Xebec
Well-known member
Do you not consider tax breaks subsidies? It's trivial to find examples of these measured in the $B USD range.
AI data centers are forcing dirty ‘peaker’ power plants back into service
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Do you not consider tax breaks subsidies? It's trivial to find examples of these measured in the $B USD range.
Of course I did.
I made up the 95th percentile example, though the strategy is real, especially for areas still dependent on coal plants or nuclear.
You can also sell the "excess" base load power regionally if there is transmission line capacity available. There are numerous current examples.
Of course I do. I just have a problem with the assertion that oil and gas companies get special subsidies. They're not special, and they're not specific to oil. Like I said, I very much dislike subsidies of any kind. I like market economies; I think they are the best allocators of capital. I also don't like tax breaks or subsidies for EVs, solar panels, or wind power. I think any subsidies or tax breaks just distort the economy. I'm a fan of accuracy, even if it tastes bad.
jms_embedded
Well-known member
Well, that's true. Most of the power from the Palo Verde Generating Station (nuclear plant in Tonopah, AZ, just west of Phoenix) allegedly goes to California, but I don't have a source for this.
Xebec
Well-known member
I am 100% with you on free market principles. (Within reason - an industry that physically harms people is probably something that requires.. at least tweaking
). Here's a few special subsidies that are unique to oil:
- See my post above about the government picking up the tab for plugging old and unused oil wells
- Intangible Drilling Costs Deduction (26 U.S. Code § 263. Active). This provision allows companies to deduct a majority of the costs incurred from drilling new wells domestically.
- https://en.wikipedia.org/wiki/Master_limited_partnership - a special business type with tax benefits that is essentially limited to resource gathering operaitons such as oil and gas ( "Section 7704 of the Revenue Act of 1987 limited which businesses could be MLPs, delineating that an MLP must earn at least 90% of its gross income from qualifying sources, which were strictly defined as the transportation, processing, storage, and production of natural resources and minerals. ")
- The US has a Strategic Petroleum reserve which is used to stabilize oil/fuel availability. While I think this is a good idea, I'm not aware of any other massive strategic reserves that support similar industries? It's a supply cost burdened by the US taxpayer that is unique to fossil fuels.
New Mexico also buys power from Palo Verde, though New Mexico utilities are quickly switching to renewables because New Mexico gives them so many tax breaks to do the switch to wind and solar. Personally, I'd rather have nuclear that doesn't mess up the landscape and cost tax dollars. But that's just irrational old me being grumpy again.
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The military investment admittedly isn’t a direct subsidy toward keeping energy prices low, but the 5th Fleet and its precursor deployments into protecting Anglo-American oil interests in Iran and Saudi Arabia had that intended effect. And for the exactly the reason you claim - higher gasoline prices at the national level are a “third rail” in US politics.
Today the 5th Fleet S. secures sea‑lanes used by all importers, Washington effectively socializes the cost of “energy security” while all consumers, foreign and domestic, benefit in the form of lower world prices. From a U.S. domestic perspective, this can be seen as an off‑budget energy subsidy: taxpayers fund the Fifth Fleet and related posture so that energy‑price risk is suppressed, a benefit that accrues to motorists, airlines, industry, and the politically sensitive pump prices.
To put it differently - the 5th Fleet and associated expenditures wouldn’t likely exist if cheap energy came from other sources.
Everything regarding human behavior requires some moderation.I am 100% with you on free market principles. (Within reason - an industry that physically harms people is probably something that requires.. at least tweaking
That's what happens when drilling companies go out of business.
Good examples, but my understanding is that these are mainly for wildcat drillers.
The Strategic Oil Reserve doesn't support the oil industry, it is used to stabilize oil prices due to geopolitical situations. And please tell Mr. Trump to get off his administrative butt and start refilling the Oil Reserve, since it was depleted by the Biden Administration after Russia invaded Ukraine.
Hmmm... I'm not knowledgeable enough to argue with that assertion.
Would the US have jumped into the Gulf War the way we did id if it did not involve 3 of the biggest oil exporters (Kuwait, Saudi Arabia, Iraq) ? The re-formation of the 5th Fleet was basically driven by the aftermath strategy to the Gulf War.
