News Huge Energy Bill - Has House Approval

[SOS2008]

I couldn't find the earlier thread on this topic... If I recall, members were pleased to see nuclear energy back on the horizon. But, what about this bill over all?

http://www.msnbc.msn.com/id/8739555/

House approves huge energy bill
Senate vote will follow; taxpayer groups, environmentalists oppose
July 28, 2005

WASHINGTON - The House by a wide margin approved a mammoth energy plan for the nation Thursday that sends billions of dollars in tax breaks and subsidies to energy companies, but is expected to do little to reduce U.S. oil consumption or dampen high energy prices.

As asked before, why are American tax payers subsidizing the oil industry, which is making record profits? How can such absurdity be passed...well in the house...where they passed the bill about burning the flag--figures I guess.

Here's what I will want to know in 2006 (so far):

1) Which members of congress displayed purple-inked fingers during Dubya's State of the Union address
2) Which members of congress were involved in the Terri Schiavo incident
3) Which members of congress voted against stem cell research
4) Which members of congress are voting for this energy bill

Etc. Let's start taking names on this kind of stuff and remember it well--and this goes for representatives of both parties.

 

[Pengwuino]

Here's what I will want to know in 2006 (so far):

1) Which members of congress displayed purple-inked fingers during Dubya's State of the Union address
2) Which members of congress were involved in the Terri Schiavo incident
3) Which members of congress voted against stem cell research
4) Which members of congress are voting for this energy bill

Etc. Let's start taking names on this kind of stuff and remember it well--and this goes for representatives of both parties.

... what does any (except #4) of those things have to do with energy policy... or is this one of those series of progression things.

And how does the government subsidize the oil industry? I hear that a lot but no ones ever explained it to me.

 

[pattylou]

The energy bill has lots and lots of money going to the energy companies that use "traditional energy." Take the link! It comes from your pocket!

What those have to do with energy policy? Little, but that isn't why they are linked. They are linked because they are all offensive to the "America" I was taught that I live in. The one where people have personal liberties, and education and dreams are funded, and we are a world leader! --- not backwards thinking stuck-in-the-mud religious "army of god" thinking that promotes preemptive invasions of sovereign countries as a means of doing daily business! And why?

What the hell. Answer : For a stable democracy in an *oil rich* country that will now be *friendly* to the US because we have set it up!

There were no weapons. Saddam was not linked to 9/11. We had no reason to go there.

Why does it always come back to Iraq? You figure it out. I know the answer.

(and yes, I'm a little drunk. )

 

[Pengwuino]

Why does it always come back to Iraq? You figure it out. I know the answer.

(and yes, I'm a little drunk. )

Because that's all people think they know about? :) Think fahrenheit 9/11 got a little too much publicity :-/

 

[pattylou]

I didn't see the movie, it looked like trash.

It's because the Iraq War embodies the agenda that the President stands for, that is manifest in every action he takes.

It's also because it represents his bald-faced lies to *you*.

 

[Pengwuino]

So his entire agenda is to free people? I understand...

 

[Archon]

So his entire agenda is to free people? I understand...

Exactly! But only if they have oil, of course.

 

[pattylou]

So his entire agenda is to free people? I understand...

His agenda is "My way or the Highway." It's selfish and self-promoting. It has nothing to do with working with other people, and has nothing to do with respect. I am talking about every issue from his "I'll unite this country but be damned if I'm going to meet the democratic senators halfway on Bolton, Rice, etc" rhetoric to "I will never endorse stem cell research, ever, it's way better to throw those embryos out."

His agenda allows lies and deceptions to achieve an end of domination. It plays on religiosity, and zero reason. It is neither considered nor wise. It is self-serving.

This is *wrong.*

And if he wanted to "free people" he could have started in any *number* of countries, and he could have started with humanitarian aid instead of bombs. Take your blinders off.

His agenda has more to do with *killing* people and "screw the US into ireversible debt" than with "freeing people."

I don't understand anything he does. I am glad Saddam is not in power. He was unsavory. So was the Shah of Iran, so was the Ayatollah Khomeini, so have lots of middle eastern leaders been. I think you're old enough to remember us *backing* Saddam against the Ayatollah in the '80's? Saddam was our *hero* against unchecked religiosity in the middle east. And *now* we're the one with the religious leader.

