As a writer, there are moments when someone else articulates an idea so well that rewriting it in my own words would be unnecessary. A recent op-ed in The Hill did exactly that, clearly laying out the energy challenges facing the United States:

The U.S. electricity sector is a slow-moving maze of regulations, shaped by decade-long transmission approvals, time-intensive interconnection studies for new generators and large new customers, and overlapping layers of state, regional and federal bureaucracy. . . . The regulatory thicket surrounding the electricity industry was tolerable when the pace of change was slow. However, with the rise of AI and renewed growth from manufacturing and electrification, we can no longer endure a sclerotic grid.

In addition to reforming our rigid, reluctant-to-adapt grid, there are questions about whether average ratepayers should be on the hook for increased electricity demand being driven by a few large customers.

In the midst of all of these concerns, there is a U.S. Senate bill that could help fix the problem: S.3585 – DATA Act of 2026. The bill was recently referred to the Senate Committee on Energy and Natural Resources.

I have written about consumer-regulated electricity (CRE) for Missouri, which would reduce the number of state-level regulations that off-grid CRE utilities (CREUs) would face. (You can click here if you’re interested in what a CRE policy might look like in practice.) However, even if it were allowed in Missouri, there would still be many federal-level regulations that would diminish the benefits of the new practice.

That is where the DATA Act becomes so vital. The act would exempt certain new CREUs from specific federal regulations that apply to the broader grid. If our state and federal governments approve CRE, there would be a pathway for large electricity users like data centers and aluminum plants to more quickly generate their own electricity without impacting the rates of average Missourians. That would be a win for all of us.

All of this suggests that the DATA Act of 2026 is something to watch in Washington, D.C. But Missouri should not wait until the federal government makes its move. We should be proactive and allow CREs in our state, creating a pathway to address modern energy challenges that would become even more viable if federal reforms under the DATA Act follow.

The post Keep an Eye on the DATA Act in Washington, D.C. appeared first on Show-Me Institute.

While no site has yet been selected for a TerraPower reactor, lessons from Wyoming and recent federal reforms offer clues about what might come next. As I have written before, the federal government has put extensive emphasis on converting retired coal plants into advanced nuclear reactors. These conversions, according to the U.S. Department of Energy, can save up to 35% on construction costs and retain much of the existing workforce. In Wyoming, TerraPower is currently building a reactor on a former coal site, and it would not be a surprise to see Kansas follow suit. This model could highlight a potential path forward for nuclear adoption in the historically coal-dominant Missouri.

Federal Reform and Cost Savings for Coal-to-Nuclear Transitions

The concept of coal-to-nuclear has drawn bipartisan attention in Washington, D.C., and has been codified in the recent ADVANCE Act, which directs the Nuclear Regulatory Commission to develop and implement strategies to enable more efficient licensing reviews for converting former coal plants and other former industry infrastructure into nuclear reactor sites.

A report prepared by experts at the Idaho, Oak Ridge, and Argonne National Laboratories found that these projects can achieve significant savings by repurposing existing infrastructure, such as steam-cycle components, since both nuclear and coal are thermal power plants that rely on generating steam to turn a turbine.

Missouri’s Long History with Coal and Transitioning Our Workforce

Coal has long been king in Missouri. Despite recent closures, Missouri remains the fourth most reliant state on coal, with coal supplying 57% of electricity generation in 2024. That legacy presents both a challenge and an opportunity.

Missouri has several coal plant sites that could be strong candidates for advanced nuclear conversion. A study from Oak Ridge National Laboratory identified three Missouri coal power plant sites (retired or slated for retirement between 2020 and 2040) as suitable for hosting a number of reactors.

Not only is there an opportunity to make use of our physical infrastructure, but Missouri can also use our existing workforce. The U.S. Department of Energy notes that many coal-plant and nuclear-plant jobs share identical or similar occupation codes, meaning a large portion of the existing workforce could transition with minimal retraining.

A Nuclear Advisory Council Could Help Identify Steps for Missouri

Another way to better identify potential nuclear sites is by creating a nuclear advisory council. If Missouri brought together the best and brightest minds in nuclear energy to discuss our unique opportunities, analyze trends in federal regulation, and address our state’s weaknesses, the Show-Me State could become a significant player in nuclear development.

Kansas is moving along in its process. Let’s hope the Show-Me State doesn’t let this same opportunity pass it by.

Interested in Nuclear Energy in Missouri?

Read my recent report, Connecting Nuclear Energy’s Past and Present: Guiding Missouri’s Future, here.

The post Considering Coal-to-Nuclear Transitions in Missouri appeared first on Show-Me Institute.

Click here to read the full report.

The post Connecting Nuclear Energy’s Past and Present: Guiding Missouri’s Future appeared first on Show-Me Institute.

Click here to read the full report.

The post Connecting Nuclear Energy’s Past and Present: Guiding Missouri’s Future appeared first on Show-Me Institute.

