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Gas Plants Will Get Crushed by Wind, Solar by 2035, Study Says
By 2035, it will be more expensive to run 90% of gas plants being proposed in the U.S. than it will be to build new wind and solar farms equipped with storage systems, according to the report Monday from the Rocky Mountain Institute. It will happen so quickly that gas plants now on the drawing boards will become uneconomical before their owners finish paying for them, the study said.
The authors of the study say they analyzed the costs of construction, fuel and anticipated operations for 68 gigawatts of gas plants proposed across the U.S. They compared those costs to building a combination of solar farms, wind plants and battery systems that, together with conservation efforts, could supply the same amount of electricity and keep the grid stable.
As gas plants lose their edge in power markets, the economics of pipelines will suffer, too, RMI said in a separate study Monday. Even lines now in the planning stages could soon be out of the money, the report found.
Hopefully our electrical distribution grid will still work.
(Score: 2, Interesting) by Anonymous Coward on Wednesday September 11 2019, @11:03AM (3 children)
Oh, yes, the "subsidies."
Oil "subsidies" include things like:
* Depreciation on equipment and oil fields
* Tax deductions for money spent on R&D (which are deductible by every industry)
* Not paying special surcharge taxes that leftists have imagined they should pay
* General tax deductions applicable to all US-based manufacturing companies
* Fuel subsidies paid to farmers, low-income homeowners, the military, etc. which subsidize them, not the oil industry. These are oil subsidies in exactly the way that food stamps are farm subsidies, i.e., not at all.
They do not include:
* Actual subsidies to the oil & gas industry (although individual states might give tax breaks that could be considered subsidies).
Meanwhile, renewable energy subsidies are actual subsidies, money actually paid out to accelerate development. And even comparing the actual subsidies paid for renewable energy to the phony subsidies that people pretend the oil industry gets, renewable energy receives many times more money.
(Score: 2, Informative) by Anonymous Coward on Wednesday September 11 2019, @11:19AM (2 children)
None of what you listed are actually what GP referred to. Get a grip. The subsidies are REAL. Even discounting pollution as "free" and "fuck the poor with black lung, die now" type of subsidy, there is the real depletion bullshit,
https://www.resourcesmag.org/archives/money-for-nothing-the-case-for-eliminating-us-fossil-fuel-subsidies/ [resourcesmag.org]
You take land with oil, you take out oil, you deduct your R&D and everything and then you deduct your depletion. You get money back because you sell oil! Where do I get on that scam?
(Score: 1) by khallow on Wednesday September 11 2019, @12:16PM
They conflate traditional capital investment (which result in hard assets with known value) with non-capital investment. Just because someone drills something doesn't mean capital exists (a hole in the ground need not be an oil-producing hole in the ground). And oil drilling is in line with the regulations on mining and other resource extraction industries. It's not a subsidy, but rather a different way to tax the business due to the vagaries of this sort of industry.
Further, much of the items listed are deducted from taxes of traditional businesses as well, such as wages, fuel, repairs, and supplies associated with the business's activities. Well, that was the entire list except for geological surveying.
Eyeballing the list of alleged subsidies, I count at least half due to this sort of depreciation. Not feeling the concern here, but sure, let's get rid of these subsidies that remain. But keep in mind, I'm also in favor of eliminating the renewable subsidies as well.
(Score: 0, Redundant) by Anonymous Coward on Wednesday September 11 2019, @12:47PM
You can say REAL in all caps, that doesn't make it real.
I like how everything listed in your article are exactly items from my list even though you're yelling about how real those subsidies are even though they are obviously not real at all.
"Intangible drilling costs" are R&D, wages, and professional/general business expenses. From your article:
In other words, exactly the same stuff that every other company gets to deduct. When Microsoft designs software, they get to deduct their programmer salaries and office supplies. When Honda designs an engine, they get to deduct the salaries of the engineers that designed it, and the legal expenses of the lawyers that vetted it, and the airfare and hotels for the trips to the trade shows where they showed it off. This is how every single business works. That is NOT A SUBSIDY. (Since we're using all caps, I'm going to use them on things that are actually true, instead of on liberal propaganda). Ordinary expenses do not suddenly become capital just because oil is involved.
"Domestic manufacturing tax deduction" is a tax break, and some people like to call any kind of tax break a "subsidy" even if it affects the entire economy, but it is certainly not an oil subsidy. It is just a general business tax break, as you can easily tell from the name. Yes, oil companies (and many thousands of other companies) receive a benefit from it; calling it an "oil subsidy" is extremely dishonest because that implies that it is there to help or especially benefits the oil industry, which it isn't and doesn't. It is there to help domestic industrial production in general. You could as well call it a "furniture subsidy" or a "light bulb subsidy" or a "wind turbine subsidy" or any other thing you can imagine subsidy, so long as it's made in the United States. Your article says oil companies shouldn't get the tax break because the US didn't export much oil 20 years ago. mmmkay.
"Percentage depletion" is ordinary asset depreciation. You have an asset, over time it depreciates, you deduct the depreciation. It doesn't matter if that asset is a building or a computer or a bulldozer or an oil field. Yes, you get to deduct the depreciation even though you used it to make money in the meantime. Microsoft buys a computer, then they use the computer to make software, and they get to sell the software AND deduct the depreciation on the computer! What a scam! Subsidy racket! Oh wait! That's how business works for everyone! NOT A SUBSIDY.
Yes. Businesses that produce things then go on to sell those things, which they then make money from. That's how business works.
Oil and gas fields are hiring all over the country. Some hard work might do you good.
There's some other phony baloney in that article you linked, too. How about this:
Well, not really. Exxon-Mobil paid an effective 21% [marketwatch.com] tax rate in 2016. That's the same as Coca-Cola and Intel, and more than Nike or IBM.
Compared to the overall economy [nyu.edu], oil & gas (counting integrated and production, the vast majority of oil companies) paid an average tax rate of 14.4%, compared to the overall economy (excluding financial companies) of 13.7%. So... yeah. They pay slightly more tax than average. And no, that's not a biased source. A biased source looks like this [exxonmobil.com].