It's goddamn scary. And I've had even more wine!

 

[Pengwuino]

Ohh, so that's why we invaded afghanistan and didnt invade saudi arabia or argentina or Canada!

 

[Pengwuino]

His agenda is "My way or the Highway." It's selfish and self-promoting. It has nothing to do with working with other people, and has nothing to do with respect. I am talking about every issue from his "I'll unite this country but be damned if I'm going to meet the democratic senators halfway on Bolton, Rice, etc" rhetoric to "I will never endorse stem cell research, ever, it's way better to throw those embryos out."

Well that's weird because democratic senators are almost unanimous in their rhetoric of "no bolton, no way, no compromise". Substitute bolton for social security, roberts, federal judges, etc and you have reality.

 

[pattylou]

Actually, that isn't their rhetoric at all.

Their rhetoric is "Give us the goddamned documents, and we'll give you an up or down vote."

Period. Don't you read the news?

Incidentally, I haven't seen anythingout of DC but endorsement for Roberts. You're talking out of your ass.

(I'm officially drunk! LOL)

 

[pattylou]

And ps, funny about the federal judges, I recall they passed several not too long ago.

Hunh.

I also recall a much tougher time for Clinton's nominees. Hunh again.

 

[pattylou]

Ohh, so that's why we invaded afghanistan and didnt invade saudi arabia or argentina or Canada!

Hunh? You lost me here, bub. You drunk too?

Canada's free.

We invaded Afghanistan with global support to find Al Qaeda. And then we stopped to go invade another country for no good reason. Sure, it could have been Saudia Arabia. But Iraq is weaker so Bush thought it would be a cakewalk. Hah!

'My way or the Highway" kicked in with Iraq. See? It always comes back to Iraq. And that's why.

 

[Archon]

Ohh, so that's why we invaded afghanistan and didnt invade saudi arabia or argentina or Canada!

If this is adressed to me: I was being sarcastic in the sense that I don't believe Bush invaded Iraq solely for oil.

But you can't seriously argue that his agenda revolves around freeing all the people of the Earth from evil dictators: there are so many examples of countries whose people are suffering as much as or more than the people of Iraq under Hussein. Has Bush invaded these countries? No. This is quite a discrepency if his policy is based on spreading freedom throughout the world.

Your "argument" here is appalling. We invaded Afghanistan because the country was harboring the terrorist organization responsible for the 9-11 attacks. This was done with the support of the rest of the world, and was justified (in my opinion, and in most other peoples' as well). Iraq is different (obviously): they didn't attack us, they weren't linked to the 9-11 attacks, and they didn't really have WMDs. This begs the question: why Iraq, rather than some other country with an even more oppressive regime? The answer seems to be the Bush's goals are not as noble as you believe.

 

[loseyourname]

And how does the government subsidize the oil industry? I hear that a lot but no ones ever explained it to me.

According to the article, the bill includes $2.7 billion in tax breaks that will go to the oil and gas (natural gas, presumably, but the article doesn't say) industries. I don't know if they currently receive subsidies of this kind. Then again, the article also says that there is included in the bill $14.5 billion in total tax breaks being paid out to energy companies. Since only 19% of these subsidies actually seem to be going toward fossil fuel, I'm not sure why SOS insists that this is just a subsidy for the oil industry.

 

[Gokul43201]

I'm sure SOS was referring to Big Energy, in general.

Nearly two-thirds of the money does go to traditional energy companies. From the article :

The 1,725-page bill, the product of weeks of compromise between widely different versions approved by the two chambers earlier this year, would provide $14.5 billion in energy tax breaks, much of it to traditional energy companies.
...
The legislation’s tax breaks affect virtually every energy industry: $2.7 billion for oil and gas, $3.1 billion for electric utilities, $2.9 billion for the coal industry.

 

[SOS2008]

Please feel free to research more sources than this link--it's ALL over the news. You may recall that Bush's energy plan included assistance to oil companies to build more refineries, including a proposal to 'donate' old military bases (government land) for these purposes.

What do the other issues have to do with the energy bill? It shows a chain of unprofessional (purple-inked fingers, like it was high school graduation or something), unintelligent (stem cell research is scientific progress that would save lives), and right-wing radicalism (wasting time about burning the flag). This congress, particularly the house has hit another low with this energy bill.

