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IEA: Fossil Fuels Get $550 Billion/Year in Subsidies, 4x More than Clean Energy

Posted By Lowell F. on November 12th, 2014

Need any more evidence that fossil fuels are heavily subsidized, putting clean energy at a competitive disadvantage due to governments tilting the playing field heavily in favor of coal, oil, and natural gas?  Here you go.

Fossil fuels are reaping $550 billion a year in subsidies and holding back investment in cleaner forms of energy, the International Energy Agency said.

Oil, coal and gas received more than four times the $120 billion paid out in incentives for renewables including wind, solar and biofuels, the Paris-based institution said today in its annual World Energy Outlook.

Next time you hear a cleantech basher or fossil fuel flack talking about how government shouldn’t “pick winners and losers,” point them right here.

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Sen. Lamar Alexander: Taxpayer-Funded Corporate Welfare Bad, Except When It’s For Fossil Fuels

Posted By Lowell F. on August 27th, 2014

See below for the latest example of Sen. Lamar Alexander’s relentless push for continued, even increased, taxpayer-funded corporate welfare to the fossil fuel industry.

Sen. Lamar Alexander (R-Tenn.) called on the administration to expand oil and gas drilling in the Outer Continental Shelf.

“There is no reason we shouldn’t be using all the resources we have available to increase our energy security, create more jobs at home and reduce our reliance on oil from countries that want to do us harm,” Alexander said Tuesday.

He made the comments after he and 20 other Republicans sent a letter to Interior Secretary Sally Jewell. Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski (R-Alaska) led the letter. The lawmakers asked that the department make all offshore oil and gas resources in the Outer Continental Shelf available for development.

Now, contrast that with Alexander’s opposition to popular, effective pro-wind policies, which he calls a…yes, you guessed it, “wasteful taxpayer subsidy.” Even more internally inconsistent and illogical, Sen. Alexander claims that we shouldn’t be subsidizing a “mature technology,” which he argues “should stand on its own in the marketplace.”  Yet here he is again, pushing to do exactly that: subsidize one of the most mature technologies known to man — drilling holes in the ground and pumping out oil, something we’ve been doing for well over a century now, and something that certainly doesn’t require government tilting the playing field in its favor at this point.

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11 Years and $1 Billion in Taxpayer Money Later — No “Zero-Emissions Coal Plant”

Posted By Lowell F. on August 25th, 2014

The next time the coal industry wags its finger at clean energy about “standing on its own two feet,” someone should tell them to pay for their taxpayer-funded “clean coal” science project.

In 2003, President George W. Bush unveiled plans for the world’s first zero-emissions coal plant, a project that would serve as a global showcase of America’s ability to reduce carbon emissions from fossil fuels…More than a decade later, there has yet to be a groundbreaking for FutureGen 2.0.


Even the Energy Department now has doubts about whether FutureGen will succeed. Last year the department designated the FutureGen alliance charged with building the project as a “high-risk” grant recipient that might not be able to meet a September 2015 deadline for spending $1 billon in federal stimulus dollars, according to a document reviewed by The Seattle Times.

So, how come there isn’t constant coverage about this enormous boondoggle? It only seems fair, since seemingly every cleantech stumble is shouted from the rafters by fossil-fuel-funded “think tanks” and their allies in the media.

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New Study: Large Oil and Gas Companies Pay Miniscule Tax Rate

Posted By Lowell F. on August 3rd, 2014

Recently, we noted an analysis on The Great Energy Challenge blog by Bill Chameides, Dean of Duke’s Nicholas School of the Environment, which found an incredible 30 to 1 ratio in favor of fossil fuels when it comes to political contributions in the 2011-2012 campaign cycle, as well as a 7:1 ratio for lobbying expenditures in favor of fossil fuels. At the time, we asked what all that money bought. Our theory: all those campaign contributions and lobbying expenditures purchased a great deal of policy influence in Congress for the fossil fuel industry. In turn, that influence helped ensure that the taxpayer-funded corporate welfare gravy train to the fossil fuel industry continued, while simultaneously slowing down momentum towards a clean energy transition, heading off a price on carbon; etc.

Now, a new study by Taxpayers for Common Sense confirms our theory — in spades.

