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Energy Subsidies and the “Free Market”

Time and time again, I hear people say that renewables should be subject to the “free market” and should not receive government subsidies. After all, if renewables such as solar, wind and geothermal are viable, the consumer should decide, not the government. And while I understand (and even to a point agree) with those comments, the problem is we simply don’t have a level playing field. Nor do we have (or will we ever have) a truly free market economy. As Wikipedia says, “purely free markets… are theoretical constructs.” So after a recent spate of posts on a couple of threads on my Facebook page, I thought I would address some of the issues that came up.

PURPOSE OF SUBSIDIES
I think the purpose of subsidies is to get fledgling industries off the ground so they can be viable. Call it investment capital, call it what you want, that’s how our culture works. Entrepreneurs have an idea and get investors and/or tax breaks for a period of time so they can build a good foundation and become productive. There is often a huge amount of research and development costs associated with a start-up company. And I’ll be the first to say I’m not an economist. But I will go on to say this isn’t rocket science, either.

The chart I’ve included with this post is based on a 2009 report by the Environmental Law Institute report titled “Estimating U. S. Government Subsidies to Energy Sources: 2002-2008.” The source of the information in the report comes from the Internal Revenue Service, the US Department of Energy, the Congressional Joint Committee on Taxation and the US Department of Agriculture. The report covers the 6-year cumulative period of 2002-2008.

It’s a telling chart because it shows just how disproportionate the playing field really is. 72% of Federal subsidies for energy go to fossil fuels, not renewables. And if you group biofuel in with the fossil fuels (I do; biofuel is stupid), it’s more like 88%. The report goes into a great amount of detail regarding how the subsidies are parsed out.

Historically, a large amount of the subsidies for fossil fuel goes to coal. You know, the same people who brought you mountaintop removal. And black lung disease (and those suffering from it also are subsidized). Oil companies also receive a huge amount of subsidies for off-shore drilling costs, foreign exploration credits and the like.

But I guess my point here is that oil and coal have received subsidies for decades and at least the oil companies, who realistically hold a monopoly over us, are still seeing record profits. It seems subsidies should help companies get established, then phase out, not add on to profits. And the argument that we need to look at how much tax the oil companies pay would be valid if they weren’t paying tax on money we give them. Would you be willing to pay $300 tax on my gift of $1,000 to you? I sure would.

ON AGAIN/OFF AGAIN
In the 1980s, there were some pretty substantial tax credits (yes, subsidies) for solar. During that time, my parents installed a solar hot water system on their house. It’s still plugging along, churning out hot water. Then the Federal credits expired in 2000, 2002, 2004 and almost in 2008. They’ve currently been renewed through 2016.

But in my home state of Oregon, with one of the most aggressive tax credit programs around, the Legislature may look at eliminating them.

It’s this on again/off again situation that never allows any renewable energy company to ever really get off the ground. Why can’t we commit to a consistent subsidy for renewables over 20 or 25 years? It’s that see-saw effect, much like Roland Martin said in his blog about gasoline prices posted here a while back. And it essentially is strangling any hope of renewable energy ever coming close to competing with Big Oil.

LOOK PAST OUR NOSE
It’s the short-sighted view we have, where we don’t look past our nose to the future. We have these spurts of knee-jerk reactions when things get “bad” then fall into complacency when it evens out temporarily.

We can’t keep living like that. If we evened out the subsidies and shifted $30 billion of the oil subsidies to renewables, it would help. I believe even with fossil fuels’ head start, that shift alone, if continued consistently for 20 years, would make renewables viable and an integral part of our culture. And it would go a long way toward leveling that playing field.

Is anyone willing to give it a try?

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Roland S. Martin – CNN Guest Blog

I have never posted verbatim another blog post until today. With the recent events in Libya, gas prices soaring (again) and the nuclear meltdown in Japan, I was going to write something, because I just couldn’t keep quiet. Then, I came across Roland Martin’s post on CNN today (March 12, 2011) and decided he said it better than I ever could. So, I contacted him and obtained permission to repost it here. It’s well worth the read but it would be even important if we actually paid attention to what he says.

