Spread the Wealth: Geothermal Also Deserves Tax Subsidies

Energy pioneer George Mitchell recently died. Many news reports I saw about it called him the “father of fracking,” or some similar moniker. He was, no doubt, a giant in the fields of oil and natural gas exploration. At 94, he had definitely distinguished himself and deserved some well-earned rest from a busy life.

As I read more about his story, though, I found an interesting asterisk to his success: the depth of public support involved in helping hydraulic fracturing grow into a viable method for making “unconventional” shale plays more conventional. This website lays out several stories that offer a detailed history of the overlap between government support for new gas technology and the businesses trying to leverage that technology to make money. Many drillers might click through and think, “What? Aren’t these guys at the Breakthrough Institute namby-pamby environmentalists?” Yes, and no. Breakthrough’s founders, Ted Nordhaus and Michael Shellenberger, wrote The Death of Environmentalism back in 2004. If you haven’t read it, the crib-note version is: The “green” movement failed, and the best way to approach climate change is not through regulation, but through government support of cleaner energy sources.

So, yes, they start from the premise that climate change is real, an idea many still doubt. But their end goal is investment in non-carbon technologies to make them, over time, competitive with relatively cheap carbon technology. More government subsidies, less cap and trade. To that end, yes, the Breakthrough Institute has a vested interest in showing how much government invested in fracturing, if only to show contrast. But that doesn’t make it untrue.

Many of my readers likely remember the 1970s. Energy shortages and lines at the gas pump helped define that decade in the national conscience here in the United States. In response, we had initiatives like the Eastern Gas Shales project, a partnership between the U.S. Geological Survey and the Petroleum Information Corporation. It gathered data on Appalachian basin shale on a massive scale—5,800 wells. This and other tools paid for by tax dollars eventually helped the George Mitchells of the world become the George Mitchells of the world.

Many drillers might be skeptical of government intervention in anything. Their most direct experiences with government are likely regulations and taxes. Both are costly, often confusing or conflicting, and generally a bummer to deal with. I get it.

But I don’t think reflexive opposition to government involvement is helpful or practical for drillers or anyone else. Government isn’t just some faceless bureaucrat sitting at a desk somewhere thinking of ways to make us pay more taxes. Government is us.

Oil and gas get and have gotten lots of support from the government. Solar may not be the best best, and critics often point to the Solyndra boondoggle. But what about geothermal, which directly creates jobs for drillers? As I wrote in this space recently, the first enhanced geothermal system in the U.S. hooked up to the grid earlier this year. That, too, had lots of help from the government.

Cleaner energy isn't all all bad. Neither is government help. Critics often say government shouldn’t be in the business of picking winners and losers. But it is, and always has been. When the Romans built the aqueducts, I’m sure there were businessmen who bought very nice countryside villas on the taxpayers’ coin. Investments, of course, shouldn’t come without oversight. But, along with oil and gas, it couldn’t hurt to expand federal support for other energy sources—like geothermal—that can keep drilling contractors in work.

Stay safe out there, drillers.