Recently, the White House unveiled its detailed framework for deploying nuclear energy, which emphasized the need for nuclear power in America’s future. This plan included an ambitious target to triple U.S. nuclear capacity by 2050. While this specific plan may not survive the transition, the sentiment is likely to endure.

Bipartisan Support for Nuclear

Both sides of the aisle recognize the potential in an American nuclear resurgence, albeit with different motivations. Part of the reason the Biden administration supports nuclear energy is because of climate change. Ambitious emissions goals are difficult to achieve without nuclear energy. The previously mentioned report argues:

Expanding domestic nuclear energy production has a key role to play in helping to avoid the worst impacts of climate change by enabling the nation to achieve a net-zero greenhouse gas emission economy no later than 2050. Nuclear power delivers safe, clean, reliable, and affordable electricity.

The Trump administration’s support hinges largely on reliability, capacity, and energy security. Members of the first Trump administration have advocated for keeping plants open, investing in SMRs (small modular nuclear reactors), and continuing to modernize the Nuclear Regulatory Commission. The president-elect recently affirmed this stance:

Starting on day one, I will approve new drilling, new pipelines, new refineries, new power plants, new reactors and we will slash the red tape. We will get the job done. We will create more electricity, also for these new industries that can only function with massive electricity.

Outside of the Oval Office, another notable example of nuclear momentum is the passage of the ADVANCE Act, which is designed to spur advanced nuclear construction and streamline regulations. This bill flew through Congress with an 88–2 vote in the Senate and a 393–13 vote in the House of Representatives before being signed by the president.

Bipartisan Action in Missouri

Nuclear energy is unique in that it is safe, powerful, and environmentally friendly. It is the most reliable energy source, and some claim it produces the lowest amount of greenhouse gas emissions over the lifecycle of the power plant. Public awareness of these benefits is increasing, as Bisconti Research found that favorability for nuclear energy increased from 49 percent in 1983 to 77 percent in 2024 among the U.S. public.

In the past, nuclear energy may have been viewed through a partisan lens, but today, it represents a solution to address some of our nation’s key concerns. This upcoming legislative session, lawmakers in Jefferson City should come together to craft meaningful policy that will help bring more nuclear power to the Show-Me State.

The post Nuclear Energy Is a Bipartisan Solution appeared first on Show-Me Institute.

You can read my past thoughts on the bill here and here.

Here is a summary of the policy changes in the ADVANCE Act:

1. Narrows which regulatory costs nuclear energy licensees have to pay (read more here).
2. Establishes an award program for pioneers in the advanced nuclear industry.
3. Streamlines the process to convert “covered sites” (land formerly used for coal plants, factories, etc.,) into nuclear reactor sites.
4. Mandates the Nuclear Regulatory Commission (NRC) to expedite the “combined license” process for applicants building at a site where a nuclear plant currently operates or has previously operated.
5. Seeks to increase manpower at the Nuclear Regulatory Commission (NRC).
6. Updates the mission statement of the NRC to be more supportive of nuclear energy.

While the federal government got something done, Missouri missed an opportunity this past session to repeal its own burdensome anti-nuclear regulations. One particular letdown was the failure to revise the construction-works-in-progress (CWIP) law. You can read specifics on that policy here.

In 2022, Ameren Missouri (the state’s primary utility) relied on coal for 66 percent of its electricity generation. By 2045, Ameren plans to bring that number to zero. Missouri could mimic Wyoming and turn one of these soon to be “covered” sites into an advanced nuclear reactor site. The ADVANCE Act, if signed, will expedite this process in the future—just in time for our energy transition.

Additionally, there have past efforts to add another unit to the Callaway Nuclear plant, Missouri’s one and only commercial nuclear reactor. The ADVANCE Act would allow “combined licenses” mentioned above, which would make more units at the Callaway Plant eligible for a faster review.

Isn’t it time to pass nuclear reform in Missouri? The federal government has made its move—now it’s Missouri’s turn to repeal anti-nuclear regulations such as the CWIP law and perhaps form a Missouri Nuclear Energy Advisory Council (similar to Tennessee’s). Missouri leaders ought to ensure nothing stands in the way of strengthening our grid with clean, reliable, and powerful nuclear energy.

The post Congress Moves to Advance Nuclear Energy appeared first on Show-Me Institute.

The United States is known for its diversity: from our landscapes, to our immigrants, and to the different states across the nation—the United States truly has a wide range of interests, individuals, and industries. Our energy sources are no different, and as shown below, we use a diverse assortment of energy sources to power our nation.

Created with mapchart.net; Source: Nuclear Energy Institute (NEI)

In order to better understand energy policy for Missouri, it is important to know some background about each energy source.

