DAVID BLACKMON: Biden Is Spreading Around Green Subsidies Like A Vegas Gambler
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DAVID BLACKMON IS AN ENERGY WRITER AND CONSULTANT BASED IN TEXAS. HE SPENT 40 YEARS IN THE OIL AND GAS BUSINESS, WHERE HE SPECIALIZED IN PUBLIC POLICY AND COMMUNICATIONS.
July 12, 2023
10:27 AM ET
A pair of stories published this week help document a rising phenomenon on the U.S. energy landscape: Hundreds of speculative, potentially non-economic projects being pursued solely due to the existence of billions of debt-funded dollars in energy-related subsidies. In all, last year’s Inflation Reduction Act (IRA) and 2021’s infrastructure law contained over $600 billion in such subsidies designed to spur investment in new, speculative technologies and expand the scaling of more proven ones.
Reuters reported on one such project Monday, a new low-carbon ammonia manufacturing facility being built in Texas by Dutch company OCI with an initial investment of $1 billion. OCI bills the plant as the first in the world that will capture and store 95% of the emissions created from the making of the ammonia, which is mostly used to make nitrogen-based fertilizers that help feed the world, a noble goal. Company CEO Ahmed El-Hoshi also freely admits that this plant would not move forward were it not for the allure of the IRA subsidies. (RELATED: DAVID BLACKMON: A Backlash Against Net-Zero Policies Is Finally Beginning To Take Shape)
Two aspects of this billion-dollar investment show the risk at hand. First is the fact that OCI’s subsidy grab is breaking ground without having first identified a single ready customer for the ammonia the plant will produce, mainly because the cost for this specific ammonia would be far higher than other available feedstocks. Second is the admitted fact that the economics for the project depend on the assumption that governments in countries like Japan and South Korea will enact additional subsidies designed to help potential customers absorb the higher prices.
https://dailycaller.com/2023/07/12/opinion-biden-is-spreading-around-green-subsidies-like-a-vegas-gambler-david-blackmon/
