach general parity within five years.

in the short term, fossil fuels are cheaper. As a long term policy it seems to me to be a poor choice. Fossil fuels generation does not have much further it can go in terms of efficiency and sources of fuel are finite and becoming more costly to exploit. Nuclear is more stable and can be cheaper but it's not perfect. Solar is great for areas where aircon in used - it tends to match demand slightly ahead of time. Hydro is often overlooked but can be incredibly cheap. It's only a matter of time before these technologies undertake fossil fuels.

That's before you consider externalities like pollution.

So then we come to the other aspect. Should the US be investing publically or privately in new technologies that may not pay off in the next few years, but are expected to in the not so distant future?

danivon wrote:Hmm. A short clip of two opposing opinions, followed by some Fox talking heads is not really 'sharp'. And, unfortunately, it's an argument about a particular policy of government (which surprisingly Krauthammer et al disagree with!) rather than being about the actual economics of energy.

Shockingly, we disagree.

President Obama has slavishly supported "green" energy while his EPA has put the clamps on fossil fuel. If the goal is to set prices soaring so that "green" energy can compete, President Obama is succeeding--and hurting the lower economic strata in the process.

If we aggressively developed our own fossil fuels, we would have cheaper energy.

If we looked at ways to improve the efficiency of the energy grid, that would be worthy. During the Stimulus, for example, it would have been wise to spend money putting electrical lines underground (particularly in the northeast, where ice and wind knock them down with some frequency) and furthering the availability of natural gas (much of New England is still on heating oil). There is a lot we can do.

Pretending that the current "green" energy technology is ready has not worked. Instead, we see subsidized companies going bankrupt, after the President's supporters are insulated from loss at taxpayers' expense (see Solarzyme) or we see insiders' benefit in other ways:

Washington, D.C. — U.S. Representative Mike Kelly (PA-03) participated in today’s House Oversight and Government Reform Committee hearing titled, “The Obama Administration’s Green Energy Gamble: What Have All The Taxpayer Subsidies Achieved?” Witnesses included recipients of the U.S. Department of Energy’s (DOE) Loan Guarantee Program, which provided billions of dollars in federal funds to support alternative energy projects.

Among those testifying was Michael Ahearn, former chief executive officer and current chairman of the board of First Solar, Inc, a solar panel industry leader. Between 2008 and 2012, Mr. Ahearn sold roughly $450 million worth of First Solar stock. Throughout that period, First Solar’s stock lost nearly 95 percent of its value. In early August 2011, just days after First Solar was awarded its first DOE loan totaling nearly $1 billion, Mr. Ahearn sold approximately 700,000 shares of stock at a value of more than $68.5 million.

Despite receiving a total of more than $3 billion in DOE loan guarantees, First Solar has laid off 30 percent of its workforce and has delayed plans to hire hundreds of employees for its yet-to-be completed Mesa, AZ, facility.

There are better sources of energy than oil. However, I'm not certain we've found them yet. To force our economy to adapt to higher energy prices is not the answer.

Sigh...

Seems you completely missed the point of my post, which was not to defend that subsidy, but to point out that alternative energy is likely to pay off faster than you think. Fossil fuels seem to be a short term solution to a long term problem. And the cost will not fall, it's likely to rise. In the meantime, the costs of alternatives is falling.

Of course, I agree that a wise investment would be to improve the efficiency and resilience of your power grid. That would not actually make much difference to the relative costs of different types of fuel or energy but it would help reduce price increases over time and reduce risk.

oh - Obams's EPA? I thought it was Nixon's.

In Mass people are starting to install solar panels for their homes. It is economical because of the 30% federal tax credit as well as some state and local benefits. In total that covers 1/2 the price as I understand it. I do think that solar is advancing rapidly, but how fast I don't know.

Here's another approach. The gentleman running this company is one of the most dynamic thinkers and speakers I've ever heard. He was #2 at SAP while he was in his 30's and on his way to becoming a multi-millionaire when he decided that he wanted to wean the world off of oil for environmental and national reasons (he is Israeli). If anyone can do it, he can.

http://www.foxnews.com/leisure/2012/05/ ... latestnews

Ray Jay wrote:In Mass people are starting to install solar panels for their homes. It is economical because of the 30% federal tax credit as well as some state and local benefits. In total that covers 1/2 the price as I understand it. I do think that solar is advancing rapidly, but how fast I don't know.

Of course, there's always the chance that government will get in the way of progress.

http://old.post-gazette.com/pg/12140/1232851-28.stm

Ray Jay wrote:In Mass people are starting to install solar panels for their homes. It is economical because of the 30% federal tax credit as well as some state and local benefits. In total that covers 1/2 the price as I understand it.

Right away, that shows how it is not "economical." When you have to pay people to do something it's because on its own, it would make no sense.

Here's another approach. The gentleman running this company is one of the most dynamic thinkers and speakers I've ever heard. He was #2 at SAP while he was in his 30's and on his way to becoming a multi-millionaire when he decided that he wanted to wean the world off of oil for environmental and national reasons (he is Israeli). If anyone can do it, he can.

Some time ago, I read a story about Israel experimenting with pressure plates below the road. The plates would transfer that energy (from vehicles driving over them and depressing them) to the grid.

Here's all I know: the current technologies for "green" energy aren't good enough to compete. At the end of the day, something altogether different may arise and be far better.

