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To: larry hagedon
Folks, there has been much misinformation published about energy subsidies. In fact gasoline is subsidized at around 3 times the rate of ethanol, but accurate information is hard to find."

Most gasoline subsidies are permanent while ethanol subsidies have to be renewed annually. This is why ethanol subsidies gets all the ink while much larger gasoline subsidies are ignored.

Folks, what we have here is a lesson in how facts are used to tell lies.

Our FreePer, Larry Hagedon, says "In fact gasoline is subsidized at around 3 times the rate of ethanol, but accurate information is hard to find."

Apparently Larry never took a course in basic economics.

What is the real value of a dollar amount that expresses a sum of certain subsidies? Is it simply the sum total of the "subsidy" that something gets? Or does it not include what is the level of production of that something that is subsidized? It does.

By ignoring what we produce, or do not produce, Hagedon simply takes a larger dollar amount and claims it expresses a larger rate of subsidy. It doesn't.

The report itself does not do that, and the report itself provides data that refutes Hagedon's claim.

Table 2.4 in the report reflects global subsidies of about $45 billion for nuclear energy, and also shows a production of about 2,719Twh (terrawatts/hour). That subsidy for that level of production provides a subsidy rate of 1.7 cents per kilowatt-hour.

The same table shows a renewable energy subsidy total (minus hydroelectric power) of about $27 billion, with a production of 534Twh, for a subsidy rate of 5 cents per kilowatt hour. Or, almost three times the rate of subsidies for nuclear power. That's not surprising when it gets nearly half as much in dollars and produces no more than 1/5th as much power.

That table shows biofuels (which includes ethanol) getting about $20 billion in subsidies, with production of 34Mtoe (million tons of oil equivalent). They've translated that to an equivalent for electrical production and show it amounts to 5.1 cents per kilowatt-hour; or slightly more subsidized than renewable electric power.

Then the table shows subsidies for fossil fuels at about $400 billion, with production at about 4,172Mtoe. They've also translated that to its electric production equivalent and show the subsidy rate to be 0.8 cents per kilowatt-hour. That's 1/2 the subsidy rate for nuclear power and more than 500% less than the subsidy rates for renewables and biofuels.

Keep in mind that in the hands of those who write these reports - all so-called subsidies are equal, and in that respect money not confiscated by the government, and left in the private markets - via "tax credits" - has equal weight - as a "subsidy" - with money sucked out of the private markets by government and redirected with direct taxpayer subsidized revenue given over to selected enterprises in the economy. Also keep in mind that most "subsidies" with fossil fuels are of the "tax credit" kind, and generous amounts of the subsidies for other sources of energy are of the redistribution kind.

Actually, in terms of "bang for the buck", "subsidies" for fossil fuels have the lowest rate of energy subsidy.

15 posted on 11/09/2010 5:26:45 PM PST by Wuli
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To: Wuli

For years, many Conservatives have denied that oil has any subsidy at all.

You quibble about the degree of subsidy and that is fine, but I have succeeded in my goal, which is to point out that oil is subsidized. Ethanol is indeed not alone in receiving subsidies.


18 posted on 11/11/2010 9:42:54 AM PST by larry hagedon (born and raised and retired in Iowa.)
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