Natural Gas

According to 2022 preliminary data from the U.S. Energy Information Administration (EIA), natural gas generated 39.8 percent of electricity in the United States—the largest generator in our country. Natural gas is a fossil fuel, meaning it is formed from decomposing plants and animals. Companies use seismic surveys to determine where to drill for natural gas, similar to the process used for oil. The captured natural gas is then processed, and a chemical called Mercaptan is added. Mercaptan adds the smell that makes natural gas smell like rotten eggs so leaks can be detected. This now smelly natural gas is then used for combustion turbines or steam turbines to generate electricity. In recent times, combined-cycle natural gas plants have greatly increased efficiency by using both processes together. Natural gas is burned to power combustion turbines, and the heat byproduct from the combustion turbine (think of how a car engine releases heat) is used to heat water, create steam, and turn a steam turbine.

Coal

At 19.5 percent of electricity generation, coal is the second-largest energy source in the United States. Once used primarily to power locomotives and heat homes, coal is now mostly used to generate electricity by heating water to turn steam turbines. Coal, like natural gas, emerged as an electricity generator in the 1950s and grew quickly in the 1970s and 80s. However, coal emits much higher emissions than natural gas, and thus its usage is shrinking in modern times as natural gas continues to capture more market share.

Hydroelectric

Speaking of old energy sources, hydroelectric (or hydropower) is one of the oldest forms of electricity generation—with 1880 marking its first year of industrial use. President Franklin D. Roosevelt was a big proponent of hydropower, which uses moving water to spin turbines. By 1940, it generated 40 percent of our nation’s electricity. However, in 2022, it only generated 6.3 percent. American hydropower has largely fallen out of favor due to safety and environmental regulations, legal obligations to Native American tribes, and the economic costs associated with them. For example, two hydroelectric dams on the Elwha River came under attack due to environmental and legal concerns over the salmon population. The owners would have been forced to add expensive fish ladders, and continued legal pressure from the tribes persisted until they decided the dam was not worth the cost.

Nuclear Energy

Making up 18.2 percent of electricity generation, nuclear is the largest clean energy source in the United States. The first commercial reactor was built in Shippingport, Pennsylvania in 1958, and the nuclear industry grew rapidly in the 1970s, 80s, and 90s. With nuclear fission, uranium atoms are split, which causes a chain-reaction and generates an immense amount of heat—which boils water and creates steam that turns a turbine. As time has passed, stringent regulations have slowed down the construction of nuclear power plants; the average age of a reactor for the remaining 93 reactors in the United States is 42 years old. Currently, the industry is regaining momentum as it transitions from large plants built during the Cold War to safer and cheaper small-modular reactors.

Wind

Wind energy makes up 10.2 percent of electricity generation. The mechanics of wind energy are relatively straightforward. The cycle of wind is used to turn turbines which generate electricity without creating greenhouse gas. In the olden days, windmills were used to cut wood, pump water, and grind grain—but now wind turbines are used to generate electricity. Financial incentives and requirements to use renewable energy in the 1990s spurred the development of wind power, with similar incentives continuing today. These wind turbines can also be located offshore in the ocean—such as ones taller than the Statue of Liberty in Rhode Island.

Solar

Enough energy from the sun hits the planet every hour to power the entire world for a year. Comprising 3.4 percent of our electricity generation, solar energy is a relatively small source of energy in the United States. Solar energy can be harnessed in two ways—through solar thermal or solar photovoltaic. Solar thermal technology is like the hot metal slide on the playground that would make you pay for foolishly venturing down it during recess. The sun heats up metal, which heats water—creating steam and turning a turbine. Solar photovoltaic is what most people think of when they think of solar energy—panels made up of a great number of cells turned towards the sun and capturing light energy to charge up like a battery. America’s largest solar photovoltaic farm is the Solar Star Farm in California.

Petroleum

Oil is typically used in transportation, but it can also be used in electricity generation—although it makes up only a tiny 0.9 percent of generation in the United States. The process to create electricity from petroleum is similar to the process for natural gas, as it can be used in steam, combustion engines, or in a combined-cycle power plant.

Biomass

Biomass is a fancy term for burning wood or using biofuels created with corn, soybeans, etc., to turn turbines. Although it is a large U.S. export commodity, our nation only relies on biomass energy for 1.3 percent of electricity generation. Developments are in the works for converting municipal solid waste (paper, shirts, furniture), animal manure, and human sewage into electricity sources.

Geothermal

Accounting for only 0.4 percent of electricity generation, geothermal is the smallest energy source in our nation. Since the earth has an inner core, outer core, mantle, and crust (where we live), heat from pressure and magma in the outer core and mantle produce heat that we can harness for electricity. Wells are drilled into the earth’s surface (some going 2 miles deep) and the heat is used to boil water and turn a steam turbine.

Now that we have a foundation on all of America’s top energy sources, we can further explore how energy is produced and transmitted and consider what would be the best energy policies for our nation and Missouri.

The post Show-Me Energy: Today’s Energy Sources appeared first on Show-Me Institute.

