Mid American/Wind Farms/Madison County

Interesting story. Would like to see a history of the reat…

https://www.forbes.com/sites/robertbryce/2022/03/25/update-o…

–s

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“I will do anything that is basically covered by the law to reduce Berkshire’s tax rate,” Buffet told an audience in Omaha, Nebraska recently. “For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”

https://www.usnews.com/opinion/blogs/nancy-pfotenhauer/2014/…

So, is Buffett saying that even if an activity is not economically feasible, we will still employ human, energy and material resources in its production as long as it is both legal and sufficiently subsidized by the government? This sort of activity just makes all of us, in aggregate, poorer.

I would prefer that we expend our resources to create true economic value for Berkshire’s stockholders, employees, customers and communities in ways that do not come at the expense of another interested group such as US taxpayers.

Full disclosure: I have not and am not a fan of the world’s rush to renewable energy – a process which ignores so many of the problems and challenges of its own doing. I do not just single out Berkshire.

I wonder if the day may come, maybe after I am dead, that we will reflect on this period in the green revolution, judge it by today’s and tomorrow’s science, and ask: Just what were we thinking anyway?

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I wonder if the day may come, maybe after I am dead, that we will reflect on this period in the green revolution, judge it by today’s and tomorrow’s science, and ask: Just what were we thinking anyway?

I don’t know, rather the future generation will look back at us with gratitude and say we are standing on the shoulders of the giants, today’s technological advancement is possible because of those years.

Remember when Tesla started with EV, everyone doubted, it is not for mass production, yada, yada, to many companies are planning to phase out ICE. Same with solar, people questioned it, now we are getting to a point it is economically viable and environmentally preferable.

Separately, remember Berkshire serves many constituents especially the electric utilities. There is a section that wants these renewable energy.

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The live well and continually better from government tech spending while mandating we must all hate government is continually enlightening for me.

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So, is Buffett saying that even if an activity is not economically feasible, we will still employ human, energy and material resources in its production as long as it is both legal and sufficiently subsidized by the government? This sort of activity just makes all of us, in aggregate, poorer.

I like Warren, but he is not God.

Let’s go ask Europeans how they like being yoked to an extraction economy that happens to be based in Russia, even if the energy is a little cheaper. I expect you will find many of their attitudes changing about how they get their energy, and a clearer example of the difference between “price” and “value” I can’t think of.

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Assuming “energy” is infinite? Not me.

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Energy could become unlimited in the foreseeable future indeed: https://www.bbc.com/news/science-environment-60312633

That’s why the government should incentivize renewable energy market and R&D that may not make sense economically now, but will in the future.

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Energy could become unlimited in the foreseeable future indeed: https://www.bbc.com/news/science-environment-60312633

Unfortunately the “Major breakthrough in nuclear fusion” headline is as old as (human) nuclear fusion. There is a joke about nuclear fusion among physicists (I might remember it a little wrong):

“Nuclear fusion is always just 10 years away”

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While we’re at it, let’s poll oil-burning Americans (present company included) to see how they feel about seeing oil prices spike 67% IN A MONTH in the winter season due to “market forces”. It’s complete cow excrement to posit the idea that the war or supply issues or whatever has constrained supply or oil availability by 67% - it’s a completely rapacious, speculation-driven market system that destroys real people’s finances.

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It’s complete cow excrement to posit the idea that the war or supply issues or whatever has constrained supply or oil availability by 67% - it’s a completely rapacious, speculation-driven market system that destroys real people’s finances.

When demand and supply are so well balanced a change in either will do lot more damage in price.

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Futures markets would be dramatically less volatile if they were confined to producers and end user’s alone. The problem with capitalism is lack of rational oversight and extreme rent seeking by those that own ,well, most everything.

The pendulum is due to swing back soon, or the U.S. will be filled with gated enclaves and helicopters for the chosen few will be in high demand.

JK

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I wonder if the day may come, maybe after I am dead, that we will reflect on this period in the green revolution, judge it by today’s and tomorrow’s science, and ask: Just what were we thinking anyway?

It is more likely that someday we will reflect on our use of gas and oil and how we burn a million years worth of sequestered carbon every 365 days and ask “What we were thinking, anyway?”

I am not surprised by the use of energy; since the first cave dwellers learned to build a fire to warm themselves, humans have had an insatiable thirst for energy in any form. England denuded its forests burning trees, whale oil began to run out as we nearly extincted whales.

renewable energy – a process which ignores so many of the problems and challenges of its own doing

Fireplaces, steam power, coal power, even hydro weren’t very good at first. Heck, they’re still not perfect 200 years later. The internal combustion engine has an efficiency of 35% on a good day, an electric motor, better than 90%. Nuclear has never lived up to its promise, and even with brief resurgences is still lacking (https://discussion.fool.com/running-away-from-nuclear-is-emotion…)

I wonder why renewables are supposed to be perfect out of the gate, when nothing else has been? PS: The price of sunshine has not changed in the past month. Or year. Or ever, really.