CNN Editor’s note: Roland Martin is a syndicated columnist and author of “The First: President Barack Obama’s Road to the White House.” He is a commentator for TV One Cable network and host/managing editor of its Sunday morning news show, “Washington Watch with Roland Martin.”

(CNN) — Gas prices are skyrocketing nationwide and Americans are angry that they have to spend more of their hard earned money at the pump each week.

The crisis in northern Africa, specifically in Libya, has led the dramatic rise in the cost of oil, which now tops $101 a barrel, over the past month. And with summer approaching, Americans are fretting over whether to hit the highway for vacation because the price of gas, averaging $3.52 a gallon nationwide, is expected to go even higher.

Our political leaders? Some Democrats and Republicans are leaning on President Barack Obama to open the Strategic Petroleum Reserve and use some of the millions of barrels of oil we have on tap to provide some relief as a result of the price increase.

In a news conference Friday, President Obama said he’ll release the oil if needed.

“All options are on the table when it comes to any supply disruption,” he said.

Is this Groundhog Day or what?

Three years ago this nation went through convulsions when gas prices skyrocketed. Folks were sharing rides and pushing elected officials to broaden public transportation plans. Hybrids and electric cars started getting a second look from gas conscious drivers, and all the talk was about alternative energy and not being dependent on Arab leaders in the Middle East.

And when those gas prices went back down? We yelled, screamed and cheered, and then pulled the SUVs out of the garage, filled them up with gasoline and forgot all about the pain we endured.

This is the American story: Alleviate our pain so we can go back to business as usual. And when the crisis comes back, we’ll fret, scream and go bonkers.
Please, stop the madness!

When are we simply going to reach the conclusion that as long as this nation has a Charlie Sheen-like addiction to gas, our chains can be yanked at any time, which will send our economy into a tailspin?

The U.S. Energy Department predicts that with the dramatic rise in gas prices, the average American family will spend an additional $700 annually on gas. And with money already tight, that is a huge hit.

Unfortunately, our crack-like dependence on oil continues to lead us down the road of agony and despair, and our political leaders have no courage to own up to the special interests and gas lovin’ Americans and say, “Dammit, enough! We can’t move forward like this!”

Democrats and Republicans are now saying President Obama needs to allow for more drilling off the shores of the United States. Really? So that’s the only answer? Everyone knows there isn’t enough oil to satisfy America’s thirst. But oh no, we keep this charade up.

America will never be able to transition our system from an oil-dependent economy to an alternative plan unless we show the courage to make the tough choices today and get the payoff later.

I don’t care what Minnesota Republican Rep. Michele Bachmann says about energy efficient lightbulbs; the old ones were cheaper, used more energy and we had to buy a lot more. The government’s move to force a new lightbulb standard caused some pain on the front end with my wallet, but over the long term, fewer bulbs are being bought and I’m seeing a decrease in my light bill.

Until the nation accepts this reality, we will continue to be at the mercy of oil-possessing countries.

Embracing non-oil energy alternatives — wind, natural gas, electric and solar — can absolutely create jobs in this country, and we should require Americans to make their homes more energy efficient with products built by Americans. What’s wrong with that? How can the United States create solar technology and then allow the Chinese to become the leading manufacturer of wind turbines and solar panels?

No one alternative energy source can replace oil. It has to be a comprehensive plan that addresses our long-term needs. And it is going to mean we will have to spend money. Yes, we will be affected in the short-term, but if someone told me we could spend $500 billion today, and that would create millions of jobs over the next several years and lead to a transition to an alternative-energy economy, I would ask where I should sign up.

But if we have no courage, we will lose every time.