Advanced nuclear reactors are pre-fabricated (constructed off-site, which allows them to maintain the efficiency of a production line), so when reactor designs are approved, the same design can be used in numerous projects. By contrast, traditional reactors are typically custom-designed on-site. Private entities have been competing to develop the best reactor designs. However, many of these private entities struggle to acquire the necessary cash to propose a potential reactor design to the Nuclear Regulatory Commission (NRC). NRC agents currently charge a billing rate of $290 per hour, with a review taking upwards of 18,000 hours, resulting in a typical review cost of $5,220,000! These costs place private developers in a difficult situation, as spending an immense amount of money on designing a reactor and paying regulators (who might reject the design) is a great risk. For example, Oklo Power (an American startup) submitted an application for a 1.5 MW microreactor, and had it denied after 22 months of review from the NRC.

The ADVANCE Act would shift responsibility for supervisory and nonsupervisory support costs, travel costs, training costs, and the administrative costs of  different government offices that provide logistical support to the NRC. These costs currently fall on the nuclear developer. In the current state of the bill, the federal government would compensate the NRC for these additional costs in connection with advanced nuclear reactors. Taxpayers should of course be wary of any proposal to subsidize private nuclear power providers, but in this case the money would be going to defray the expenses incurred by our government as the result of a truly burdensome set of federal regulations.

The ADVANCE Act could also expedite the conversion of brownfield sites (land formerly used for industry), particularly former (or closing) fossil fuel facility sites, into nuclear power sites. Pre-fabricated reactors are adaptable and well-suited to these sites; on the other hand, traditional nuclear plants need to be uniquely constructed to match the terrain where they will be located.

Lastly, the ADVANCE Act would provide additional funding (mainly to facilitate a new nuclear traineeship program) to the NRC in order to speed up the review process. In this industry, time truly is money, and costs soar when delays occur.

So the ADVANCE Act would make it easier to build out our nuclear capabilities. Why is that important? Increased nuclear power would help achieve three key goals: increasing power supply in the United States, increasing our country’s energy independence, and increasing the supply of reliable, emissions-free energy.

As a state-based think tank, we don’t often discuss bills in Congress. But if nuclear energy is going to make a resurgence in our country, reform at the federal level will be necessary. Whether the federal government passes this law or not, Missouri could capitalize on the bipartisan desire for clean, reliable nuclear energy and become a leader in the industry.

The post Oppenheimer Is Not the Only Interesting Thing in Nuclear this Summer appeared first on Show-Me Institute.

The study grades each state from A through F on several factors relating to electricity market design and competition. On most of the important criteria in the study, Missouri gets few of the answers right. For example, while some Missouri utilities do participate in wholesale electricity markets, where grid operators select the lowest-cost electricity to meet demand, in no part of Missouri do customers get to choose their electric service from among competing providers. Moreover, monopoly utilities are not required to submit requests for proposals to find the lowest-cost new generation portfolio. Monopolies utilities can simply build the generation portfolio themselves, potentially at higher cost. This lack of a competitive market means that hardly any power plants in Missouri are owned and operated by non-monopoly utilities.

Not having a competitive market comes with its costs, and lately Missourians have been paying the price. For instance, customers of states that allow them to choose from competing retail electric service providers have seen their prices decrease 17 percent since 2008, whereas the average Missourian has seen his prices increase 17 percent during the same time period. Additionally, flexibility in choosing electric service providers appeals to businesses, as they can negotiate their own contracts and pursue their own electric generation goals.

If lawmakers want to reverse rising electricity prices in our state and create a more competitive and business-friendly environment, they don’t have to look far. Illinois received the second-highest grade in this study and has competitively structured electricity markets. As a result, its prices have decreased 13 percent since 2008. Based on these facts, shouldn’t lawmakers consider allowing greater competition in Missouri’s electricity markets?

The post Missouri Gets a D Grade in Electric Competition appeared first on Show-Me Institute.

A groundbreaking new study by the Lawrence Berkley National Laboratory found that wind power plants significantly reduced their output once their eligibility for federal subsidies expired. Wind energy is subsidized through the Production Tax Credit (PTC), which reimburses wind power plants between $15 and $24 for each megawatt hour generated over a period of ten years once the plant is operational.

The study examined pre-2008 “old” plants that have operated during and after their PTC eligibility, as well as post-2008 “new” plants that do not have post-PTC data available yet. The study found that production dropped roughly 10 percent in the years after PTC reimbursements ended, and 13 percent overall after 17 years.

The authors note that this coincidental timing

suggests that maintenance and operating strategies change when projects lose access to the sizable tax benefits afforded by the PTC…After the window of PTC eligibility has passed, operating profitability declines and, therefore, so does the operational rigor.

Overall, the study found

clear evidence that operators are carefully adjusting behavior based on the PTC status to maximize profitability, which provides an additional level of plausibility to the idea that operators would also change maintenance regimes based on the PTC status.

This study adds to the growing evidence that wind plants are quite reliant on subsidies. The federal Energy Information Administration forecasts that new wind plants will face a steep drop in construction after PTC eligibility expires in 2020. While the tax credits will continue for ten years for plants that are deemed eligible before PTC expires, new plants won’t be eligible after 2020.

