Opinion: Daily Journal

Poll Pushes Renewable Energy Cronyism

A new poll reiterates previous findings that, when costs aren’t a factor, North Carolinians generally and widely favor renewable energy sources.

This is a consistent finding over the years. Polls on the left and right have found that North Carolinians favor more options in energy provision and that they favor more choice in electricity provision. Neither of these findings should surprise; you could substitute just about any consumer good instead of electricity and find the same.

People welcome competition, and they like a range of choices. They instinctively know competition lowers consumer prices. And they want to be the ones to choose.

You know it, I know it, and pollsters know it. So if they want a poll to push special government treatment of the renewable energy industry, they’ll use this fact about people to make it seem as if North Carolinians are suddenly clamoring for cronyism.

That is precisely what the poll by “Clean Energy Conservatives” attempts.

Do you love me? Check yes or no.

Of great interest to the renewable lobby is keeping the state’s renewable energy portfolio standards (REPS) mandate untouched. That mandate forces consumers to have to do more and more business with their renewable industry clients, involuntarily, through monopoly utilities.

This issue is featured in poll question 13. Here is how it is presented: “In 2007, the state legislature passed a law that requires public utilities to increase their use of renewable energy sources such as solar and wind to 12.5% of their energy mix by the year 2021. Would you say you support or oppose this policy?”

With so little information, they were able to poll strong support (74.8 percent).

Unlike with other questions, however, this portion of the poll tried to find what was the best way to convert people who said they opposed the legislation. Questions 14 through 17 tried various ways. Here are the ways:

Q14 asked “if you knew utility customers pay less than two dollars on their utility bill each month to pay for this requirement.” It still found 68.6 still opposed.

It didn’t ask what consumers think of hiking the monthly Demand Side Management/Energy Efficiency Rider by $1.95 (a 46 percent increase), from $4.26 to $6.21.

Q15 asked “if you knew that nearly 25,000 new jobs have been created [in] North Carolina with businesses developing, installing, and manufacturing clean energy technologies” (58.6 still opposed). Similarly, Q17 framed it in terms of “80 percent of the new energy projects going to rural regions” needing economic growth (49.7 still opposed).

The jobs question is weighted in two ways. One, it doesn’t mention that the legislation results in an estimated net job loss in North Carolina of nearly 3,600 jobs by 2021. How? REPS legislation favors the industry it favors; that favoritism creates costs everywhere else resulting in a net job loss.

Two, it doesn’t explain that renewable energy sources require far more workers per unit of energy generated than traditional energy sources. Being a lobby poll, it can’t. Because that means admitting the truth, that renewable energy sources are far less efficient than traditional energy sources.

That would then require admitting that renewable energy sources are inherently more costly to consumers than traditional energy sources. The renewable energy lobby cannot let people know that.

It can, however, make people think that, imagine, some day in a rainbow-draped flying unicorn future, renewable energy sources might be less costly than traditional energy sources.

One day soon. We promise. And the check’s been in the mail since the 1970s.

Q16 puts it “if you knew that these new technologies will likely lead to lower energy costs in the future.” And speaking of magic, they got more to switch (46.2 percent now support) than remain opposed (43.8 percent).

This question is basically a rationality test. It’s essentially asking consumers if they would prefer lower rates in the future and giving them the impression that REPS would be the cause if so. It’s no surprise more switched than didn’t, but those are rather big ifs.

The idea that renewable energy sources will “one day soon” be cost-competitive with traditional sources is an old, old wives’ tale — going back to the 1970s! — always used to justify keeping the forever-infant industry on public support.

Look for this angle to be the primary message in the coming year. A problem with that is, technological change works for every resource, not just renewable ones.

Technological change — in natural gas and oil — has been the single biggest game changer in energy costs in a generation.

This technological change is responsible for last year’s lowering of electricity rates in North Carolina. Sam Watson, general counsel for the state Utilities Commission, testified in January before the Joint Legislative Commission on Energy Policy that a decrease in fuel costs, mostly in natural gas, resulted in a $5.64 decrease in that average customer’s bill.

Guess which industry opposed those rates lowering? The renewable energy industry opposed cutting rates. Why? Because cutting rates would acknowledge the decrease in fuel costs, which would result in renewable energy companies getting less from the utilities in “avoided costs.”