So, if the only thing you know is “drill, baby, drill,” and that gasoline is our only option, great. Have a wonderful time. And every time gas skyrockets, just smack yourself upside the head with that gas pump, because you’re the reason we remain stuck on stupid when it comes to energy in this country.

The opinions expressed in this commentary are solely those of Roland Martin.

But we here at thesimpleHOUSE share these opinions, too.

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The Lawrence Street House – Bidding and LEED

I know it’s been a little while since I gave you all an update on the Lawrence House. With the holidays, I took a bit longer finishing the drawings and we really didn’t want to have to be doing open houses during the Thanksgiving and Christmas season. Open Houses are actually kind of a pain. Clean the house, keep it spotless, etc. for a two to three hour window on a Sunday afternoon. So we rested that for a while.

BIDDING
I also got the drawings done and ready to go out to bid. Based on my original budget, we had our present house priced at where we needed to be for a little negotiation and be able to go straight across. Part of the triple bottom line (the three “E’s” of sustainability) is economy and we didn’t want to end up with a mortgage when it’s all said and done.

But I’ve been getting preliminary bids back and they are actually coming in under my original budget (which, frankly, was pretty generous). So now we’re starting to get pretty excited. This may actually happen! We’re also currently at 5kw for the solar and are considering 6kw. We have room on the roof and believe it’s the right thing to do.

LEED
We had our first official LEED preliminary rating meeting Friday. This is where we sat down with Eli, our LEED rater, our landscape architect and our mechanical contractor. We’ve already done the design charrette and this is to make sure the major players understand the ground rules for LEED and also what we expect. Third party verification requires some stringent guidelines and we want to do it right from from the beginning. We should easily make Platinum on each house.

We discussed the mechanical systems and how they needed to be designed and installed. The way we are insulating our house, we are foaming the tops of the roof rafters so the heat pump indoor units and the ductwork will be within the conditioned space. That way we don’t have to insulate the ducts and it also makes the system run much more efficiently. We’ll still seal the ducts (the major area of mechanical system inefficiencies) and everything will be ceiling-fed.

We’re thinking the cottage will use a mini-split unit, or ductless heat pump. This is much more efficient, especially in a 776 sq ft house. The main house will have a conventional heat pump, but just a very high efficiency one.

Our landscaping is all low irrigation demand. We discussed at length eco lawn versus regular turf versus synthetic turf. We have just about 3% lawn area, but LEED, to maximize the points, doesn’t allow irrigation or mowing, otherwise you lose those two points. I’ve said all along we won’t chase points, but this is an area we want to be sure we do it right and also have something we will enjoy. An eco lawn in the location we have this might not be what we want. Our landscape architect suggested a synthetic lawn (I know, my first thought is “Astro-Turf“). We are going to go look at one here in town, but I’m skeptical about it. The term “Fake Lawn” is what comes off my lips. I’ll keep you posted.

SUMMARY
So that’s where we’re at. I’m hopeful we’ll have the bids come in well and we can get this house sold and start building. The prime building season in Eugene (March – September) is fast approaching.

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The Lawrence Street House – Refinements Pt 2

We have refined the exterior as well as the floor plan and are now very happy with every aspect of the design. Click here for a larger image of the south elevation.

We’ve added arbors over the south windows at the living room and over Brenda’s potting bench area off the garage. The front porch is reminiscent of the Craftsman Bungalow houses from the early 1900s. We want to blend in with the rest of the neighborhood. We also want to capture the front porch concept that is missing in our culture. More on that later; this is something stirring deeply in us.
I’m also meeting in a couple of days with our LEED Rater to get started on our LEED certification. And, I’m now starting on the design for the Secondary Dwelling Unit that will be located along 15th by the alley. More as that progresses, too.
We’re getting more and more excited about our new home!
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The Lawrence Street House – Design Development

>Well, the charrette spurred some creative juices, as I mentioned. I’ve spent the last few days refining some things and developing the plan a little further. Refining it a little more. Tweaking it. Making it better.