Show-Me Institute analysts have often written about how subsidies affect markets in any industry, and energy production is no different. Markets should not be designed so that companies chase after subsidies and change their behavior to maximize handouts. Energy subsidies distort markets, alter industry behavior, and rack up large taxpayer bills.

More wind power plants are being built in Missouri to qualify for the PTC before eligibility ends in 2020. Given the perverse effects of wind power subsidies, Congress should not extend the PTC as it has several times before and Missouri should not consider a state-level replacement once PTC eligibility expires.

Tax revenue will be hard enough to come by in the coming years. It should not be given away to prop up favored private industries.

The post It’s All About the Tax Credits, Baby appeared first on Show-Me Institute.

Wind and solar power received the most subsidies in absolute terms, receiving $37 and $34 billion, respectively. When broken down by subsidies relative to the amount of electricity produced, the results are staggering.

The report concluded that wind and solar producers received nearly as much money from subsidies as they did from selling their electricity on wholesale markets.

The report does not provide state-level data, but Missouri is no stranger to these subsidies. While not having much solar power, Missouri has several wind plants. In addition to the Lost Creek wind farm that received $107 million in subsidies from the 2009 federal stimulus bill, numerous wind plants are recipients of the federal Production Tax Credit (PTC), which is the biggest provider of wind energy subsidies in the nation.

The PTC reimburses wind power producers between $15 and $24 per megawatt hour of electricity generated over a period of ten years. The PTC has been extended several times since its inception in 1992. However, it is being phased out and is set to expire at the end of 2020, although IRS rules effectively stretch this to 2022.

The latest Missouri plans to claim more subsidies is a $1 billion taxpayer-funded wind power expansion by Ameren. Construction will begin in time to claim the last of the PTC, a consideration that Ameren noted helped speed up the construction schedule.

The Energy Information Administration, the data branch of the federal Department of Energy, has repeatedly predicted a near cessation of new wind plant construction once the PTC expires. As Warren Buffett, himself the owner of several wind farms, has said: “without the production tax credit” he wouldn’t build them. “They don’t make sense without the tax credit.”

As the PTC expires, we shouldn’t replace it with a state-level program. Missouri borders tornado alley—the nation’s best region for wind power—and it’s time for the wind industry to compete without subsidies and mandates.

The post New Report Highlights Excessive Energy Subsidies appeared first on Show-Me Institute.

A steep decline in oil demand due to the economy being paused and an increase in oil production from a price war between Russia and Saudi Arabia brought oil prices to a twenty-year low. Recently, 23 countries have agreed to reduce global oil production by around 10 percent, but global demand has dropped nearly 30 percent, leaving significant surplus oil in the market. As such, many American oil producers are on the brink of bankruptcy as low prices combined with loan repayment schedules jeopardize an industry vital to the economy and national security.

Extra storage space in America’s Strategic Petroleum Reserve (SPR) could help offset this oil market turbulence.

The SPR is a stockpile of oil that helps protect American oil supplies from shortages or price spikes. Its rainy-day function deters adversaries from using oil as a weapon against America and provides more leverage for American foreign policy. Occasionally, oil from the SPR is sold to raise money for the Department of Energy (DOE), emergencies, or public works programs, although the merits of using the SPR to fund public-works programs are debated.

So how could the SPR be used at this time?

The president suggested purchasing surplus oil to fill the SPR to the top as part of the recent stimulus. Opponents blocked this idea and will likely block a new bill to purchase oil for the SPR independent of a stimulus.

In light of these developments, the DOE is leasing empty space in the SPR for companies to store surplus oil until the market stabilizes. As Congress has decided to reduce the SPR’s size (another debated matter), this would use existing space while costing taxpayers nothing. Several companies have already submitted bids to store oil, with room for more. The world is scrambling to find enough space to store surplus oil, as too much production risks sending prices further into a tailspin.

The move to lease space in the SPR could benefit taxpayers and remove some oil from an oversaturated market.

The post Stimulus Package Highlights Missed Energy Opportunity appeared first on Show-Me Institute.

While fracking has changed the energy landscape in the United States, these changes have been for the better. Fracking has numerous benefits; it lowers energy prices which benefits consumers, it replaces coal with natural gas which lowers emissions and air pollution, and it increases energy production which strengthens America’s influence around the world. Despite the controversy, fracking is clearly a boon to the United States.

I address these matters in more detail in a recent op-ed posted at Real Clear Energy.

The post Banning Fracking? Oh Frack No! appeared first on Show-Me Institute.

Unfortunately for the ethanol industry, everything it claims it can do is already being accomplished by improved natural gas production, commonly called “shale gas,” in the United States. Increasing American energy output? Check. Reducing dependence on foreign oil? Check. Lowering energy costs for consumers? Check. Reducing CO2 emissions to improve our environment? Check. American energy output currently is the highest it has been for decades and our dependence on foreign oil is the lowest it has been for decades. We have shale gas extraction to thank for this, not biofuels such as ethanol that have long had political muscle but no market appeal.

