What Really Drives Alternative Energy Funding?

1. What Really Drives Alternative Energy Funding? Andrew H. Harris, Maj, USAF

2. Setting the Stage • Oil is a finite resource and where America gets it makes a huge economic and strategic difference • Separating myths from reality: • Are Democrats really “greener”? • Is the government really responding to “global warming” with more alternative energy dollars? • …or is it really just crude oil prices which fuel the enthusiasm for alternative energy (and the funding for its development)?

3. Introduction • Define “alternative energy” and “alternative energy funding” for this discussion • Why is this discussion important? • Compare Energy R & D funding (alternative energy funding) since 1976 with: • Political party of the Presidents • Emergence of global warming as a major concern • Crude oil prices • Wrap up

4. Oil Prices 1970-2008

5. Oil Dependence • Imported oil meets 66% of America’s current daily petroleum needs • Given present trends, oil and natural gas will meet 60% of total • world energy needs by 2030

6. Defining “Alternative Energy?” Biofuels Solar Wind Waves Hydro Title 26, Chapter 79, Section 7701 of the revised U.S. Code: "the term alternative energy facility means a facility for producing electrical or thermal energy if the primary energy source is not oil, natural gas, coal, or nuclear power." Today, alternative energy sources used in the United States today include biofuels for transportation, as well as solar, hydroelectric and wind power for electricity.

7. Defining “Alternative Energy Funding” • Alternative energy is mainly an R & D function • United States Budget Item: “Energy • Non-Defense Research and Development” • Gives us a good “yardstick” to measure US • government funding for purposes of this • exercise)

8. President’s Political Party Versus Energy R & D Funding • Energy R & D funding rises during Carter and falls under Reagan/Bush 41 • Rises then falls under Clinton then sharp rise under Bush 43 • The trend doesn’t suggest a correlation with Democrat/Republican president • Data does not show one party is “greener” • Data does suggest something else is driving this train

9. The Global Warming Factor • As global warming interest/pubic awareness/concern grew steadily since 1976, alternative energy funding trend obviously didn’t follow suit • Data does not suggest a correlation between the global warming issue and Energy R & D funding Global Warming Interest: 1 = <25% of public sees global warming as a major concern 2 = >25% and <50% of public see global warming as a major concern 3 = >50% of public cites global warming as a major concern

10. Comparing to Crude Oil Prices • As trend line shows, crude oil prices and Energy R & D funding follow each other closely until 1998 • Starting in 1998, crude oil prices shoot up but Energy R & D funding doesn’t start to follow crude’s uptrend until 2007 • Data shows a correlation between crude oil prices and Energy R & D funding from 1976 to 1998, then correlation loosens up considerably

11. Wrap Up • The idea that Democrats are “greener” than Republicans is not supported by the data • Our global warming scare is not resulting in more Energy R & D dollars being spent by Uncle Sam • Comparing crude oil prices to Energy R & D spending produces the strongest correlation

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