Hidden Subsidy and Greenpeace "Point of no Return"
Greenpeace is out with a new report about climate change. The report "Point of no Return" is focused on preventing the largest planned carbon producing projects from going forward.
The report has a nice 3 page executive summary and lots of pretty graphs (and scary photos).
And a huge amount of information...I've only skimmed it, but one particularly noteworthy "nugget" that I found buried in the appendix (pg. 44) is a wonderful example of a "hidden subsidy" that the coal industry gets year in and year out...
I decided to highlight this "hidden subsidy" with a post, because I bet 99% of the public has no idea this is going on. Also, it drives me nuts when I see all those ads about how important "clean" affordable coal power in the US is...yeah when nearly all the costs are socialized (yet the profits are privitized...) it is easy to appear affordable. Furthermore it is one thing for taxpayers to subsidize the extraction of coal if the coal is used to generate "cheap" power in the US, quite another thing if the coal is used to generate "cheap" power in China....which is increasingly where our coal is going.
While Arch, Ambre, and Peabody hope to reap sizableprofits in overseas markets, the US public would unfairlyshoulder much of the financial burden. The economics ofthese export proposals rest, in part, on a massive publicsubsidy delivered through the US Department of Interior’scoal-leasing program that charges the companies apittance for a valuable resource. Coal companies are givencheap access to taxpayer-owned coal, and allowed tostrip mine it from public lands, through auctions run bythe Bureau of Land Management (BLM). The BLM allowscompanies to propose and set the terms of the lease tomaximise their profits. As a result, only three federal coalauctions in the past 20 years have had more than onebidder. Knowing there won’t be competition, companiesare free to enter the lowest possible bid for this coal. In2012, the BLM gave Peabody access to 721 million tonsof taxpayer-owned coal for $1.10 a ton.The Institute for Energy Economics and Financial Analysis(IEEFA) estimates that the federal BLM’s undervaluingof Powder River Basin coal has amounted to a publicsubsidy of $28.9bn to the coal industry since 1980,on the backs of US taxpayers.