Anybody want to stack up the subsidies that petro or nuclear get against those of renewables? The adding machine would laugh you out of the office.

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“I will do anything that is basically covered by the law to reduce Berkshire’s tax rate,” Buffet told an audience in Omaha, Nebraska recently. “For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”
That’s an interesting 2014 quote, and wind turbine technology has developed a lot since then. I believe that since something like 2018/2019 wind (& increasingly solar) are cheaper than even natural gas, at least according to articles like the following …

https://arstechnica.com/science/2019/08/wind-power-prices-no…
https://arstechnica.com/science/2021/10/the-decreasing-cost-…

An note: Natural gas pricing is up a lot since even 2021 and even more since 2019, so there’s no reason to believe the gap hasn’t continued to widen even given construction cost increases.

And so it’s hard to believe that the reporter of the current article didn’t have some sort of bias in using a 2014 quote in a 2022 context for such a rapidly changing industry.

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When people complain about subsidies for renewables, they seldom mention the largest subsidy for oil and gas; military incursions around the world. Let’s at least be honest when comparing subsidies and the real costs of energy ‘extraction.’

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Anybody want to stack up the subsidies that petro or nuclear get against those of renewables? The adding machine would laugh you out of the office.

I would be pleased if you could lay out the subsidies on oil and gas. I keep hearing about them, but can’t seem to find any of them when I pay my taxes on my working interest in a few wells.

First, since I have working interest, not royalty, I pay Social Security self employment tax (at twice the rate of a salary). Then I pay federal income tax, state income tax and county severance tax. Finally, there is a tax credit for domestically produced products, until the final line “deduct amount from oil or gas production”

Meanwhile, I can get a big deduction for fancy lithium batteries in my camper van if they are just occasionally charged by a solar panel.

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I would be pleased if you could lay out the subsidies on oil and gas. I keep hearing about them, but can’t seem to find any of them when I pay my taxes on my working interest in a few wells.

I’d include a couple hundred billion/year in military spending and “foreign aid” to deeply unpleasant regimes with oil, as well as the occasional multi-trillion dollar invasion, under “subsidies” albeit not ones labelled that way in the budget.

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When people complain about subsidies for renewables, they seldom mention the largest subsidy for oil and gas; military incursions around the world. Let’s at least be honest when comparing subsidies and the real costs of energy ‘extraction.’

Let’s be honest about who that benefits: a few multi-national companies. Our domestic production, as well as our renewable industries would do better if we did not support cheap foreign energy sources. The USA now a net exporter of energy, and we don’t need to offer free defense to the Saudi Arabias of the world.

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I’d include a couple hundred billion/year in military spending and “foreign aid” to deeply unpleasant regimes with oil, as well as the occasional multi-trillion dollar invasion

You don’t really have to include those to come up with a big number.
You get to about half a trillion a year in direct subsidies with just production tax credits and direct product price subsidies.
Different people come up with different numbers, but that’s the general range.

At the extreme upper end, the IMF estimate of oil and gas “support” globally is 5.9 trillion, or 7% of GGP.
But that includes a lot of indirect stuff, like the cost of the pollution and global warming.
Of course, just because it’s indirect and isn’t a “subsidy” doesn’t mean it isn’t happening.
Still Not Getting Energy Prices Right: A Global and Country Update of Fossil Fuel Subsidies. IMF Working Paper WP/21/236

Jim

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While we’re at it, let’s poll oil-burning Americans (present company included) to see how they feel about seeing oil prices spike 67% IN A MONTH in the winter season due to “market forces”. It’s complete cow excrement to posit the idea that the war or supply issues or whatever has constrained supply or oil availability by 67%

Can you provide a link to the economics class that teaches the price of a commodity will only go up 67% when the supply is cut by 67%?

Note: see https://www.investopedia.com/terms/p/priceelasticity.asp

Mike

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Some of these responses also miss the huge global advantage the US would have if it could both a) meet it’s domestic energy demand with renewable sources and b) export its oil/gas/coal to countries it needs to wean away from adversaries.

The power to tell Russia we don’t want it’s oil was a boss move, but being able to tell Europe we’ll meet their energy needs with our surplus would put us way over the top. What would it take to develop a similar power militarily? $20 billion in spending? $200 billion in spending? trillions? We’re at the point where everyone’s too apprehensive to strike at countries that have nukes, so there might not actually BE a military level of spending that can come close to the power we could wield economically.

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