The last sketch was an exterior idea, very rough. I’ve refined it a bit more and put a little color to it. Amazing what the 3D modeling, sketch paper, a little PhotoShop and some time will produce.
We’re actually, day by day, getting more stoked about our new house. The way it is coming together, the refinements and the minor changes that lead to continual improvements, is amazing.
I mentioned in an earlier post about how well this sort of design process works. It is proving to be true… again.
Our thoughts on the exterior are grey shingle siding above a golden stucco base. That may change when we get down to the final design, but is what we’re going with for now. I’ve also made a few changes to the interior plan — main bath, utility core and den. I’ll post those soon.
I think we’re getting close to jumping into working drawings and details. Just a little more refinement and we should be there.
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The Lawrence Street House – Plumbing

One way to save energy is through a compact plumbing design. One of our goals as we laid out the design was to keep the plumbing — especially the hot water runs — as short as possible.

I shared that goal with a friend in the design community who said we wouldn’t be able to do it. And I’ll have to admit, this was one area where we had some struggles.
It wasn’t that easy. We could group the bathrooms and the utility room, but the kitchen sink seemed to be the sticking point. And, we had thought about a sink in the garage for clean up when working out in the yard.
Well, after many iterations of the layout, we came up with the design you see above. I think we’ll be able to get all hot water plumbing runs within 20 feet of pipe from the water heater. This will reduce pipe heat loss and also reduce water use because we won’t be waiting and waiting and waiting for the hot water to hit the faucet or shower head. Plus, we have grouped the major hot water uses, the washer, shower and tub all very close to the water heater.
Couple that all with low flow faucets and shower heads and you can see why this will save energy and water. So about the sink in the garage… You’ll notice there isn’t one. By designing the layout so we can come into the utility room from the garage, we can use the sink in there. Plus, if we need to remove dirty clothes, we have a private place to do that without tracking dirt throughout the house.
We’ve saved the cost of a sink (and the associated plumbing), doubled up on use (utility room doubles as a clothes changing area) and kept the plan even more compact. We took a similar design track in the kitchen for my espresso maker and bar sink: no bar sink. We grouped the espresso maker location close to the main sink and I’ll simply use that one. Again, we saved a sink.
And, by the way, we’ve been appreciating your comments about the design. We are compiling them and will respond as we go through some of these details. For Sue, on connecting the master bath to the utility room, we thought about that; but our lifestyle is such that it isn’t a major thing for us and the clean clothes. We do have the double-rolling hamper from the utility to the master bath (It’s between the ironing board and the utility sink).
Bryan commented about the master sinks on the exterior wall and the venting, etc. In response to Bryan, with our exterior wall system (I’ll go into more detail later), we will actually be building two 2×4 walls with a 1″ space, then foaming it all with insulation. This keeps all the plumbing on the warm side, completely seals it with insulation and still keeps the sinks close to the hot water heater. I plan on running the vent up the interior wall by the shower.
This is one area where we kept the dual sinks. Brenda and I “need” two sinks… 🙂
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The Lawrence Street House – Schematic Pt 2

As we started the design, we looked at our relationships of rooms to each other (from our notebook), the aspects of the rooms we wanted (the den needed to also double as a guest bedroom) and the relationships of all of this to the outdoor living areas of our lot and our relationship to the neighborhood.

