Sunday, January 23, 2011

End Egregious Fossil Payola, Encourage Cost-Effective Renewables

US soldiers at the Rumeilah Oil Field in southern Iraq. One of the damaged oil wells is seen gushing out of control in the background. Several wells were set alight by retreating Iraqi troops during the invasion by coalition forces in March 2003.
Did you know the Department of Energy runs an "Office of Fossil Energy," which includes:
  • Clean Coal Power Initiative
  • FutureGen
  • Fuels
  • Power Systems
  • Natural
  • Gas Technologies
  • Petroleum – Oil Technologies
  • Fossil Energy Environmental Restoration
  • Cooperative Research and Development
According to the Energy Institute of America, as of 2007, US taxpayers coddle and cuddle the fossil fuel industry at a cost of about $10 billion annually. Fossil fuels are an established industry, they post healthy profits every year. Do you really want to funnel tax dollars into the profit margins of dinosaur corporations that pollute our air and water, and irrevocably destroy our landscapes? If you do, write 'em a check. But let's not tax everyone to top off executive salaries.

Here's about forty pages of fun, fun, fun on fossil subsidies from the Environmental Law Institute:
Estimating U.S. Government Subsidies to Energy Sources: 2002-2008
The vast majority of federal subsidies for fossil fuels and renewable energy supported energy sources that emit high levels of greenhouse gases when used as fuel.
• The federal government provided substantially larger subsidies to fossil fuels than to renewables. Subsidies to fossil fuels—a mature, developed industry that has enjoyed government support for many years—totaled approximately $72 billion over the study period, representing a direct cost to taxpayers.
• Subsidies for renewable fuels, a relatively young and developing industry, totaled $29 billion over the same period.
• Subsidies to fossil fuels generally increased over the study period (though they decreased in 2008), while funding for renewables increased but saw a precipitous drop in 2006-07 (though they increased in 2008).
• Most of the largest subsidies to fossil fuels were written into the U.S. Tax Code as permanent provisions. By comparison, many subsidies for renewables are time-limited initiatives implemented through energy bills, with expiration dates that limit their usefulness to the renewables industry.
• The vast majority of subsidy dollars to fossil fuels can be attributed to just a handful of tax breaks, such as the Foreign Tax Credit ($15.3 billion) and the Credit for Production of Nonconventional Fuels ($14.1 billion). The largest of these, the Foreign Tax Credit, applies to the overseas production of oil through an obscure provision of the Tax Code, which allows energy companies to claim a tax credit for payments that would normally receive less-beneficial tax treatment.
• Almost half of the subsidies for renewables are attributable to corn-based ethanol, the use of which, while decreasing American reliance on foreign oil, raises considerable questions about effects on climate.
Here's a shorter piece from the Global Subsidies Initiative about subsidies and their hidden costs that offers some useful dollar and carbon figures:
An introduction to energy subsidies
The upshot is: the fossil energy industry would not exist without ongoing taxpayer support -- witness our defense policy, interstate highway system, and BLM royalties on Federal lands strip-mined for coal. But since the price of fossil energy doesn't represent the true cost, many assert we can blithely ignore all the externalities that are hard to put a price on. What's a Pennsylvania aquifer worth? What is coral reef worth? What is an Appalachian valley and its surrounding peaks worth? Fossil-based energy is a dying industry. We can sit around and watch it die, and die with it as price and environmental degradation escalate.

Or, we can wise up, like every other industrialized country on the planet, and migrate toward renewables and the broad prosperity that will come with the associated domestic manufacturing expansion that consistent subsidies and fair trade rule enforcement could engender. But if we continue to cut renewables off at the knees with on again, off again energy policy muddled by oil, coal, gas, and nuclear industry lobbyists, and corrupt trading partners, we will never get there. When the renewable industry finally gets off the ground, subsidies could be terminated, as they should be now for fossil fuels and nuclear power.

If temporary subsidies and strict enforcement of trade rules are the price of a sustainable, healthy future with expanded domestic industry -- like China has proven quite possible -- then so be it. And we can do it with union wages, and Western worker safety and environmental standards -- you are a coward if you claim we can't -- the US has met bigger challenges than that.

Fossil fuels are a mature industry -- they don't need subsidies if they are truly viable energy sources. (Same for nuclear.) Renewable energy is a newborn industry surrounded by baying wolves -- they do need subsidies to survive. Let's be generous -- to ourselves. Let's take care of those in need, and let the overfed fend for themselves.

read more about energy in my blog:

and here's a much more expansive view of energy subsidies, "ANALYSIS OF THE SCOPE OF ENERGY SUBSIDIES AND SUGGESTIONS FOR THE G-20 INITIATIVE: IEA, OPEC, OECD, WORLD BANK JOINT REPORT", which put global fossil  fuel subsidies somewhere around $700 billion annually (click the link or find it here: )

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