EC To Be Sustainable, Green Energy Must Generate Adequate Taxable Revenue

  1. The total quantity of energy must be rising, at least as rapidly as population.
  2. The types of energy available must match the needs of current energy-producing devices, or there needs to be some type of transition plan to facilitate this transition.
  3. There must be enough “net energy” left over, both (a) to fund governments with taxes and (b) to fund any transition to different energy-consuming devices, if such a transition is required.

Thus, in order for a transition to Green Energy to really work, it must be extremely profitable on a pretax, unsubsidized basis, so that it can pay high taxes. The greater the need for a transition to different energy consuming devices, such as heat pumps for buildings and electric vehicles of many types, the greater the need for more net energy generated by Green Energy sources to help facilitate this transition.

High profitability for energy products is normally associated with a very low cost of energy production. Furthermore, the type of Green Energy available needs to be in a very useful form. In a sense, there are really two different energy transitions required:

  • The output of intermittent electricity devices must be brought up to grid standards, using a combination such as many long distance transmission, very substantial battery backup, and the use of many devices to provide the electricity with the precise characteristics it needs.
  • As mentioned above, if greater use of electricity is to be made, a transition to electric devices is required.

Both of these transitions will require significant quantity of energy (really net energy not used elsewhere in the system) to accomplish. If fossil fuel energy is being phased out, an increasing share of this net energy will need to come from the Green Energy sector by way of the tax system. Such as system will only work if the Green Energy sector is very profitable on a pre-tax basis.

[7] Figure 8 suggests that the world has a problem with low energy consumption per capita right now.

Figure 8. Energy consumption per capita for all energy source combined based on data from BP’s Statistical Review of Energy 2021.

There is a strong correlation between growth in total energy consumption per capita and how well the economy is doing. The slight downward slide in energy consumption per capita in 2019 indicates that the economy was already doing poorly in 2019. The huge downward shift in 2020 dwarfs the downward slide in 2009. My earlier research, looking back 200 years, indicates that low growth in energy consumption per capita is likely to lead to conflict among nations and collapses of governments. Epidemics are also more likely to spread in such periods, because greater wage and wealth disparity tends to occur when energy supplies are constrained.

Any shift away from fossil fuel energy to Green Energy will almost certainly mean a huge drop in world energy consumption per capita because the world doesn’t produce very much Green Energy. Such a drop in energy consumption per capita will be a huge problem, in itself. If the Green Energy sector doesn’t generate much taxable income without subsidies, this adds an additional difficulty.

[8] Conclusion: Examination of the EROEIs for various fuels, using calculations the way that they are performed today, gives inadequate information regarding whether a transition to another set of fuels is feasible.

Researchers need to be looking more at (a) the total quantity of energy produced and (b) the profitability of producing this energy. An economy is only possible because of profitable businesses, including energy businesses. A person cannot assume that energy prices will rise from today’s level because of scarcity. Today’s huge debt bubble is producing very high copper and steel prices, but it is not producing correspondingly high oil prices.

Heavily subsidized energy products look like they might be helpful, but there is little reason to believe this to be the case. If Green Energy products are truly producing net energy, we should expect this fact to be reflected in the unsubsidized profits that these products generate. In fact, if Green Energy products are truly producing large amounts of net energy, they should be so profitable that businesses will be rapidly ramping up their production, even without subsidies or mandates.

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