Not to mention the usual Whitehouse thug tactics and scheduling votes in the middle of the night.

I hope all these things are brought up in 2006 elections.

 

[loseyourname]

I'm sure SOS was referring to Big Energy, in general.

Nearly two-thirds of the money does go to traditional energy companies. From the article :

Who is the money supposed to go to? Each provider has a regional monopoly within their territory. Are there really 'small' energy companies out there? The only companies with the means to innovate and develop new energy sources or expand existing non-fossil fuel sources are the big companies. I can understand complaining if this bill gives these companies no incentive to do anything but continue to burn (although in the case of the big utilities, all the ones around here primarily use hydroelectric power, complemented by the nuclear plants down in San Onofre, as far as I know), but don't simply complain because they're being given money.

Anyway, this article doesn't say much, and I doubt any other news service says much more. I'm just going to have to actually read the bill and then formulate an opinion. Until then, I may as well keep my mouth shut.

 

[russ_watters]

I'd also like a comparison between this and what has been done in the past. The energy industry is a government regulated monopoly and it has always been subsidized. How much, I don't know...

Regardless, if this bill does one thing - restart the US's nuclear program - it'll become the most environmentallly friendly and foreign-policy friendly energy policy in more than 20 years.

 

[Informal Logic]

Regardless of what has been done in the past (if it was wrong, two wrongs don't make a right), or that many people are pleased to see promotion of nuclear energy, one wonders why our representatives can't bargain to remove detrimental aspects of legislation. And in view of Bush's background and immense debt/obligation to the oil industry, how can one not feel wary of this bill?

 

[SOS2008]

Today as reported on CNN:

http://transcripts.cnn.com/TRANSCRIPTS/0507/29/ldt.01.html

DOBBS: And the Senate today also passed a mammoth energy bill one day after the House approved the same measure. President Bush will sign that bill into law sometime next week. But critics say the bill is laden with corporate subsidies. Congressman Henry Waxman the leading Democrat on the Committee on Government Reform recently discovered a $1.5 billion subsidy for research. Majority Leader Tom DeLay inserted this subsidy after it was already closed for further amendment. Normally research money is controlled by the government but more than $1 billion of this $1.5 billion will be controlled by a private consortium, the Texas Energy Center, located in Tom DeLay's home district in Sugarland, Texas. You've got to like that name, Sugarland.

Among the companies on the board, Halliburton and Marathon Oil. In total, the energy bill steers nearly $15 billion in tax breaks and subsidies to oil, gas and energy companies, all at a time when these companies are reporting record profits and oil prices are above $60 a barrel. Tonight's quote of the day comes from Congressman Ed Markey. This is what he had to say about that $15 billion giveaway.

"Right now, Adam Smith is spinning in his grave so fast that he would qualify as a subsidy in this bill as an energy source. That's how bad it is."

To borrow a phrase from, er, uh-hem, Alfred E. Neuman: "What me worry?"

 

[pattylou]

God! You've got to be kidding!

This can't be legal. And what the hell is Delay still doing mucking around with questionable ethics? What a slimebag.

 

[russ_watters]

That a Senator would send money toward his home state is unsurprising and certainly not unique to Republicans, so you cannot use that as a stick with which to beat Republicans. But step back and have a look at what you are opposing: R&D. Personally, I think the US government has a vested interest in funding energy R&D.

 

[pattylou]

Is it OK to do this as the quote suggests:

Majority Leader Tom DeLay inserted this subsidy after it was already closed for further amendment.

?

I'm not beating up *republicans,* I'm saying this behavior seems unethical. Whether it's been done before or not - it looks wrong. I *am* surprised that DeLay is doing *anything* that would get him noticed at the moment.

Furthermore, R&D *should* be financed. But if most R&D money is going to rich oil companies, then there is a problem.
I don't know how much is going to oil companies relatively speaking. I would hope to see that there is some reasonable balance among all the areas in our country that should be receiving money for research.

 

[loseyourname]

Majority Leader Tom DeLay inserted this subsidy after it was already closed for further amendment.

Isn't that a little strangely worded? How could he have amended a bill after it was closed for amendment? If he was able to amend it, then it wasn't closed for amendment.

