Top EIA Energy Trends Watcher: No Definitive Count on Dirty Energy Welfare

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The national conversation about wasteful welfare for highly profitable dirty energy corporations has gone from theย dramatic statementย by the Chief Economist of the International Energy Agency that fossil fuel subsidies are one of the biggest impediments to global economic recovery (โ€œthe appendicitis of the global energy system which needs to be removed for a healthy, sustainable development futureโ€), toย a speechย by Solar Energy Industries Association President Rhone Resch (in which he called the fossil fuel industry โ€œgrotesquely oversubsidizedโ€), to a call by President Obamaย to cut oil company welfare by $4 billion. Not to be outdone,ย House Democrats are now calling forย a $40 billionย cut.

Dirty energyย welfare defendersย have, predictably, responded withย ridiculous, Palin-esqueย denials of reality, but the voter demands that wasteful spending be cut begs the question: just how much of our tax moneyย isย going to ExxonMobil, Massey, etc.? With the new deficit hawks in Congress going after insignificant items like bottled water expenses, youโ€™d think theyโ€™d want to know the size of theย reallyย wasteful stuff, right?

The problem is, weโ€™ve long suspected that no one really knows how much of our money goes to dirty oil executives likeย Rex Tillersonย andย Gregory Boyce. There have been counts, ranging from $10 billion a year by the Environmental Law Institute, to the more comprehensive, $52 billion a years by Doug Koplow of EarthTrack.ย  But, do taxpayers even have a widely accepted,ย comprehensiveย inventory of how of our money is being handed to the dirty energy lobby by politicians?ย  That includes state-level subsidies, by the way, such as theย $45 million that Virginia gives to the coal industry.

Energy trends analystย Chris Namovicz of the U.S. Energy Information Administrationย (EIA) was the latest speaker in our โ€œCommunicating Energyโ€ lecture series. We took the opportunity to ask one of the top, neutral energy trends analysts in the country the question, โ€œDo you knowย if someone has actually doneย a credible, comprehensive, definitive count of how much taxpayers underwrite fossil fuels in this country?โ€ We added the thought that โ€œthereโ€™s no one really widely available number where average citizens can say, yeah, this much of my money goes to pay ExxonMobil.โ€

According to Namovicz, there really isnโ€™t such a widely available, definitive, comprehensiveย number.

Rightโ€ฆweโ€™re not accounting forย the nuclear insurance subsidy, weโ€™re not accounting for military oil shipping, weโ€™re not even accounting for the tax depreciation benefits that some resources get overย othersโ€ฆ

ย 

The fact is, there is a wide array of government subsidies, both implicit and explicit, that are doled out every year to fossil fuel companies. One estimate, by theย Environmental Law Institute, finds that dirty energy companies in the United States alone have run upย a $72 billion tab at the taxpayerโ€™s bar from 2002 to 2008. Worldwide, itโ€™s far worse; asย this study by the OECDย explains:

The [International Energy Agency] estimates thatย direct subsidies that encourage wasteful consumption by artificially lowering end-user prices for fossil fuels amounted to $312 billion in 2009.ย In addition, aย number of mechanisms can be identified, also in advanced economies, which effectively support fossil-fuel production or consumption, such as tax expenditures, under-priced access to scarce resources under government control (e.g., land) and the transfer of risks to governments (e.g., via concessional loans or guarantees). These subsidies are more difficult to identify and estimate compared with direct consumerย subsidies.

As I pointed out in a recent post, these subsidies arenโ€™t just reckless and stupid, they arenโ€™t even what people want. In fact,ย only 8 percent of Americansย prefer their tax money be given to highly profitable, mature industries such as ExxonMobil and Masseyย Energy.

Shouldnโ€™t there be a definitive count of energy subsidies? As weโ€™re looking at cutting waste from our federal (and statesโ€™) budgets, shouldnโ€™t there be a credible accounting of all the ways we pay to grease the way for these mature, highly profitable industries? Weโ€™re not talking about one done by dirty energy lobbyists or their hired โ€œexperts,โ€ by the way, but a real inventory done by those who wouldnโ€™t profit by a lower or incomplete count. Such an accounting shouldย include:

  • Taxย breaks
  • Dirtyย subsidies
  • The costs of government agencies that are set up to perform functions that these industries should pay full cost for doing โ€“ such as figuring out how to stuff their pollution underground instead of wasting it on exorbitant, fantasy projects likeย โ€œFutureGen.โ€
  • Military expenditures to protect oil shippingย lanes.
  • Pollution forgiveness orย remediation
  • Rock-bottom priced access to public property โ€“ mountains, subsurface property, aquifers, ocean waters โ€“ which fossil energy companies routinely wreck and pay comparatively little toย fix.

We need to force politicians to be aggressively honest about how much ofย our moneyย is going toย Tillerson,ย Boyce,ย Blankenship,ย Oโ€™Reilly,ย Lesar, etc. Until they do, the anti-clean energy bigmouths in Congress who are bashing clean energy policy support need to back way off. And, the dirty energy lobby mouthpieces who propagandize how โ€œcheapโ€ dirty energy is, should do the same. Directly or indirectly, weโ€™re paying theirย salaries.

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