Let the sunshine in!
You could tell the independent oil men by their pinkie rings. The Big Oil guys wore expensive brown suits and conservative ties.
Both groups were visiting the US Senate for the same thing: to protect the lucrative tax breaks and public money that guaranteed growth in the fossil fuel industry. Life in the oil patch is easy and rewarding and they want it to stay that way.
Each year, the US pours an estimated $20.5 billion into fossil fuels, including about $14.7 billion in federal subsidies and $5.8 billion in state-level incentives. Most of these are in the form of tax deductions, exemptions—“obscure tax loopholes and accounting tricks” permanently embedded in the tax code.
Solar energy sees barely a glimmer of such support. A federal tax credit for purchasers was offered in 2005 and renewed sporadically and set to decline yearly even then. It’s now slated to end in 2024. Our state gives solar a tiny boost by eliminating sales tax for solar purchases. (There will be better support if the legislature adopts proposals outlined in the page 1 article.)
Despite these minuscule amounts, a coal industry publication griped that far too much money has been spent on renewable resources. From their initial adoption in 1979 through 2018, wind and solar “received subsidies amounting to more than $100 billion.” They demanded an end to any subsidy: “the wind and solar industries are mature and able to compete with other electricity generators on an equal footing.”
Over the same years, subsidies to the oil/gas/coal sector amounted to $640 billion—but who’s counting? No one, apparently. The guys in the suits and pinkie rings have amassed a level of political power that enables them to repel each effort to reduce or eliminate the subsidies.
Taking just the 2015-16 election cycle, In the two years before the 2016 election, oil, gas and coal companies spent $354 million in campaign contributions and lobbying. Their reward was $29.4 billion in federal subsidies for those two years—a 8,200% return on investment.
US tax policy and other subsidies have privileged the fossil fuel industry and distorted markets; stifling innovation and contributing to the destruction of the planet.
At current oil prices, estimates are that if not for public subsidies, almost half of new oil fields getting drilled would have been left in the ground. If produced, that oil would generate the equivalent of 5.5 billion tons of CO2.
Time to cut off the flow of money to the fossils with their hands out.
Sources: Figures for fossil fuel subsidies are in “Dirty Energy Dominance: Dependent on Denial,” Oil Change International and “Friendly Policies Keep US Oil and Coal Afloat,” which also has lobbying expenditures David Roberts @drvolts.
Figures on solar subsidies are from The Homeowner’s Guide to the Federal Tax Credit for Solar at www.energy.gov.
America’s Power published “Time to End Subsidies for Renewables.”
The effect of subsidies on future oil production is from Stockholm Environment Institute at http://www.sei.org