President Obama’s FY 2011 budget contains some shiny baubles for renewable energy but doesn’t commit anywhere near the amount necessary to help the industry compete with fossil fuels, critics say.
J.P. Morgan analyst Christopher Blansett made that point to Reuters this morning and Dot Earth blogger Andrew Revkin said effectively the same thing, in a slightly different context, to us a few weeks ago.
The industry needs sustained government support on the order of hundreds of billions to create a renewable energy standard. That would require funding roughly equal to the 2009 green energy stimulus every year for a decade and beyond.
That is not likely to happen given the budget constraints caused by two wars, a recession and the previous stimulus package.
Blansett puts the cost of funding a national electricity standard that requires 15 percent of all electricity to come from renewable resources by 2020 at $158 billion to $445 billion.
A quick look at the budget’s investment in energy programs, to take one area of funding, shows that money just isn’t there.
For example, $500 million in credit subsidies would go to support $3 to $5 billion in loan guarantees for energy efficiency and renewable energy projects, but the support is still indirect support and won’t likely provide enough incentive for a large scale build out.
Likewise, the $300 million slated for Advanced Research Project Agency – Energy (ARPA-E) will up the funding for whiz-bang technologies but not anywhere near enough.
Finally, there’s the question of doing away with $38.8 billion in tax subsidies for oil, coal and gas industries.
Grist’s David Roberts was pleased but realistic about the fossil fuels losing out, noting that “such efforts have failed in congress many times before, so this one gets filed under… aspirational.”
But FT’s Energy Source blasted Obama for short sightedness in the move.
While there is clearly an important role for start-ups and pure-play companies, the chances of getting truly scalable clean energy would be boosted by partnership with the fossil fuel industry.
Of course, this argument holds a lot less force when, as we wrote this morning, BP is cutting $4 billion out of its Renewable Energy Unit.