# Huge Energy Bill - Has House Approval

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"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.

pattylou said:
"who else should the money go to? "

I'd recommend any of the PV or wind companies or biocell (etc)
Why would that be?

loseyourname said:
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.

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.

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pattylou said:
"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.
kat said:
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)?

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Gold Member
russ_watters said:
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 [Broken]

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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
Staff Emeritus
Gold Member
The Smoking Man said:
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.

pattylou said:
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.

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
Staff Emeritus
Gold Member
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
Staff Emeritus
Gold Member
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.

loseyourname said:
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!!!

loseyourname said:
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
Staff Emeritus
Gold Member
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.

loseyourname said:
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?

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.

kat said:
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.

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loseyourname said:
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
Staff Emeritus
Gold Member
The Smoking Man said:
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
Staff Emeritus
Gold Member
SOS2008 said:
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.

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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.

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loseyourname
Staff Emeritus
Gold Member
pattylou said:
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.

loseyourname said:
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.

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Gold Member
loseyourname said:
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.

SOS said:
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
Staff Emeritus
Gold Member
SOS2008 said:
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.