Fortunately for consumers and taxpayers, these amazing changes to our energy industry are being accomplished with limited government involvement. The federal government is not even the primary regulator of natural gas, states are. Natural gas is subsidized to a lesser degree than many other types of energy, especially ethanol. According to the U.S. Energy Information Agency (EIA), in 2010, natural gas produced 80 percent of the non-electricity energy in the country, and received 21 percent of the subsidies. Biofuels, including ethanol, produced just 11 percent of the non-electricity energy in the country, but received a whopping 73 percent of the subsidies.

How has America benefitted from those huge subsidies ($6.64 billion in fiscal year 2010, the most of any type of energy)? Our largest “benefit” has been a major diversion of corn from food — where it was useful — to gas — where it is not. This has helped lead to increased food prices. Nice benefit – higher prices across the entire food chain, from eggs and bread to chicken and steak, and almost all dairy products, costing American consumers billions of dollars.

Most ethanol consumed in Missouri is a result of our state’s deplorable E10 mandate that all gasoline sold includes 10 percent ethanol. However, in some places, E85 gasoline is sold at gas stations as a consumer option. In those places, E85 competes with traditional gasoline on price and quality, like any product in a market economy should. E85 competition should be the model for the industry, not continued reliance upon federal and state mandates and subsidies. Regrettably, organizations such as the Coalition for E85 remain committed to government involvement as a staple of the industry.

Utlaut quotes a number of impressive-sounding totals for ethanol investment in Missouri. Whatever the totals are, they do not hide the fact that without government support, the industry would shrink dramatically – and almost certainly collapse. That may sound unfortunate, but is it really preferable to continue taking tax dollars from everyone else to prop it up? The simple fact is there is no sizable market demand for ethanol.

The growth of the ethanol industry in Missouri and the entire country is tied to government. We have a state mandate that ethanol be in our gasoline. We use state tax dollars to support its production. We have federal mandates that a certain amount of ethanol and other renewable fuels be sold (the RFS), whether people want it or not. We have all of these subsidies despite the fact that shale gas is already moving our energy industry forward and succeeding in ways ethanol can only dream (or lobby) about.

The Renewable Fuel Standard was unnecessary even before shale gas and other improvements rendered it meaningless. Once again, the free market is solving problems on its own. The ethanol industry is like your least favorite uncle at Christmas who borrows money from your parents to buy you a crummy gift you do not want or need and then expects you to fawn all over him. No thanks, we would just like our money back. The RFS needs to go.

David Stokes is a policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.

The post Ethanol Subsidies Should Be Eliminated appeared first on Show-Me Institute.

However, Ameren Missouri officials may have found a solution to the dilemma: the U.S. Department of Energy’s competitive federal cost-share investment funds. Ameren Missouri and Westinghouse Electric Company recently announced that they are seeking competitive federal cost-share investment funds from the Department of Energy, which would be used to manufacture Small Modular Nuclear Reactors. If Ameren receives the funds, Ameren would then expand the nuclear power plant in Callaway County without the need for reforms to Missouri’s CWIP law. This would help Missouri generate more alternative energy without unnecessary mandates. Making this deal even sweeter is the potential for the partnership between Ameren Missouri and Westinghouse Electric Company to create thousands of jobs for the engineering, manufacturing, and operation of the Small Modular Nuclear Reactors. Finally, because portions of the electricity produced in Missouri will be shared around the nation via the electric grid, some level of federal investment is legitimate here. It makes sense that Missouri customers will not pay every penny for something that benefits more than just Missouri.

This is an exciting project that has potentially great benefits for Missourians.

The post Ameren: A Boost For Nuclear Energy? appeared first on Show-Me Institute.

Together with the United States, Brazil produces nearly 88 percent of the world’s ethanol supply. However, Brazil uses sugar cane as a preferred alternative to corn in its ethanol production.

With an annual yield of nearly 370 million bushels of corn, many Missourians are deeply connected to the corn-based ethanol industry. If the industry were to dry up, thousands stand to suffer in the short run. Even so, could there be a sweeter alternative?

Well, quite literally, yes. The Brazilian sugar cane industry is said to be seven times more efficient than that of the United States, and less expensive, too — nearly 30 percent cheaper, in fact. Regardless, it appears that the federal government has little interest in the more viable Brazilian blend.

In order to offset a federal tax credit targeted to ethanol blending companies, the United States has levied a tariff on Brazil’s ethanol, perhaps as a way to keep the international market out while spurring on its own domestic product.

Current and past administrations have vowed to reduce foreign oil imports, claiming that we have become too dependent on them. So, why a virtual ban on Brazilian imports? If ethanol is federally promoted as a solution to the so-called national security issue of dependence on Middle Eastern oil, why wouldn’t cheap, clean-burning ethanol from friendly Brazil be satisfactory? If officials are serious in addressing this as a national security issue, they would invest in other forms of energy — namely, those which are not harmful to our country’s environment and well-being.