And yes, the same poll that asked just two questions prior if people’s views changed on REPS if they paid less than $2 more on their utility bills doesn’t ask what they think about lowering traditional fuel costs, especially natural gas, saving them well over $5 on their utility bills.

Someone truly interested in North Carolinians’ opinions of electricity sources might find that something worth asking about. Someone wanting to push a lobby narrative, however …

So how does the poll handle natural gas? Funny story, that.

How to solve a problem like … natural gas?

The pollsters found a clever way to address the “problem” of natural gas: Don’t refer to it directly. They mention it in terms of process rather than source. So it’s “offshore drilling for oil or gas” (plurality support, 47.8 percent) or “drilling for natural gas through a process known as hydro-fracking” (majority opposed, 52.6 percent).

Previous polls have found support for natural gas development. That would be a problem here. So this poll put the focus on “drilling” and used the scary sounding term “hydro-fracking.” (Apparently “fracking” isn’t satisfactorily off-putting any more.)

Framing the discussion of natural gas that way would be like framing the discussion of solar this way: “collecting solar energy using caustic chemicals such as sodium hydroxide and hydrofluoric acid.”

They dare not tell the truth about hydraulic fracturing. They don’t explain that it is not used for drilling wells but merely to create fissures within the already drilled hole to get resources to flow.

They don’t mention that it has been used in over a million wells since 1947, safely.

Nor do they recite the study after study after study that has confirmed hydraulic fracturing is an intrinsically safe process.

Facts aside, politics to the fore. Hydraulic fracturing has a scary-sounding nickname, just like water (dihydrogen monoxide). That’s what the poll was banking on for its purposes.

For that matter, the poll avoids the fact that the increased use of natural gas is responsible for “significant reductions in the emissions of CO2, NOx, and SO2,” according to researchers at the National Oceanic and Atmospheric Administration. Or that the European Union considers natural gas a “green energy.” Let alone that a Brookings Institute study found solar power to be “by far the most expensive way of reducing carbon emissions” and that “wind is the next most expensive.” By contrast, natural gas does very well in reducing net carbon emissions.

Incidentally, Q12 gives people an option of supporting “looking for low-cost energy sources regardless of environmental impact” (emphasis added). It’s worded that way to suggest all low-cost sources have a negative environmental impact, which is clearly not true. Not to mention, it doesn’t take into account the many ecological impacts of highly land-intensive renewable energy facilities or the hazardous materials they require.

But this poll isn’t about a fair hearing of the issue; it’s about getting and keeping political favors for renewable energy. Government favoritism is the only way that the renewable energy industry is viable, and their lobby knows it.

Put the training wheels back on

One government favor they dearly miss is that 35 percent investment tax credit that the General Assembly finally stopped kicking forward and allowed to expire last year. Unfortunately, lawmakers didn’t let it expire quickly enough, and their delay could potentially cost the state nearly $1 billion in tax credits.

Here’s how the poll handles the issue. Q22: “Just last year, the state legislature allowed the renewable energy tax credit for solar, wind, and other renewables to expire. Do you support or oppose the state legislature re-establishing the renewable energy tax credit?” It got 72.1 percent in favor.

Nowhere does it give respondents any ideas of the huge scope of that tax credit, nor the projected cost to the state during the credit’s last year, let alone projecting those costs forward if it were to restart.

It certainly doesn’t tell respondents that the 35 percent investment tax credit was the last piece of state and federal giveaways that returned basically 100 percent of their investment in six years. Nor dare the poll tell them that solar investors received a 30 percent investment tax credit and 30 percent accelerated depreciation from the federal government, plus 5 percent accelerated depreciation from the state.

It’s quite evident why. They might do the math.

Conclusion

The poll needs to create the idea in legislators’ minds of a citizenry demanding cronyism for the renewable energy industry, restoring the massive investment tax credit, and keeping them subject to the expanding REPS mandate. But Q3 undercuts it all.

Q3 asks respondents what makes them “most angry about our elected government leaders in Raleigh and Washington.” Only 2.5 percent mentioned their “stand on energy.” They might as well have been asking people their favorite toaster manufacturer. They’ll get an answer, but not real passion.

It would be charitable not to point out that “stand on energy” could fall on either side of the renewables question. It would also be kind not to mention to pollsters that a relatively much larger proportion (6.4 percent) were offended by “dishonest[y].”

Jon Sanders (@jonpsanders) is director of regulatory studies at the John Locke Foundation.