The Breakdown

Explaining Southern California's economy

Visual Aid: (Almost) 100 years of government energy subsidies

This chart is from a lengthy analysis of government energy subsidies by Nancy Pfund and Ben Healey, published by DBL Investors. You don't have to a be math genius to unpack its message (which is backed up by numerous other charts and graphs in the report): renewable energy has been subsidized to a far lesser degree than oil and gas, nuclear, and even biofuels.

Over the period of time it's been subsidized, the renewables sector has cost about $395 million per year. Nukes, subsided for a much longer period, averaged $3.57 billion. And oil and gas averaged $4.91 billion. 

Before you get all shocked at the unfairness of it all, remember that oil and gas have always been so important to the economy that subsidizing both at such high historic levels made sense. The cheap energy provided built an economy measured in the multi-trillions. 

Nukes, on the other hand, are a tougher sell. On the plus side, the power generated produces pretty much no CO2 emissions. Nuclear has also always been a great way to get a lot of energy out of very small amounts of fuel. Still, the nuclear industry has always relied on subsidies. Without taxpayer money, it might not even be a factor.

I've been engaged in some back-and-forth arguments about renewables and whether the industry can ever thrive on its own if it depends on subsidies to make its business model work. We've built up renewables so far on the cheap. But we'd have to spend billions to bring them to historic parity with oil, gas and nukes. In other words, we still have some room to spend, on industries like wind and solar. This is particularly imporant in Southern California, where solar power is already on its way to providing cheap, clean energy — just not at the scale we need to get off fossil fuels.

Follow Matthew DeBord and the DeBord Report on Twitter.

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