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jms_embedded
Well-known member
I think if you had the whole picture in front of you, with externalities included (tax subsidies to all sorts of industries, not only wind energy; net present value of storage and cleanup costs for nuclear waste), it might be very hard to decide.
I'm ok with nuclear as long as there are safeguards. Palo Verde is an odd duck, though; it gets its cooling water from Phoenix's reclaimed water (partially treated waste water not suitable from drinking), and at some point soon (now?) there will be (is?) economic competition over reclaimed water, and it's no longer this excess thing that we can throw at the nuclear plant to solve another problem.
Right now, the city of Chandler has a written agreement with the Gila River Indian Community (GRIC) where for every 10000 gallons of reclaimed water we give them, we get 8000 gallons of Central Arizona Project (Colorado River) water from GRIC's allocation. They get more water than they would from CAP, because they need water for irrigation, not drinkable; we get drinkable water from a source that is easier to treat. This works up to a certain per-year limit in the agreement. But there may come a time where treating our own reclaimed water is less expensive / more secure than exchanging it for other uses.
I have to admit, it's mostly the high availability and 24 hour consistency that attracts me. And the generation is carbon-free, but the concrete containments must take a huge carbon investment. I also like far less land area than wind or solar for similar output, and no noise like wind.
Nothing that generates gigawatts will be perfect in our lifetimes, IMO.
jms_embedded
Well-known member
Which technologies would you prefer most to handle the load variation, assuming that nuclear can't handle it for either technological or economic reasons?
(I'm not trying to make a point, I just want to hear your opinion)
I haven't been asked a question that draws so many "it depends" caveats in like forever. Nonetheless, I'll play along.
If I had the transmission capacity available to my local grid, I'd prefer buying the power and probably capacity on the regional wholesale electric market. If my climate was variable enough and my nuclear plant big enough, I'd also play in the market as a sometimes demand response provider.
For those who aren't aware of these regional US power markets:
If I couldn't buy power on the fly (like I was in a region without power auctions), I'd probably pursue gas turbine peaker plants. Renewables are a pain in the butt, because just when you really need them there's a non-trivial chance the wind isn't blowing or the sun isn't shining. Now if geothermal made sense... okay, I can dream. Just thinking about the load variation problem, I don't think I'd accept a job in a region without a regional wholesale market.
I'm not sure if it's an apples to apples comparison, but I do want to note how much was spent for the relocation of tortoises in the Ivanpah solar electric generating system project over a decade ago:
And we just completed the Wallis Annenberg wildlife crossing for about a $100 million in the middle of a fairly urbanized area because at least a dozen mountain lions were killed on the freeway. Mind you, I'm not necessarily against the idea of protecting wildlife, but one has to wonder why it costs California $100 million to build one, versus Colorado that just built a larger one for $15 million or $23 million in San Antonio for a similar sized one in a relatively urbanized area, and for additional context from Canada:
A funny thing is they studied what types of animals were utilizing the wildlife crossings in Canada, prey animals preferred overpasses while predatory species used underpasses... if the intended purpose was to save mountain lions, could've just tunneled a small culvert.
If you guys want an excellent dataset to do some cost comparisons between countries, here's one I recommend: https://transitcosts.com/new-data/
It's the cost for public transportation projects around various countries/cities around the world, I use this for quite a few of my talks as a reference point to show construction costs for various countries. It shows there isn't a very linear correlation between labor costs or per capita GDP and cost per km of rail, and as much as East Asia gets recognition for getting things done, there are other bright spots in places around the world that are as competitive and, well, gives me hope. Not many, but still!
Oh come on! I really wanted the Brits to win this inefficiency contest!