About the R&D money going to big petroleum companies - again, who else should the money go to? These are the companies with the resources and manpower to actually develop alternative energy sources. They have a proven track record of success. What companies would any of you propose giving the money to?

 

[pattylou]

"who else should the money go to? "

I'd recommend any of the PV or wind companies or biocell (etc) that have nothing to do with oil.

I would cynically assume that the oil companies (1) don't need the money, (2) won't feel too motivated to get a non-oil product to market before oil runs out and (3) There was a third one but I can't remember it now.

 

[hitssquad]

"who else should the money go to? "

I'd recommend any of the PV or wind companies or biocell (etc)

Why would that be?

 

[The Smoking Man]

About the R&D money going to big petroleum companies - again, who else should the money go to? These are the companies with the resources and manpower to actually develop alternative energy sources. They have a proven track record of success. What companies would any of you propose giving the money to?

Considering the UK currently has a hydrogen powered motorcycle on the market and the Japanese have had Hybrids available for a few years now, how do you arrive at your conclusions?

By controlling the funds, big oil can and does control the speed of evolution in the power industry.

Allow them to control development and you give them license to allow the 'oil crisis' to progress to maximum return on the oil dollar while 'miraculously' coming in at the last minute with a solution.

What we are looking at is a classic 'fox watching the henhouse' scenario.

 

[kat]

The cost of this bill is $12.3 billion after revenue offsets. This is nearly twice the $6.7 billion amount Bush requested.

Bush has not passed it...It's possible Bush will veto it.


This bill passed with widespread political support, because...for the most part it has a li'l bit of pork in it for virtually every single one of them.

If you're really unhappy with this bill, it's time to contact the white house and demand a veto.

 

[SOS2008]

"who else should the money go to? "

I'd recommend any of the PV or wind companies or biocell (etc) that have nothing to do with oil.

I would cynically assume that the oil companies (1) don't need the money, (2) won't feel too motivated to get a non-oil product to market before oil runs out and (3) There was a third one but I can't remember it now.

Agreed. Subsidizing highly profitable industries, particularly those that will continue exploitation of fossil fuels, is complete nonsense. Subsidies should be given to companies that will offer alternatives and that need the assistance.

The cost of this bill is $12.3 billion after revenue offsets. This is nearly twice the $6.7 billion amount Bush requested.

Bush has not passed it...It's possible Bush will veto it.


This bill passed with widespread political support, because...for the most part it has a li'l bit of pork in it for virtually every single one of them.

If you're really unhappy with this bill, it's time to contact the white house and demand a veto.

So true about why the bill has support. With record deficits, it's difficult to understand how this huge amount of spending can be justified, regardless of where it is going.

There are similar concerns in regard to the transportation bill, though some argue it will create jobs and improve our economy (as was done during the depression?). Bush has said he would veto the transportation bill, but do you really think he'll veto an energy bill that matches his own proposed plan to assist oil companies, especially in the state of Texas (including Hallibuton)?

 

[SOS2008]

That a Senator would send money toward his home state is unsurprising and certainly not unique to Republicans, so you cannot use that as a stick with which to beat Republicans. But step back and have a look at what you are opposing: R&D. Personally, I think the US government has a vested interest in funding energy R&D.

I agree it is the norm for representatives to 'represent' their own constituents, because if they don't, they won't be reelected. That does not excuse wasteful spending, especially in times of record deficits, and bills such as this are being passed by a congress with republican majorities, and this is why these bills are able to be passed. If there is criticism, is it coming mostly from the GOP? No.

As for R&D, it is not my impression that anyone is arguing against R&D, just where our tax dollars would be best spent.

Why would that be?

Debate on energy alternatives has taken place in PF in great depth. This thread primarily is to discuss whether large, profitable oil companies should be subsidized by the American tax payers. Here is a link on the topic of subsidies:
http://earthtrack.net/earthtrack/index.asp?page_id=177&catid=66

 

[pattylou]

Why would that be?

Because they're start ups that can employ lots of people and not run out of work when oil runs out.

It's better economically to stimulate businesses that can stay afloat in the long term. We are not in any risk of running out of wind or sun in the next two generations.

(You didn't expect that answer, didja? Heheheh.)

