Subsidies for Energy: What are the Limits?

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Date(s) - 9/16/201112:00 am

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On November 16, the George C. Marshall Institute hosted a panel discussion concerning federal energy policy, specifically the utility of federal subsidies, loan guarantees, and other forms of support.

The current controversy surrounding the failed federal loan guarantees to Solyndraoffer the opportunity to explore more broadly the manner in which public support is provided to energy research and technology development and whether such investments are effective.

The U.S. spends billions annually to support the energy industry using an array of tools and approaches. The U.S. Energy Information Administration (EIA) reports “The value of direct federal financial interventions and subsidies in energy markets doubled between 2007 and 2010, growing from $17.9 billion to $37.2 billion. In broad categories, the largest increase was for conservation and end-use subsidies, followed to a lesser degree by increases in electricity-related subsidies and subsidies for fuels used outside the electricity sector.

The Institute hosted a discussion to consider the range of questions now before the public, notably

    • What is the role of government in promoting energy technology?
    • Is there a role beyond basic research?
    • Should government carry out R&D on specific technologies?
    • Can a case be made for loan guarantees?
    • Are there examples of loan guarantees that produced positive results?
    • Are tax credits an effective way to move technologies to market?

Institute CEO William O’Keefe moderated the discussion.

Panelists included:

  • Dr. Michael Canes, Distinguished Fellow at the Logistics Management Institute;
  • Glenn Schleede, formerly President, Energy Market and Policy Analysis, Inc. (EMPA) and formerly Vice President of New England Electric System (NEES) and President of its fuels subsidiary, New England Energy Incorporated.

 

Subsidies for Energy: What Are the Limits?

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