Elon Musk is no stranger to facing seemingly insurmountable challenges these days. set the sights About reducing the “astonishing amount of wasted taxpayer money” involved in federal government operations.
When Musk offered to lead the yet-to-be-created Department of Government Efficiency during Trump’s second term, he embraced the novel idea of combating existing bureaucracies through the creation of new ones. Getting Leviathan Washington to change its ways is a tall order, even for someone of Mr. Musk’s extraordinary brilliance, but the government’s rush toward bankruptcy cannot be ignored. Waste is everywhere. And when money is distributed carelessly in the world, nepotism inevitably arises. (Related: Gavin Wax: Trump’s tariffs will make America great again)
That’s why it was just released Reported by The involvement of the Texas Public Policy Foundation (TPPF) in the large sums of money tied up in federal energy subsidies is well worth considering for those who want to keep the government a little more sane.
The U.S. tax code has been rich in subsidies, tax credits, carve-outs, and other perks for the politically advantaged for as long as anyone can remember. But the energy sector is a relative newcomer to government hoarding, and got off to a modest start. date with Carter administration.
Initially, special treatments were applied to corn-derived ethanol, synthetic fuel, along with wind and solar power. This was done in the name of freeing the US energy sector from dependence on the chronically unstable oil-rich Middle East. However, with the arrival of the shale revolution in the late 2000s through hydraulic fracturing (fracking) and horizontal drilling, the United States became one of the world’s leading producers of oil and natural gas under the Trump administration.
However, energy subsidies have not disappeared. In fact, under the Biden-Harris administration, that number has increased exponentially, this time in the name of combating the “climate crisis.” of TPPF surveyThe never-ending siren song: Federal energy subsidies and support from 2010 to 2023, by Brent Bennett, concludes that subsidies to promote decarbonization are misallocating resources and distorting energy markets. are.
“Over the past 14 years, wind, solar, nuclear, and fossil fuels have all received significant government subsidies ranging from $20 billion to $80 billion,” the TPPF study notes. “Wind and solar each generate more than twice as much revenue as oil and gas, but more importantly, they rely on federal subsidies for a much larger portion of their revenue. wind power is 48 times more subsidized than oil and gas, and solar power is 168 times more subsidized.”
The types of subsidies flowing to wind and solar on the one hand, and fossil fuels and nuclear power on the other, are markedly different. “Subsidies for wind and solar power are primarily focused on installing power generation equipment using current technology, rather than developing new technology,” the study notes. “Conversely, most energy subsidies for nuclear and fossil fuels are focused on specific aspects of research and exploration and development.” As TPPF points out, wind and fossil fuels account for a large share of total U.S. energy production. Under the Anti-Inflation Act of 2022, subsidies for wind and solar are set to increase significantly in the coming years, even though solar only accounts for 3.5 percent and 2 percent, respectively.
Despite the “energy transition” being costly to taxpayers and not benefiting families and businesses who need affordable and reliable energy, the TPPF He warns against excessive expectations that it will disappear soon. “The growing size and lobbying power of the wind and solar industry, along with the constant drumbeat of the environmental lobby to build more wind and solar power and reduce carbon emissions, will push to eliminate subsidies. It has become a powerful force against any attempt,” the study said.
“Rather than correcting the supposed deficiencies of the energy market, energy subsidies exacerbate further deficiencies by fostering industries and quasi-industries that depend on government support for their survival and profitability. This allows for the creation of further defects,” concluded TPPF’s Bennett. “Like all forms of cronyism, energy subsidies benefit politically connected companies at the expense of taxpayers who don’t see the impact enough to demand change. We need voters and the companies that pay the subsidies to pressure lawmakers to repeal these harmful policies.”
Elon Musk’s pursuit of government waste in the new Trump administration may start by calling for an end to the energy subsidies and regulatory policies that have contributed so much to his wealth. One of the companies he founded, EV maker Tesla, is cashing in regulatory credits it buys from Tesla when other car companies fail to meet California’s EV quotas or the EPA’s tailpipe emissions standards. There is.
For car companies that produce both EVs and gasoline-powered cars, it’s cheaper to buy regulatory credits from Tesla than to produce a lot of EVs at a loss. Musk may also seek to repeal the Inflation Control Act’s $7,500 tax credit for each EV, as reported by the Wall Street Journal. calculate the amount Last quarter, Tesla’s revenue reached approximately $1.25 billion.
The ball will soon be in Elon’s court.
Dr. Bonner Russell-Cohen is a Senior Policy Analyst at the Committee for a Constructive Tomorrow (CFACT).
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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