 

[loseyourname]

Considering the UK currently has a hydrogen powered motorcycle on the market and the Japanese have had Hybrids available for a few years now, how do you arrive at your conclusions?

By controlling the funds, big oil can and does control the speed of evolution in the power industry.

But it isn't 'big oil.' Don't you see that? Only 19% of the funds are going to the fossil fuel industry. The other 'big energy' companies mostly use hydroelectric and nuclear power. And who developed all these Japanese hybrids? Large automakers, correct? Who has built most of the hydrogen filling stations in the US? BP and Ford, two large companies. It just makes sense to me to give money to companies that have a track record of success.

I would cynically assume that the oil companies (1) don't need the money, (2) won't feel too motivated to get a non-oil product to market before oil runs out and (3) There was a third one but I can't remember it now.

1) So what? Can we ever have enough R&D in a time when we so desperately need innovation? 2) Why on Earth would they not feel motivated? Do you really think they care that their money comes from oil and not some other source? Of course not. They just care that they are getting money. They're not going to intentionally bankrupt themselves by continuuing to rely indefinitely on a fuel source that will eventually be gone. This isn't like the airline scandals where CEOs were able to sacrifice long-term profitability because they knew they would be gone when it came time to pay for it. Since the industry in question is already quite profitable, they have no incentive to sacrifice anything and they have the opportunity to look more toward the future.

 

[pattylou]

Still, competition is good.

Invest in the start ups. The oil companies have the revenue to work on alternative energy on their own.

THe only thing that makes sense to me with how the chips are falling, is that the oil companies that DeLay is funneling to - contributed to his campaign, and this billion dollars is their payback. That may (or may not) be par for the course - but if it is, then the action isn't motivated by developing the best businesses possible. Rather, it's motivated by payback.

In which case we can't defend Delay by saying he was making a smart move for developing energy or creating jobs or any of the old standards. We can *only* say that he was protecting his political interests.

 

[loseyourname]

I'm not particularly interested in DeLay's motives. I usually assume that all politicians are mostly motivated in everything they do by the desire to get reelected. I'm more concerned that bills passed into law actually do the country some good, regardless of why it is being passed or written up the way it is.

 

[loseyourname]

By the way, if you're just criticizing DeLay, I'm with you on that. He's close to as low as they come as far as I'm concerned. Honestly, though, it's the local politicians I get fed up with mostly. The feds are mostly faceless to me, unless its my representative or senator.

 

[The Smoking Man]

But it isn't 'big oil.' Don't you see that? Only 19% of the funds are going to the fossil fuel industry. The other 'big energy' companies mostly use hydroelectric and nuclear power. And who developed all these Japanese hybrids? Large automakers, correct? Who has built most of the hydrogen filling stations in the US? BP and Ford, two large companies. It just makes sense to me to give money to companies that have a track record of success.

What I see is that 'nuclear energy' was being condemned by every country in the world a few years ago. It produced a waste that had a halflife, was suceptible to attack and calamity and was the major component in the production of weapons.

Major hydro-electric projects destroy massive amounts of the Earth and the ecosystems (Alcan, Three Gorges, to name two)

Somehow, the propaganda mill has been working overtime and nuclear waste has become a 'concern of the past' while we chase NKorea and Iran.

Who developed the Hybrids? Certainly not American car companies. They were developed in oil strapped Japan who always seem to look a few years beyond their US counterparts and thus dominate the markets.

Now that they have seen the success of the Japanese efforts and the UK hydrogen cycle, they are seeing an inevitable shift.

Remember, it is the USA who gave us the Hummer and the Humvee and has popularized the SUV!

1) So what? Can we ever have enough R&D in a time when we so desperately need innovation? 2) Why on Earth would they not feel motivated? Do you really think they care that their money comes from oil and not some other source? Of course not. They just care that they are getting money. They're not going to intentionally bankrupt themselves by continuuing to rely indefinitely on a fuel source that will eventually be gone. This isn't like the airline scandals where CEOs were able to sacrifice long-term profitability because they knew they would be gone when it came time to pay for it. Since the industry in question is already quite profitable, they have no incentive to sacrifice anything and they have the opportunity to look more toward the future.

All of the above is answered with 'supply and demand'.

