Friday, June 12, 2009

The Joys Of Regulatory Capture

TW: The Federal government is subsidizing "renewable energy". I would think most folks when thinking of "renewable" energy would bring to mind solar, wind, and maybe hydro. But thanks to our ever powerful energy lobbyists (who are merely agents for citizenry of various ilks), that definition is being broadened...greatly. This is a typical phenomenon known as regulatory capture. The government initially attempts to do one thing with a regulation and ends up doing something very different as legislation gets overtaken by powerful interest groups.

Every industry of any size and many of limited size spend millions to bend governance away from the common good towards their own unique interests. Is it socialism or free-market lobbying?

To paraphrase an old quote:
Democracy the worst form of government ever invented, except compared to all others"

From NYT:
"The definition of renewable energy seems clear cut: The sun continues to shine, so solar energy is renewable. The wind continues to blow, so wind turbines churn out renewable power.

But industries are now pushing to have a growing number of other technologies categorized as renewable — or at least as environmentally advantageous. They include nuclear power plants and the burning of garbage and even the waste from mines.

The lure of the renewable label is understandable. Federal tax breaks for renewable energy have been reauthorized, and quotas for renewable energy production have been set in 28 states, accompanied by extensive new grants, loans and other economic advantages.

...In some states, the definition of “renewable” or “alternative” has already expanded. In Pennsylvania, waste coal and methane from coal mines receive the same treatment as solar panels and wind turbines. In Nevada, old tires can count as a renewable fuel, provided microwaves are used to break down their chemical structure.

About half of the 28 states with renewable mandates include electricity generated by burning garbage (the District of Columbia also has a quota for renewable energy). In Florida, the nuclear power industry is lobbying to be included but has not yet succeeded.

Government incentives for renewable energy were intended to give an economic boost to technologies like wind and solar power that were not yet economically competitive with coal and natural gas, which together provide more than two-thirds of the country’s electricity.

...If a source of electricity already widely used by some utilities — hydropower or nuclear power, for example — is deemed renewable, it allows utilities to meet the new renewable-energy requirements while doing little to add wind or solar power to the electrical grid. House Republicans tried unsuccessfully last week to have nuclear energy included under the climate bill passed by the House committee.

...But some of the industries that have claimed the renewable mantle argue that they deserve it.
“A banana is renewable — you can grow them forever,” said Bob Eisenbud, a vice president for government affairs at Waste Management, which receives about 10 percent of its annual revenues of $13.3 billion from waste and landfill energy generation. “A banana that goes into garbage and gets burned,” he added, is “a renewable resource and producing renewable energy.”

...Graham Mathews, a lobbyist representing Covanta Energy, another waste-to-energy company, said the political horse-trading on renewable energy legislation was typical of all energy measures. “Energy policy is balkanized by region, and that dictates the debate. The politics become incredibly complicated,” he said.

“Stepping back and looking at it,” Mr. Mathews added, “it sometimes doesn’t make a lot of sense.”
http://www.nytimes.com/2009/05/25/business/energy-environment/25renew.html?_r=1&scp=9&sq=felicity%20barringer%20renewables&st=cse

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