Thankfully, it appears that lawmakers might be making a move in a better direction. Last week, Sen. Tom Coburn (R-Okla.) fathered an amendment that would slash government subsidies of the corn industry while also lifting the tariff. Unfortunately, Coburn’s amendments may never become actual laws. Nonetheless, the Senate has shown an ever-increasing readiness to bring ethanol subsidies to the curb.

So, is investing in the precarious, ever-expanding corn-based ethanol industry worth the higher food prices, loss of necessary agricultural groundwater, and increased pollution that result? Well, some would argue that the aforementioned are a small price to pay to support an industry. I contend the contrary. Surrounding Missouri’s ethanol industry, we have corn farmers benefiting from subsidies, cattle farmers suffering from feed shortages, and mandates that often require we burn at least 10 percent less-fuel-efficient ethanol in our cars.

When subsidies are involved, benefits for some lead to costs for others. So, who’s right? You be the judge.

The post Do You Take Sugar With Your Ethanol? appeared first on Show-Me Institute.

Many have regarded ethanol to be the proverbial “fuel of the future,” claiming that it reduces the cost of gasoline at the pump while also emitting less pollution. Although ethanol can replace gasoline in some ways, it is less beneficial than many expect.

The Department of Energy began releasing data in 1997 determining that some of the benefits derived from ethanol don’t outweigh the costs, as researchers had previously believed. Ethanol may emit less pollution when burned in place of gasoline, but the Environmental Protection Agency reports that it releases carcinogens at far higher levels than they predicted when it’s created.

Despite the abundance of new testimonies and information, however, both the federal and state government continue to support ethanol ardently, as our country’s energy messiah.

Pointing to often-circulated claims of environmental friendliness and cost-effectiveness, Rep. John Shimkus from Illinois recently introduced new legislation that would impose further government mandates for the production of ethanol. Amid another distressing year for Detroit, this governmental decree would require that 50 percent of all new automobiles be capable of running on ethanol and other non-petroleum fuels by 2014. That number would stiffly rise to 95 percent just three years later.

So, do the advantages of ethanol outweigh the costs? The answer, simply, is no. Aside from its counterproductive environmental effects and proven efficiency loss for each mile to the gallon, ethanol is a precarious investment for the government to force on us for several reasons:

• First, it has been shown that increases in ethanol production are correlated with an increase in food prices. These effects can be felt not only statewide, but also nationally and internationally.
• Second, and as a direct result of government mandates, a cloud of pseudo–market demand now hangs heavily above the heartland. Simply put, the current supply/demand ratio did not arise naturally from the decisions of producers and consumers, interacting voluntarily in the market. Instead, the ethanol industry is artificially bolstered by government sanctions.
• Finally, both this mandate and others like it point to the essence of how government controls harm the economy. There are too many hands in the cookie jar, and, as a result, everyone’s hand gets stuck; the cookie crumbles. Automakers should not be burdened with absurd requirements such as this from legislators who seek to alter the free market for the sole benefit of their constituents, and at the expense of everyone else.

Don’t get me wrong, I support the development of renewable energies and green solutions. Markets reward efficiency. However, as both a Missouri resident and an owner of my father’s businesses, I find that legislation like our own E-10 mandate and the proposal advanced by Rep. Shimkus in Illinois are harmful — especially in the long run.

Neither supply nor demand would exist at anywhere near current levels without both federal and state mandates, both of which have propelled ethanol into the forefront of the American auto and oil industries. As it stands, the eagerly pushed supply of ethanol more than satisfies current market demand. And that, folks, is just basic economic principle.

The post New Ethanol Mandates From Washington appeared first on Show-Me Institute.

First, the bad news, which is really not all that bad — yet. The Environmental Protection Agency (EPA) approved increasing the amount of ethanol allowed in the standard blend of gas, from 10 percent to 15 percent. The important thing to note here is that the agency has allowed such an increase, not required it. There is really no argument against allowing the option for retailers who wish to undergo the expense in order to sell a higher blend, or to consumers who choose to buy that higher blend. So, as long as it remains an option rather than a rule, I see nothing wrong with the EPA’s decision.

The fear, of course, is that states like Missouri will subsequently require the higher blend for gas sold in the state. We currently have a ludicrous law that requires a 10-percent blend of ethanol in Missouri gas, whether we want it or not. If the state were to increase that requirement now, it would be a sick joke. I am tepidly optimistic that this won’t happen, because the higher blend is not recommended for most old cars.

I agree with this part of the article suggesting that, minus the requirement, most gas stations won’t choose to sell the higher blend, and we might not have much to worry about:

Critics said the decision could be a frustration to drivers and argued that many retailers will opt not to sell the higher blend because of the expense of adding new pumps and signs.

In places where there is enough demand, retailers will choose to sell it. Customers should also be informed enough to realize that the suddenly cheaper option at the pump might not be right for their cars. If everyone read this blog, they would already understand this.