If I can produce a gallon of gasoline and it is abundant, I can charge $1 per gallon. If I can produce 1 gallon of gasoline and it is rare AND there are no alternate sources, I can charge $10.

Rarity simply provides for a larger return on investment with the same efforts put forward... same cost for production.

'Big power' will look more to the future when they can no longer compete with 'small power'. Until that happens then where is the impetus to change the status quo?

Remember, when Bush became the Governor of Texas, he removed most of the EPA controls in the state. Austin took over from LA as the smog capital of the USA. These guys have no problem taking a sh!t where they eat.

 

[loseyourname]

Houston took over, not Austin, and I have no clue what anything in the rest of your post has to do with the energy bill. Focus your thoughts a bit, Smoking Man. I know you have a good point to make.

 

[The Smoking Man]

Houston took over, not Austin, and I have no clue what anything in the rest of your post has to do with the energy bill. Focus your thoughts a bit, Smoking Man. I know you have a good point to make.

Point taken on Houston.

My point is that money given to the standard 'big energy' areas means that they will delay experimaentation and development until it is convenient for them to have a competitor or unless forced to by competition.

Even competition can be squelched by 'large energy' purchasing a small competitor with 'grant money' and then shelving the project.

Does the legislation require an ROI? Is there any accountability for the money and how it is spent? Is there oversite?

Or is it corporate welfare?

 

[kat]

Small point Sm, No money is being "given" to large energy companies. They are being allowed to keep more of their own money through tax breaks.

 

[The Smoking Man]

Small point Sm, No money is being "given" to large energy companies. They are being allowed to keep more of their own money through tax breaks.

Riiiight... How silly of me.

 

[SOS2008]

But it isn't 'big oil.' Don't you see that? Only 19% of the funds are going to the fossil fuel industry. The other 'big energy' companies mostly use hydroelectric and nuclear power. And who developed all these Japanese hybrids? Large automakers, correct? Who has built most of the hydrogen filling stations in the US? BP and Ford, two large companies. It just makes sense to me to give money to companies that have a track record of success.

Okay...first, why is 19% going to profitable oil companies that by nature will exploit fossil fuel for as long as they can? With regard to other 'big energy' companies, since they also are highly profitable, why are they being subsidized (or should we say subsidized even more)? The big word here is profitable (or maybe you haven't had to pay a utility bill or go to the pump lately). More profit should be the motive for these companies to innovate--or maybe you're no longer a free market capitalist? Then let's go the full distance and nationalize utilities/energy.

 

[loseyourname]

Point taken on Houston.

My point is that money given to the standard 'big energy' areas means that they will delay experimaentation and development until it is convenient for them to have a competitor or unless forced to by competition.

Even competition can be squelched by 'large energy' purchasing a small competitor with 'grant money' and then shelving the project.

Does the legislation require an ROI? Is there any accountability for the money and how it is spent? Is there oversite?

Or is it corporate welfare?

Well, again, I haven't read the bill, but the article says that the tax breaks are earmarked for R&D. Presumably, there is little research to be done in drilling for more oil and building more dams. I would imagine that research focuses on nuclear and hydrogen power. As for your claim that big energy companies will have no incentive to innovate until they have competition from smaller companies - if that is the case, why are they already innovating? The Japanese companies that developed hybrid technology and the American automakers copying it are all big companies. The companies building hydrogen fueling stations and developing hydrogen powered vehicles - especially for mass transit buses - are all big companies. The companies that own nuclear power plants, reducing our dependence on fossil fuels, are all big companies.

There are many factors that can cause a company to innovate and develop new technology. One is the threat of a competitor doing the same (note: It need not be a 'small upstart' competitor - big companies compete with each other, too). Another is the threat of their current fuel source eventually running out. Yet another is money being alloted to them by the government mandating that they use it on new research.

 

[loseyourname]

Okay...first, why is 19% going to profitable oil companies that by nature will exploit fossil fuel for as long as they can?

What nature is that? The only nature of any big company is that it will do anything it can to make more money. If this means developing new technology and alternative fuel sources, then that's what they'll do. Oil isn't going to be profitable forever and they know that. No one has still answered my question about why BP - a big oil company - has been the largest developer of hydrogen fuel technology over the last several years, building bus fleets and fueling stations across the UK and US. Should we not encourage this?