You really can’t initially take just one thing and focus on that. Good design needs to be comprehensive. We’re going for LEED certification (targeting Platinum again!) and even LEED recognizes this. I think I’ve mentioned before in this blog (or my other blog): everything is connected. And that applies to the design, too. How and where we place the kitchen affects the rest of the house and affects how I barbecue in the summer months. The shape of the house plan affects the rooflines, which affects the ability to install solar panels. The location and shape of the garage affects the location and shape of the rest of the house. Where the basic “mass” of the house sits affects whether or not our patios get good sun (important to us) or are constantly in the shade (not good in Oregon).
We start pen on paper, freehand, rough and only generally to scale. This first part is more organizational. What rooms are generally where and how the overall flow and circulation might work.
The lot is narrow (60 feet) and, with the interior yard setback (5 feet) and the street setback (10 feet), we only have 45 feet to work with. The one aspect of our design I will focus on today is the garage and its relationship to the house and its shape. As has been the case for many years, our mindset is a 2- or 3-car garage. That’s been our culture. We, obviously, aren’t thinking a 3-car garage here, but we have settled out that even with our walking and bike riding, we want space for 2 cars.
In the normal mode of thinking (which we’re trying to change), that’s at a minimum 20 by 20 foot box. And with only a 45 foot wide building area, that can dominate the design. So how to get around that? Even with our alley access, that size box fills up our yard area. So do we want yard or garage? Can we have both?
This calls for thinking outside the box (pun intended). Appropriate, since the garage is usually a box. So we thought, could our lifestyle accept an end-to-end arrangement for the garage? Then the “box” is more like 12 feet by 40 feet (and that sets up visual issues we’ll address later), we have a smaller garage door, which lessens the auto impact, even though it’s facing the alley, and seems like it will fit our lifestyle.
The picture above is our first iteration (north is up — north is always up). The house basically is at the southwest corner of the lot, garage along the north and accessory dwelling unit at the southeast. This leaves a nice south and east facing area for patios. This gives us a more “square” arrangement for the heated part of the house (more energy and material efficient) and a much nicer yard area. The rooflines seem like they will work well this way, so we’re going to develop this a little further.
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The Lawrence Street House – Site Analysis

I know this wasn’t a one word title; sorry. Before we start designing (and the excitement of getting started builds, so there’s still that temptation. Resist!), we take a really good look at the site. We call this our site analysis. Yeah, not very creative, but accurate.

We look at a number of things. The topography of the land (it’s mostly flat, with a depression where the previous house was), the immediately surrounding features: neighboring houses, the big overgrown apple tree, power lines, utilities, and the gravel alley to name a few. How the house would relate to the surrounding neighborhood.
As I’ve mentioned, we live in a society of garage door openers and not knowing our neighbors. Our lot is unique since it’s on 15th. I talked in an earlier post how 15th is also a major bike street. In fact, we’ve noticed there is probably more bike traffic on 15th than cars. We like that. There are also more pedestrians along 15th than many suburban streets. We like that, too.
So we’re filing away the desire to not turn our backs on the street. We are going to be faced with wanting an outdoor living area for our home that has some privacy, but doesn’t turn our back on the rest of the neighborhood. We have this philosophy that our entire society would be just a little better if we related to our neighbors a little more. For us, it’s that spiritual aspect of “loving your neighbor”.
We also have a relatively non-descript four-plex to the west, across Lawrence, some nicer houses across 15th to the south and a still-vacant lot across the alley to the east. Uly’s Tamale Cart parks right along 15th (we’d like to meet Uly: anyone know him?). We want to downplay the garage, so we will be taking access to the garage off the alley. We absolutely want to take advantage of solar (patio, photovoltaic and hot water). Since we’re on the corner, we’d kind of like it if our front door related to the corner. And we have the ability to increase density on our urban lot by building what’s called an accessory dwelling unit (ADU).
ADUs are a secondary house on the same lot that could be a place for elderly parents to live or a rental house. An ADU can be no larger than 800 square feet and we want to take advantage of that for a several reasons: our lot is large (9,000 sq ft) and this is a better use of land, we’ll have a place for elderly parents if needed, and if not, we’ll have the ability for rental income as we head into retirement.
You can see it’s important to think through and evaluate these things BEFORE you start designing. It saves changes (or mistakes) later.
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Twenty for Twenty – Episode Nine

I’ve been an advocate for solar since my college days at the University of Oregon. And, the name of our firm, “Arbor South” came from our commitment to solar from the beginning. So you can imagine this episode is one of my favorite aspects of our home.