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How do I square this with claims that the US heavily subsidizes fossil fuels? Are those claims false or am I misunderstanding how the market works?

by skulk 2y ago

JumpCrisscross 2y ago
> How do I square this with claims that the US heavily subsidizes fossil fuels? By noting it’s irrelevant. Solar production isn’t capital constrained. Certainly not in the West.
- skulk 2y ago
  > Fission power remains uncompetitive with natural gas; you’d have to convince Western consumers to bear higher prices for reduced emissions which nobody is willing to do. I was mainly reacting to this. Can nuclear really not compete with gas even if the government subsidized both equally? (with all the caveats that come with comparing subsidies)
  - moomin 2y ago
    I have no idea whether fission plants are competitive with gas plants, and knowing a bit about multi-decade projects, I suspect no-one does. It’s all guesswork. What I do know is fission has a horrible cost profile. First there’s a huge build cost, which can often skyrocket unpredictably. Then you’ve got a hugely profitable part where you’re basically printing money. Then there’s an enormous cost at the end. Huge cleanup costs, whether it’s nuclear or coal, basically means either government has its eye on the ball to an excellent extent (Australia seems to be good here.) or it’s not going to be fixed except by the same government that didn’t tie down the guys who made the money enough. I’d call fission a bad choice for countries with weak or chaotic government. You need a rock solid civil service to allow it. (You’ll observe the same is true of almost every mineral extraction project.)
nradov 2y ago
That really depends on what you count as a subsidy. The federal government isn't really making direct payments to fossil fuel companies. Some of them are allowed to lease federal lands at what might be considered below-market prices. The US military helps to provide free security for some oil exporting countries. Fossil fuel producers and customers are allowed to emit pollutants without paying for cleanup or remediation costs. Are those subsidies? Depends on your perspective.
- skulk 2y ago
  I see at least 4 direct subsidies listed here: https://www.eesi.org/papers/view/fact-sheet-fossil-fuel-subsidies-a-closer-look-at-tax-breaks-and-societal-costs#1 https://www.eesi.org/papers/view/fact-sheet-fossil-fuel-subs...
  - s1artibartfast 2y ago
    Those are minuscule subsidies compared to the size of the industry.

How do I square this with claims that the US heavily subsidizes fossil fuels? Are those claims false or am I misunderstanding how the market works?

by skulk 2y ago

How do I square this with claims that the US heavily subsidizes fossil fuels? Are those claims false or am I misunderstanding how the market works?

JumpCrisscross 2y ago

> How do I square this with claims that the US heavily subsidizes fossil fuels? By noting it’s irrelevant. Solar production isn’t capital constrained. Certainly not in the West.

skulk 2y ago
> Fission power remains uncompetitive with natural gas; you’d have to convince Western consumers to bear higher prices for reduced emissions which nobody is willing to do. I was mainly reacting to this. Can nuclear really not compete with gas even if the government subsidized both equally? (with all the caveats that come with comparing subsidies)
- moomin 2y ago
  I have no idea whether fission plants are competitive with gas plants, and knowing a bit about multi-decade projects, I suspect no-one does. It’s all guesswork. What I do know is fission has a horrible cost profile. First there’s a huge build cost, which can often skyrocket unpredictably. Then you’ve got a hugely profitable part where you’re basically printing money. Then there’s an enormous cost at the end. Huge cleanup costs, whether it’s nuclear or coal, basically means either government has its eye on the ball to an excellent extent (Australia seems to be good here.) or it’s not going to be fixed except by the same government that didn’t tie down the guys who made the money enough. I’d call fission a bad choice for countries with weak or chaotic government. You need a rock solid civil service to allow it. (You’ll observe the same is true of almost every mineral extraction project.)

nradov 2y ago

That really depends on what you count as a subsidy. The federal government isn't really making direct payments to fossil fuel companies. Some of them are allowed to lease federal lands at what might be considered below-market prices. The US military helps to provide free security for some oil exporting countries. Fossil fuel producers and customers are allowed to emit pollutants without paying for cleanup or remediation costs. Are those subsidies? Depends on your perspective.

skulk 2y ago
I see at least 4 direct subsidies listed here: https://www.eesi.org/papers/view/fact-sheet-fossil-fuel-subsidies-a-closer-look-at-tax-breaks-and-societal-costs#1 https://www.eesi.org/papers/view/fact-sheet-fossil-fuel-subs...
- s1artibartfast 2y ago
  Those are minuscule subsidies compared to the size of the industry.