Will we miss it if we are too heavily invested in failing tech?

Or, is Ricky right--we can't allow the Chinese to take all the losses?

I mock because right now, that's all it is. We don't know that solar panels or gerbil droppings will be "the next big thing." What we do know is that fossil fuel works and could be less expensive than it is.

The ideal energy is clean and free. Yes, I said "free." Want to talk about Utopia? Imagine that energy supply!

In the meantime, liberals will try to shoehorn everyone into what they think is right. It might not be, but that does not even appear on their radar. Suppose current techs will create massive poverty because of their costs, would this dissuade liberals?

Not today.

Could solar, wind, and other "green" energy supplies be the future?

Maybe. But, we don't know that. We don't know if they make any sense as a bridge to whatever is next.

Less government; more market.

Yes, I agree on less government more market. I meant economical for the homeowner who is installing, not for society at large. There are also carbon tax credits for the homeowner, which I forgot to mention. I do think there is some place for public funding of alternative energy because there is the public good involved, both as a matter of national security and the environment. How much and how are important questions. The across the board 30% tax credit may be the right approach. Lending money to Solyndra is not.

When I heard Agassi talk a few years ago about his electric car idea, he mentioned that he approached the PM of Israel on the proposal because of the national significance to the Israelis of weaning off of oil. Apparently the PM told him that it was a great idea and he should find a venture capitalist to fund it (i.e. you won't get money from the country). I believe he has done some of that, although there are probably some public funds in the mix given the Renault connection.

On the folly of state funding of private businesses, here's one that has been in the local press:

http://www.bostonglobe.com/opinion/2012 ... l_BG_Links

I believe that Mass refused to fund Schilling because he is a Republican and campaigned for McCain. RI, who had a Republican governor at the time, picked him up and sunk the taxpayer's money into his venture.

Ray Jay wrote:http://www.foxnews.com/leisure/2012/05/19/electric-car-network-gets-first-test-in-israel/?test=latestnews

Great article, thanks. We're so US focused, these great stories from outside the country can get lost. I recall Tesla floating a similar idea to extend range, but I don't think they were able to get any where with the infrastructure required; this sounds real.

steve

To force our economy to adapt to higher energy prices is not the answer.

Its the free market forcing the economy to adapt. Demand for fossil fuels out stripping supply... ...
What have you got against the free market?

If the question is, why don't we move to coal? Then review the costs of acid rain, and air pollution .. Those externalities prove that "clean coal" (a big lie) isn't an answer.
There will be no one answer. However market forces are changing consumer behaviours and all kinds of attempts are being made at alternative energies and more importantly increasing energy efficiencies. Its probably easier to drive 25% better energy use from a modern city than to create 25% more energy. (Motion detectors for lighting etc.)
Its more likely that high transportation costs will drive some manufacturing back to North America ....
Markets change things. Sometimes, governments can help,.

rickyp wrote:steve

To force our economy to adapt to higher energy prices is not the answer.

Its the free market forcing the economy to adapt. Demand for fossil fuels out stripping supply... ....

at best, a half-truth. But, since you have an IQ, you know that.

What have you got against the free market?

If the question is, why don't we move to coal? Then review the costs of acid rain, and air pollution ..

Really? How about not shutting down coal production and coal plants? How about opening Federal lands with oil on them to development? How about approving the Keystone pipeline? How about stop speculating on the energy market (pure R and D is one thing, but investing in failing/failed companies is another).

Those externalities prove that "clean coal" (a big lie) isn't an answer.

Coal is not perfect, but, given our current technology, it won't blot out the Sun either.

Markets change things. Sometimes, governments can help,

The next thing our current government does to help energy supply will be its first.

Pretty sure I read recently that the shale gas revolution has halved the price of natural gas in the States over the last few years. Gas would seem to be the obvious stopgap solution.

Longer term I don't think you can get away from heavy state involvement in the energy sector. It's absolutely critical to national prosperity, not to mention national security, so you wouldn't want it any other way. The concern I have is that we seem to getting tied into some pretty powerful vested interests. In principle I don';t have a problem with the state offering long-term support to the alternative energy sector in order to kickstart the process. What worries me though is the likelihood that all the technologies we're currently looking into are extremely inefficient and highly unlikely to be the optimal solution for the longer term, but once we're locked into long term subsidy arrangements for these technologies then it's difficult to change.

Sassenach wrote:

In principle I don';t have a problem with the state offering long-term support to the alternative energy sector in order to kickstart the process. What worries me though is the likelihood that all the technologies we're currently looking into are extremely inefficient and highly unlikely to be the optimal solution for the longer term, but once we're locked into long term subsidy arrangements for these technologies then it's difficult to change.

I agree with this last part. Corn ethanol is a very good example of that.

Changing topics, the Dept of Commerce tarrifs on Chinese solar manufacturers is backfiring on us. http://money.cnn.com/2012/05/21/smallbu ... /index.htm

I suspect that there are more high paying jobs in installation of the solar panels than manufacturing them (just thinking about it -- perhaps others have data). Now we are making the panels more expensive, increasing the cost of solar and our subsidies even more (and our need for subsidies) to protect solar manufacturers (who I'm guessing are politically connected) at the expense of the guys and gals who are putting these things up, who are going to spend much more of their energy lobbying Washington as opposed to their operations.