Both Democrats and Republicans, at todays Senate Energy and Natural Resources Committee hearing on the Department of Energy’s proposed $29.5 billion budget, expressed concern over increasing funding for the DOE’s renewable initiatives while simultaneously cutting its spending on fossil fuels. On a day in which the Wall Street Journal reported on Exxon Mobil’s struggles to find new sources of oil, it seems oddly out of touch for Senators to press Energy Secretary Chu for pushing renewable technologies over traditional fossil fuels.
Senator Murkowski, ranking member on the committee, pointed towards preferential treatment as a big problem in the new budget, “It seems to me that within the administration, you are picking those areas through the budget process that you would like to see advanced.” Murkowski’s comment makes it seem as if the Obama administration had in some way arbitrarily ‘chosen’ technologies, when in fact the choice was based on the simple facts of technology maturity and potential. As Secretary Chu stated, “there are mature technologies and there are technologies that need more help.”
Oil, natural gas, and coal are currently ‘mature technologies’, profitable and advantaged by years of government support. While these traditional fossil fuels still need further R&D to become cleaner, as Senator Bingaman noted, in a time of escalating deficit worries that must take back seat to the development of cheap and truly clean energy. Renewables face a number of hurdles to reaching commercial viability, in part due to comparatively large fossil fuel subsidies, and posses the potential for driving the American economy into the 21st century.
As peak oil looms ever closer, it seems silly to invest billions of dollars in researching and subsidizing an industry that has reached technological maturity and relies on diminishing resources. The Wall Street Journal reports:
“Exxon Mobil Corp., the world’s largest publicly traded oil company, is struggling to find more oil.
In its closely watched annual financial report released Tuesday, the company said that for every 100 barrels it has pumped out of the earth over the past decade, it has replaced only 95.
It’s a conundrum shared by most of the other large Western oil-producing companies, which are finding most accessible oil fields were tapped long ago, while promising new regions are proving technologically and politically challenging.”
Rather than investing in highly profitable industries, the new budget aims to shift government assistance to technologies with high potential for future growth and current competitive disadvantages. The strategy is based in reality, with a strong understanding of how past innovation occured and what the future holds for energy sources both dirty and clean.