Wasteful subsidies for me and thee, not for that fossil guy behind the tree

Benjamin Zycher of AEI.

"Sometimes leftist environmentalists have a point. For instance, they argue that oil subsidies are wasteful and should be abolished. Unfortunately, they typically pollute their sound argument with gross inconsistency and unwarranted alarmism.

Oil Change International, a group of mainstream leftist environmental pressure organizations, has published two recent papers complaining that the G20 governments, through international and national development banks, continue to finance fossil-fuel projects around the world, with insufficient subsidies for “clean energy,” defined as renewables not including hydro and some others. The group explains the rationale for its prescription as follows: “The best available science shows an urgent need to keep global temperature increases below 1.5°C to avoid severe disruptions to people and ecosystems.”

This anti-oil coalition is absolutely correct that subsidized finance for fossil-fuel projects is highly wasteful. It is one thing to subsidize fossil fuel development as a step in economic development, to alleviate acute poverty in developing countries. But where this is not the case, the financing of highly profitable commercial undertakings such as fuel production should be the job of the private sector. Businesses have powerful incentives to evaluate the economic merits of alternative projects, with a vastly smaller role for political factors. By definition, the opposite is true for government finance agencies, such as the World Bank and the U.S. Export-Import Bank.

The problem is that in the same breath they attack oil subsidies, Oil Change International, demands subsidies for solar installations and windmills, citing environmental doomsday scenarios to justify this distortion of the public discussion on energy development.

 

First, it should be noted that the purportedly adverse effects of increasing greenhouse gas concentrations—the driving rationale for the OCI argument—are nowhere to be found in the data. There exists a scientific consensus about the reality and causes of global warming. There is no such consensus about its potential effects, which could range anywhere from mildly beneficial to catastrophic.

OCI’s even more disingenuous claim is that “clean renewables … are needed to improve energy access” for the poor in less developed economies. That assertion is preposterous. Renewables are simply more costly than conventional energy, in large part because the energy content of sunlight and wind flows is unconcentrated, unlike the case for fossil fuels. The wind doesn’t always blow, and the sun doesn’t always shine, and that makes it less practical and thus more expensive to harness their power in a useful form. Except perhaps for specialized and highly limited applications in localized contexts, higher costs translate to less access. This is why development banks, when they fund energy projects for less-developed economies, often choose fossil fuels.

Moreover, there is nothing “clean” about renewables. There is the heavy-metal pollution created by the production process for wind turbines, along with their noise and flicker effects. There is the large problem of solar panel waste. There is the wildlife destruction caused by the production of renewable power. There is the land use both massive and unsightly, made necessary by the unconcentrated nature of renewable energy.

And above all: There is the increase — yes, increase — in the emissions of conventional effluents caused by the up-and-down cycling of the conventional backup generation units needed to avoid blackouts caused by the unreliability of wind and solar power.

 

So this plea by the leftist environmentalist groups—more government subsidies for more expensive energy, less for cheaper energy—is highly problematic. It is yet another example of ideology masquerading as analysis, premised upon energy and climate assumptions vastly at odds with the evidence. Those managing the development banks would be wise to ignore it."

Here is an excerpt from the "heavy-metal pollution" link above from the Institute for Energy Research:

"Rare Earth Horrors

Manufacturing wind turbines is a resource-intensive process. A typical wind turbine contains more than 8,000 different components, many of which are made from steel, cast iron, and concrete. One such component are magnets made from neodymium and dysprosium, rare earth minerals mined almost exclusively in China, which controls 95 percent of the world’s supply of rare earth minerals.

Simon Parry from the Daily Mail traveled to Baotou, China, to see the mines, factories, and dumping grounds associated with China’s rare-earths industry. What he found was truly haunting:

As more factories sprang up, the banks grew higher, the lake grew larger and the stench and fumes grew more overwhelming.
‘It turned into a mountain that towered over us,’ says Mr Su. ‘Anything we planted just withered, then our animals started to sicken and die.’
People too began to suffer. Dalahai villagers say their teeth began to fall out, their hair turned white at unusually young ages, and they suffered from severe skin and respiratory diseases. Children were born with soft bones and cancer rates rocketed.
Official studies carried out five years ago in Dalahai village confirmed there were unusually high rates of cancer along with high rates of osteoporosis and skin and respiratory diseases. The lake’s radiation levels are ten times higher than in the surrounding countryside, the studies found.

As the wind industry grows, these horrors will likely only get worse. Growth in the wind industry could raise demand for neodymium by as much as 700 percent over the next 25 years, while demand for dysprosium could increase by 2,600 percent, according to a recent MIT study. The more wind turbines pop up in America, the more people in China are likely to suffer due to China’s policies. Or as the Daily Mail put it, every turbine we erect contributes to “a vast man-made lake of poison in northern China.”

Big Wind’s Dependence on China’s “Toxic Lakes”

The wind industry requires an astounding amount of rare earth minerals, primarily neodymium and dysprosium, which are key components of the magnets used in modern wind turbines. Developed by GE in 1982, neodymium magnets are manufactured in many shapes and sizes for numerous purposes. One of their most common uses is in the generators of wind turbines.

Estimates of the exact amount of rare earth minerals in wind turbines vary, but in any case the numbers are staggering. According to the Bulletin of Atomic Sciences, a 2 megawatt (MW) wind turbine contains about 800 pounds of neodymium and 130 pounds of dysprosium. The MIT study cited above estimates that a 2 MW wind turbine contains about 752 pounds of rare earth minerals.

To quantify this in terms of environmental damages, consider that mining one ton of rare earth minerals produces about one ton of radioactive waste, according to the Institute for the Analysis of Global Security. In 2012, the U.S. added a record 13,131 MW of wind generating capacity. That means that between 4.9 million pounds (using MIT’s estimate) and 6.1 million pounds (using the Bulletin of Atomic Science’s estimate) of rare earths were used in wind turbines installed in 2012. It also means that between 4.9 million and 6.1 million pounds of radioactive waste were created to make these wind turbines.

For perspective, America’s nuclear industry produces between 4.4 million and 5 million pounds of spent nuclear fuel each year. That means the U.S. wind industry may well have created more radioactive waste last year than our entire nuclear industry produced in spent fuel. In this sense, the nuclear industry seems to be doing more with less: nuclear energy comprised about one-fifth of America’s electrical generation in 2012, while wind accounted for just 3.5 percent of all electricity generated in the United States.

While nuclear storage remains an important issue for many U.S. environmentalists, few are paying attention to the wind industry’s less efficient and less transparent use of radioactive material via rare earth mineral excavation in China. The U.S. nuclear industry employs numerous safeguards to ensure that spent nuclear fuel is stored safely. In 2010, the Obama administration withdrew funding for Yucca Mountain, the only permanent storage site for the country’s nuclear waste authorized by federal law. Lacking a permanent solution, nuclear energy companies have used specially designed pools at individual reactor sites. On the other hand, China has cut mining permits and imposed export quotas, but is only now beginning to draft rules to prevent illegal mining and reduce pollution. America may not have a perfect solution to nuclear storage, but it sure beats disposing of radioactive material in toxic lakes like near Baotou, China.

Not only do rare earths create radioactive waste residue, but according to the Chinese Society for Rare Earths, “one ton of calcined rare earth ore generates 9,600 to 12,000 cubic meters (339,021 to 423,776 cubic feet) of waste gas containing dust concentrate, hydrofluoric acid, sulfur dioxide, and sulfuric acid, [and] approximately 75 cubic meters (2,649 cubic feet) of acidic wastewater.”"