It's okay, they might take back the crown if Hinkley Point C ever gets completed. I'm about as pro-nuclear power as it gets, but this is definitely an area the west has completely lost its marbles. Vogtle 3 and 4 in Georgia were outrageously priced at nearly $20 billion each, but Hinkley C looks to completely obliterate those numbers at $25 billion plus each when complete.Frankly, I don't see SMRs moving the needle that much in regards to cost in the US. Any nuclear power plant over $10/w in generation capex is going to have a hard time being competitive and I have yet to see numbers that suggest SMRs that achieve that. I'm all renewables at my off-grid home and think anyone living in a single detached home in the US should do a solar plus battery system not for environmental reasons, but purely to save money. The crazy thing is, if you consider the average 1 GW nuclear power plant in the west will end up being easily over $15B, you can build out a 5 GW solar development with 120 GWh of battery capacity for about the same initial CapEx costs. When the guys who are against renewlabes come out with their arguments, they're always using data from years past when it comes down to carbon emissions or lifecycle costs, what people fail to realize is these following graphs:
Price of solar modules went from over $100 per watt in 1975 to just 7 cents per watt in 2025, lithium batteries went from over $5000 per kwh to about $30 per kwh today. And both of these are on track for continued priced reductions, less than 5 cents per watt and $20 per kwh before the end of the decade. No other energy generation method had cost reductions like that. LCoE of solar is already amongst the cheapest in the developed world, definitely lower than CC NG and coal. And just for context on scale, the top solar module manufacturer shipped 100 GW of solar modules this year. 100 GW! Maybe the equivalent total output of 20 to 25 nuclear power plants, for one single company. Top 10 module manufacturers shipped 500 GW or equivalent to over 100 nuclear power plants. As of this year, PV solar generated more energy than all nuclear power plants combined in the world. The lower hanging fruit of offsetting peak consumption is being addressed in the mos developed markets so the biggest factor is storage, but with storage costs dropping year by year, it's just a matter of time. DOE's SunShot 2030 goals have already been reached and I think the cost trajectory can beat the most optimistic SunShot 2050 LSC (low storage cost) goals by the end of the decade.
Hard to say, a lot of people make that assertion but in terms of actual gains the US has directly received from the involvement in the Gulf Wars, it's not much, or certainly not proportional to the size of the US economy. Go look up all the concessions obtained from Iraq, US companies make up a smaller share than companies from the UK, China or even Malaysia or Italy or Russia on the upstream side. US isn't even a top 5 purchaser of crude oil from Iraq, Kuwait or Saudi Arabia today though it was 20 years back, and if anything, their respective governments receives a royalty from each barrel produced, so the biggest beneficiaries should be the gulf countries for having stability in the region.
Lower crude prices, that's a really difficult thing to define. WTI and Brent are right around $60 a barrel right now, which makes it essentially impossible for new wells to be profitable in the US. Considering over 2/3 of all production in the US is from unconventional plays, and considering almost all new wells are unconventional plays, essentially if price per barrel drops any further, it won't be profitable for US producers to continue production. This chart below shows break even price for US producers from various basins for new and existing wells, and keep in mind, productivity for these formations drop on average more than 80% after 5 years so you can't rely on the existing wells figures for long term projections. This is essentially why we have the Intangible Drilling Cost deduction, fracking tight oil involves so much costs to drill for much shorter returns vs conventional plays in the past. If it wasn't for that, it's a gamble spending $5+ million for drilling on a site with returns that might look great the first year but quickly drop the next few years.
So it's a delicate balance to keep crude oil in a range where we can have cheap gas while preserving profitability of domestic oil producers. And reducing conflict and by extension, price volatility in the middle east region is why the Fifth Fleet's presence is important...not just for the United States, but the Chinese, Japanese, Koreans, Indians, Europeans and the rest of the world that imports more crude oil than we do here in the US today.
Not for me. My electric bill is about $2K/year, estimating high. I likely won't live long enough to get to breakeven. (My home is just under 4K sqft.) I also spend about another $1.5K on natural gas for heat and hot water, but going to all electric would cost about $30K. No way that pays off.
If we had two electric vehicles, that would move the pure energy breakeven point earlier, but I'm not a fan of current EV technology, and two EVs for us would be at least $100K. That isn't happening either.
Yeah, but there's a lot more to solar generation than just panels and batteries. You need about 5000 acres of land per gigawatt, correct? In a lot of highly populated areas of the US (like the northeast) you don't see a lot of sun in the winter either.
I am anxious to see the SMR numbers, if I live long enough.
Great analysis, but not entirely convincing.
san francisco had an infamous case of taking tax payer $1.5M to build a single stall public bathroom, or something like that. the point is the actual building cost is <10% of the total cost, and majority of that is for the government regulation and required paperwork. sad part is California is on the doubling down on these kind of BS
This kind of silliness is everywhere!!