With regard to other 'big energy' companies, since they also are highly profitable, why are they being subsidized (or should we say subsidized even more)? The big word here is profitable (or maybe you haven't had to pay a utility bill or go to the pump lately). More profit should be the motive for these companies to innovate--or maybe you're no longer a free market capitalist? Then let's go the full distance and nationalize utilities/energy.

All I can say to that is deregulation failed in California, so yes, I am wary of going free market. Last time that happened - only a few years back - we had blackouts everywhere, the Enron scandal, and Edison nearly went bankrupt. If they've recovered well enough to be 'very profitable,' that's news to me - okay, I looked it up and their profits have risen since then, but it's mostly because of smart investing, not utility revenues, which have remained about the same.

Look. Your complaint seems to just be that we're giving all these breaks and subsidies to companies that already have money in a time when the nation is strapped for cash. Believe me - I'm sympathetic to that concern. Personally, I'd end the war and spend even more money to develop alternative energy sources, but I do understand that, as long as we have the war going on, we can't just throw money at everything when that money isn't there. What I'm not sympathetic to are the complaints from others in this thread - not you - that the money is going to companies with a recent history of innovation, with plenty of incentive to continue innovating, and with the resources to do it on a large scale, rather than upstarts.

There is a simple reason for that that no one else has even brought up yet. Investing in startups is risky. 80% of new businesses, and I would imagine even more in the energy business, fail. That is why these upstarts are funded by venture capitalists, people willing to take a risk, people who have plenty of money to throw around. The government is not going to invest in upstarts, and it never has, because it is safer to invest in companies with a history of success, companies that you know will still be around many years from now. I know this isn't investing in the traditional sense is that the government is not buying stock and it will not get any return on this other than benefit to citizens, but even so. You don't give money to companies developing new technologies that have little chance of being successful when you can fund companies developing technologies that are already showing signs of being successful. What the government will fund in addition to research and development by large companies, something it has always funded and should probably fund even more, is university research.

 

[pattylou]

It's OK to mention me by name.

"You don't give money to companies developing new technologies that have little chance of being successful when you can fund companies developing technologies that are already showing signs of being successful. What the government will fund in addition to research and development by large companies, something it has always funded and should probably fund even more, is university research."

The start ups (not upstarts) that I know personally were born out of post-doctoral grant money. I agree that you fund basic research. I disagree that this is somehow different than funding start-ups. And the payoff is about the same (between funding basic research and start up companies), in terms of "success stories."

But you make some good points.

p.s. Edit: and on retrospection, what I meant by start ups was not maverick compaines, but young and growing companies that have established roots and demonstrated success. Example: a small solar manufacturer has more of a future ahead of itself, more chance to grow and employ lots of people, than an oil rig.

I know it isn't as simple as that. But that is the basic complaint I am making. Bush talks about technology for the 21st century, even as he outsources manufactuiring to other countries. Then we see an energy bill that does not emphasize 21st century technology, but rather, is a payback to the "old boys club." It stinks.

 

[loseyourname]

It's OK to mention me by name.

You're not the only one.

The start ups (not upstarts) that I know personally were born out of post-doctoral grant money.

Most of my knowledge of how they get funded comes from the dot.com boom here in the bay area in the nineties. That was funded almost entirely by venture capitalists. Heck, half the people starting the companies hadn't even completed their degrees. I'm pretty sure most biotech startups these days are started by university professors or clinical researchers that have been in the business a long time. It's likely that they largely fund themselves, but I really don't know. My roommate's father startups restaurants and bars and he gets his funding mostly from banks. I don't even know of any energy startups. What companies did you have in mind that you think should receive subsidies?

I agree that you fund basic research. I disagree that this is somehow different than funding start-ups. And the payoff is about the same (between funding basic research and start up companies), in terms of "success stories."

There is a difference, in that university research always has a payoff, even if it ultimately produces no viable technology. It may not have a monetary payoff, but since we're not discussing that kind of investing anyway, it doesn't matter. It pays off in that the knowledge gained is public - not a protected trade secret - and that many graduate students received good training in the process. Startups don't offer degrees.

But you make some good points.

Thank you for acknowledging that.

 

[pattylou]

I'm pretty sure most biotech startups these days are started by university professors or clinical researchers that have been in the business a long time.

