Hypocrisy Rules the Editorial Page at Wall Street Journal on Federal Support for Energy

November 1, 2012 | 3:32 pm
David Friedman
Former contributor

While Johnson Controls is working to be a part of the solution to our nation’s oil problems by expanding their investments in battery technology, the Wall Street Journal’s editorial page hit them for getting federal help. This is a hypocritical attack from a paper that ran editorials in March 2012 and February 2011** pushing contorted arguments in attempts to justify federal support for oil companies, support that’s been rolling in for nearly a century. But given the Journal’s history of misleading on important issues, I guess I should not be surprised.

Massive federal support for well established, highly profitable oil companies is a waste

A study by DBL Investors shows the oil and gas industry has enjoyed massive subsidies for nearly a century, and we’ve got today’s high and volatile gasoline prices, pollution, oil spills, and myriad other problems to show for it.

A study by DBL Investors found that from 1918 through 2009, the oil and gas industries received an average of $4.9 billion per year in U.S. government support. That’s $450 billion handed over to the oil and gas companies with today’s high and volatile gasoline prices, pollution, oil spills, and myriad other problems to show for it.

Given what we did not know about the impacts of carbon emissions on our global climate at the time and the benefits oil did provide, it made sense for the federal government to help get the oil industry in gear a century ago. But that time is long past. Oil companies are making massive profits from selling oil, and with prices where they’ve been for the last five years, they don’t need any added incentive to drill for more.

Federal support for clean tech is essential to get out of the “valley of death”

Instead, doesn’t it make sense for the U.S. to help companies that are investing in battery technologies that will save us billions on gas, create jobs, protect our health, reduce global warming emissions, and help us cut our projected oil use in half in 20 years?

Of course it does.

But, the Journal, Koch Industries, and others are now arguing that we should simply end all energy subsidies. Don’t let this new position shock you. It is easy to call for an end to all energy subsidies when your industry has enjoyed them for almost a century and your competition is still in the proverbial technology “valley of death.”

That’s where technologies with immense promise, but large research and capital requirements, are often left to wither—exactly from where electric vehicle technologies, like batteries and fuel cells, are trying to emerge with the help of federal investments.

Maintain the U.S. as a global technology leader

Batteries, fuel cells, and other clean technologies are essential to build a strong economic future based on lower costs and cleaner air while maintaining the U.S. as a global technology leader for the 21st century.

If we don’t invest to get these promising technologies out of the valley of death, China is more than happy to take yet another energy-saving U.S. technology and sell it back to us for a profit while the Journal keeps us distracted using the challenges of building a clean energy industry as a political cudgel. Instead of the Journal continuing to be part of the problem, it should try to be part of the solution.

So, keep an eye out on the Wall Street Journal’s op-ed pages and write them a letter when their hypocrisy on federal support for energy rears its head again.


** WSJ Links not available at time of posting, used Google cached versions instead.

Image source: Page 7, DBL investors report, “What Would Jefferson Do? The Historical Role of Federal Subsidies in Shaping America’s Energy Future”