On to the potentially more exciting news: getting rid of federal ethanol subsidies entirely! The main ethanol support programs are scheduled to expire at the end of the year, and Congress has yet to renew them. Abolishing these subsidies — or, more accurately, just letting them expire — would be the sole crowning achievement of the 111th Congress. Seriously, getting rid of those subsidies would be a victory for markets and freedom, and a loss to rent-seekers everywhere. The 111th Congress would deserve praise for letting them expire.

The post Ethanol Update on Recent Policy Decisions and Options appeared first on Show-Me Institute.

Coal miners have it pretty tough already, but I don’t think putting tens of thousands of them out of work is going to help them or their families much. I am also willing to bet that these exact same students would be leading the protests over higher tuition if Mizzou itself (somehow) suddenly went cold turkey on coal power and started using more expensive options. Finally, I’ll rescind these comments if I find out the protesting students were advocating that Mizzou should use nuclear power instead — but somehow I doubt that anything other than thousands of windmills and solar panels would satisfy them.

Thanks to Combest for the catch.

The post Mizzou Students March in Support of Poverty, Unemployment, and Extreme Energy Costs appeared first on Show-Me Institute.

“Any further delays will cause additional harm to the industry,” said Michael Frohlich, director of communications for the National Biodiesel Board. “(The expiration has) really been devastating. What you’ve seen is a complete drop in demand.”

Frolich essentially concedes here that the subsidy drives demand, implying that ethanol cannot, on its own, be a profitable endeavor. But the industry leaders interviewed in the article go on to argue that these subsidies will make the industry competitive in the future:

“(The tax credit) is crucial in order for (the biodiesel industry) to keep running,” said Brooks Hurst, a state director for the Missouri Soybean Association. “As we’re starting out, it’s critical to make us cost competitive with petroleum diesel.”

Soybean oil is a feedstock for the production of biodiesel.

If the tax credit were eliminated altogether, the industry would likely “cease production,” Mr. Hurst added.

“The biodiesel industry is an infant industry,” he said. “We’re trying to build demand.”

The nascent or infant industry argument is one used throughout history to protect emerging industries. It suggests that new industries need to be protected temporarily in order to gain the economies of scale that their competitors already enjoy. This is later expanded by Frolich, however, who says:

“Obviously, the long-term goal is for a multi-year (tax credit) extension.”

Ethanol needs the subsidy in order to be profitable, but subsidy proponents argue for more than just economic viability. Some claim that ethanol is better for the environment than standard gasoline, and suggest that it should be subsidized for that reason alone; however, there is a substantial body of research showing that this is not the case. A 2005 study in BioScience debunked that notion by looking at the effects of ethanol use in both Brazil and the United States, concluding that it did not bring net environmental gains. From the study’s conclusion (emphasis added):

The use of ethanol as a substitute for gasoline proved to be neither a sustainable nor an environmentally friendly option, considering ecological footprint values, and both net energy and CO₂ offset considerations seemed relatively unimportant compared to the ecological footprint. As revealed by the ecological footprint approach, the direct and indirect environmental impacts of growing, harvesting, and converting biomass to ethanol far exceed any value in developing this alternative resource on a large scale.
[…]
In the US case, the use of ethanol would require enormous areas of corn agriculture, and the accompanying environmental impacts outweigh its benefits. Ethanol cannot alleviate the United States’ dependence on petroleum.

Other studies have replicated these results, such as another piece from 2005, printed in the Renewable and Sustainable Energy Reviews. The authors reached a similar conclusion about E10, the ethanol mixture used for Missouri gasoline:

The study indicates that E10 is of debatable air pollution merit (and may in fact increase the production of photochemical smog); offers little advantage in terms of greenhouse gas emissions, energy efficiency or environmental sustainability; and will significantly increase both the risk and severity of soil and groundwater contamination.

A 2004 study published in Natural Resources Research concluded that ethanol creation uses more energy than the ethanol itself provides:

Specifically about 29% more energy is used to produce a gallon of ethanol than the energy in a gallon of ethanol. Fossil energy powers corn production and the fermentation/distillation processes. Increasing subsidized ethanol production will take more feed from livestock production, and is estimated to currently cost consumers an additional $1 billion per year. Ethanol production increases environmental degradation. Corn production causes more total soil erosion than any other crop. Also, corn production uses more insecticides, herbicides, and nitrogen fertilizers than any other crop. All these factors degrade the agricultural and natural environment and contribute to water pollution and air pollution.

Missouri is at a disadvantage because the state’s ethanol mandate requires at least 10 percent ethanol in the gasoline sold here. Show-Me Institute policy analysts David Stokes and Justin Hauke published a case study analyzing the effects of the mandate, concluding that it cost the taxpayers much more than it saved — the opposite of the cost-savings argument originally made in favor of the mandate. Requiring ethanol to be used in the state’s gasoline also discourages research toward better and more efficient forms of biofuel by propping up the corn ethanol industry.

The data shows that the ethanol mandate is expensive and does not help the environment. Ethanol may even harm the environment, by discouraging more efficient and environmentally solutions. That being the case, what justification is left to protect the ethanol industry with mandates and subsidies?

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