2.27.2011

How Much Tax Money Goes to Fossil Energy Companies

Q:just how much of our tax money is going to ExxonMobil, Massey, etc.? With the new deficit hawks in Congress going after insignificant items like bottled water expenses, you'd think they'd want to know the size of the really wasteful stuff, right?

A:There have been counts, ranging from $10 billion a year by the Environmental Law Institute, to the more comprehensive, $52 billion a year by Doug Koplow of EarthTrack. But, do taxpayers even have a widely accepted, comprehensive inventory of how of our money is being handed to the dirty energy lobby by politicians? That includes state-level subsidies, by the way, such as the $45 million that Virginia gives to the coal industry

Why We Still Don't Know How Much Money Goes to Fossil Energy

By Mike Casey | February 16, 2011

The national conversation about wasteful welfare for highly profitable dirty energy corporations has gone from the dramatic statement by the Chief Economist of the International Energy Agency that fossil fuel subsidies are one of the biggest impediments to global economic recovery ("the appendicitis of the global energy system which needs to be removed for a healthy, sustainable development future"), to a speech by Solar Energy Industries Association President Rhone Resch (in which he called the fossil fuel industry "grotesquely oversubsidized"), to a call by President Obama to cut oil company welfare by $4 billion.

Not to be outdone, House Democrats are now calling for a $40 billion cut.
Dirty energy welfare defenders have, predictably, responded with ridiculous, Palin-esque denials of reality, but the voter demands that wasteful spending be cut begs the question: just how much of our tax money is going to ExxonMobil, Massey, etc.? With the new deficit hawks in Congress going after insignificant items like bottled water expenses, you'd think they'd want to know the size of the really wasteful stuff, right?

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

Energy trends analyst Chris Namovicz of the U.S. Energy Information Administration (EIA) was the latest speaker in our "Communicating Energy" lecture series. We took the opportunity to ask one of the top, neutral energy trends analysts in the country the question, "Do you know if someone has actually done a credible, comprehensive, definitive count of how much taxpayers underwrite fossil fuels in this country?" We added the thought that "there's no one really widely available number whereaverage citizens can say, yeah, this much of my money goes to pay ExxonMobil.
According to Namovicz, there really isn't such a widely available, definitive, comprehensive number.

http://www.youtube.com/v/2B4tgpqjXuY&amp

Right…we're not accounting for the nuclear insurance subsidy, we're not accounting for military oil shipping, we're not even accounting for the tax depreciation benefits that some resources get over others...

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 the Environmental Law Institute, finds that dirty energy companies in the United States alone have run up a $72 billion tab at the taxpayer's bar from 2002 to 2008. Worldwide, it's far worse; as this study by the OECD explains:

The [International Energy Agency] estimates that direct subsidies that encourage wasteful consumption by artificially lowering end-user prices for fossil fuels amounted to $312 billion in 2009. In addition, a 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 consumer subsidies.

As we pointed out in a recent post, these subsidies aren't just reckless and stupid, they aren't even what people want. In fact, only 8 percent of Americans prefer their tax money be given to highly profitable, mature industries such as ExxonMobil and Massey Energy.

Shouldn't there be a definitive count of energy subsidies? As we're looking at cutting waste from our federal (and states') budgets, shouldn't there be a credible accounting of all the ways we pay to grease the way for these mature, highly profitable industries? We're not talking about one done by dirty energy lobbyists or their hired "experts," by the way, but a real inventory done by those who wouldn't profit by a lower or incomplete count. Such an accounting should include:

Tax breaks
Dirty subsidies
The costs of government agencies that are set up to perform functions that these industries should pay full cost for doing – such as figuring out how to stuff their pollution underground instead of wasting it on exorbitant, fantasy projects like "FutureGen."
Military expenditures to protect oil shipping lanes.
Pollution forgiveness or remediation
Rock-bottom priced access to public property – mountains, subsurface property, aquifers, ocean waters -- which fossil energy companies routinely wreck and pay comparatively little to fix.

We need to force politicians to be aggressively honest about how much of our money is going to Tillerson, Boyce., Blankenship, O'Reilly, 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 "cheap" dirty energy is, should do the same. Directly or indirectly, we're paying their salaries.