Nothing in my earlier suggestions would preclude them from getting funding. This group of people is a different group than Exxon, Mobil, etc.

It's likely that they largely fund themselves, but I really don't know. My roommate's father startups restaurants and bars and he gets his funding mostly from banks.

The few I know, try to make ends meet by (1) finding investors and (2) using whatever information (research results and so on, to give them an edge) they can, from their federally funded research. If you find a gene, for example, that makes a protein that repels mosquitos, you might have the bright idea to start a company based on this gene (think of the applications: Malaria, West nile, camping comfort, etc) before (while) you publish your work. So, you are federally funded and you do that work in good conscience while at the same time looking for commercial applications.

I don't even know of any energy startups. What companies did you have in mind that you think should receive subsidies?

None specifically, but let me google...

Wow. If you plug "solar cell manufacturers" into google, and take the first hit, you go here:

http://www.solarbuzz.com/solarindex/CellManufacturers.htm

And *very quickly* see that the vast majority of companies are not US based.

So! I would suggest funding the few US based manufacturers. This would, incidentally, be consistent with "funding technology for the 21st century" which Bush likes to claim that he does. *Those* would be the sorts of companies I would direct the subsidies to, so that China, India, Japan ---- don't run with the market like some of them did with hybrid cars.

Does that seem reasonable to you? It seems obvious to me, and I am curious if I am "out to lunch" on this.

There is a difference, in that university research always has a payoff, even if it ultimately produces no viable technology.

In my experience it is the norm that a grant gets funded for proposing to accomplish X.

Often, it then fails to accomplish X and the primary investigators scramble to explain why the money was still well-spent, since, after all, the work ultimately accomplished Y, and could they get a new grant out of this?

I'm not cynical on the system (it seems unreasonable to me to predict scientific findings or meanderings or questions-that-will-arise before the research is completed.) But I disagree that "university research always has a payoff" as what I saw is the results being politicked to look good. On the other hand...

many graduate students received good training in the process. Startups don't offer degrees.

Good point, and agreed, but again, the start ups I am familiar with were born by post-docs doing their post doc. I'd give specifics, but that would be uncomfortably personal. Not that we started a company, but we do work for one such.

Thank you for acknowledging that.

You seem like a bright and balanced person. You're welcome.

 

[SOS2008]

Well, again, I haven't read the bill, but the article says that the tax breaks are earmarked for R&D. Presumably, there is little research to be done in drilling for more oil and building more dams.

I tend not to trust earmarking. A recent example is how money has been used by states for homeland security...a lot of it didn't go toward security at all. BTW, some of the R&D is for research into extracting more fossil fuel reserves.

There are alternatives that could be available right now. Why aren't these in place for full-scale use, right now? We know these companies have had the capital to do the R&D already. What really should be done is taxing these companies for not pursuing alternative energy. A much better incentive, wouldn't you say? And if companies like BP are doing their part, they would keep the tax breaks.

Instead we (the government, the people) are to provide assistance for R&D, from which they will reap the profits. Come on, how can anyone think there isn't any back-scratching going on, and as usual at the expense of the American citizen.

 

[TheStatutoryApe]

What really should be done is taxing these companies for not pursuing alternative energy.

It may be a bit niave or simplistic but I have been told that taxing large corperations in reality only hurts the consumer. The idea being that the taxes simply become another business expense which is passed on to the consumer through raised prices. Is this not really the case? Because it always seemed to make sense to me. If so perhaps there are other better ways of influencing these companies than taxing them.

 

[loseyourname]

What really should be done is taxing these companies for not pursuing alternative energy. A much better incentive, wouldn't you say? And if companies like BP are doing their part, they would keep the tax breaks.

Come on, SOS. In business, as in psychology, positive reinforcement generally works better than negative reinforcement. How do you treat your kids?

Instead we (the government, the people) are to provide assistance for R&D, from which they will reap the profits. Come on, how can anyone think there isn't any back-scratching going on, and as usual at the expense of the American citizen.

The expense of the American citizen? You don't think the American citizen has anything to gain from the development of new and better energy technologies? Of course there is back-scratching going on. There always is in politics. Such a thing doesn't preclude a positive impact on the citizenry.