From 2009 through 2013, large U.S.-based oil and gas companies paid far less in federal income taxes than the statutory rate of 35 percent. Thanks to a variety of special tax provisions, these companies were also able to defer payment of a significant portion of the federal taxes they accrued during this period.

According to their financial statements, 20 of the largest oil and gas companies reported a total of $133.3 billion in U.S. pre-tax income from 2009 through 2013. These companies reported total federal income taxes during this period of $32.1 billion, giving them a federal effective tax rate (ETR) of 24.0 percent. Special provisions in the U.S. tax code allowed these companies to defer payment of more than half of this tax bill. This group of companies actually paid $15.6 billion in income taxes to the federal government during the last five years, equal to 11.7 percent of their U.S. pre-tax income. This measure, the amount of U.S. income tax paid regularly every tax period (i.e. not deferred), is known as the “current” tax rate.

Four of the companies in this study – ExxonMobil, ConocoPhillips, Occidental, and Chevron – account for 84 percent of all the income and paid 85 percent of all the taxes for the entire group. These four had an ETR of 24.4 percent and a current ETR of only 13.3 percent. The smaller firms paid an even smaller share of their tax liability on a current basis. When the top four companies and those with losses are excluded from the analysis, the remaining companies reported a 28.9 percent ETR on U.S. income, but only a 3.7 percent current rate. They deferred over 87 percent of their tax liability.

The bottom line is that the fossil fuel industry invests a lot of money into our political system, and receives a healthy return on that investment. How healthy?  According to Oil Change International, during the 111th Congress (2009-2010), fossil fuel lobbying expenses amounted to a whopping $347 million, but the reward was $20.5 billion in taxpayer dollars, for a 5,800% “return on political investment.” And that’s not even counting the low tax rate paid by fossil fuels, just the subsidies doled out to this super-wealthy industry every year.  Also, see this report by the Center for American Progress, which found that despite the five big oil companies “earn[ing] a combined total of $93 billion” in 2013, they still fought to maintain – and even expand – “their $2.4 billion-per-year tax breaks.”

So, next time you hear the fossil fuel folks claiming that it’s actually clean energy which is heavily subsidized, and which supposedly can’t survive without government support, point them to this article and tell them to…well, have a nice day.

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New Report Finds Yet Another Egregious Example of Taxpayer-Funded Corporate Welfare to the Dirty Fossil Fuel Industry

Posted By Lowell F. on July 31st, 2014

Add this report, on “Federal Coal Leasing in the Powder River Basin,” to the long list of taxpayer-funded corporate welfare going to fossil fuel companies. As David Roberts of Grist wrote in 2011, “fossil fuels have gotten the bulk of government help — 70 percent to renewables’ 10 percent, for a total of $594 billion in fossil-fuel subsidies over the last 60 years.” But that only counts direct subsidies, not “externalities” or other indirect subsidies that are difficult, if not impossible, to measure. For instance, as this new report explains, coal leasing in Wyoming’s Powder River Basin is a really “bad deal for taxpayers.” Here’s an excerpt:

While it is evident that Powder River Basin coal is a major contributor to U.S. climate change and carbon pollution, what is less apparent are the real economic and social costs of burning this coal—and the true cost borne by U.S. taxpayers, which has long been overlooked by policymakers.


All in all, depressed market valuations, an anti-competitive leasing program, low royalty rates that have not changed in decades, and unaccounted for social and environmental costs all mean that U.S. taxpayers are paying heavily to sell, mine, and burn Powder River Basin coal. When the social cost of carbon for burning this coal at $62 per short ton is taken into account, the federal government is not only foregoing billions of dollars in lost revenue but is also selling publicly owned coal at a net social loss of at least $49 per short ton

Even using BLM’s lower estimate of 388 million tons of federal coal sold from the Powder River Basin in 2012, the total net social loss that year was more than $19 billion dollars. These losses will continue to reach into the hundreds of billions of dollars if Powder River Basin coal remains so highly undervalued and production continues at similar levels to today.

The bottom line is that the government is selling federal coal at a huge loss, subsidizing an industry to produce carbon pollution, and seemingly has no meaningful plan to change course. In its current form, the federal coal-leasing program in the Powder River Basin is—from top to bottom—a bad deal for U.S. taxpayers.

By the way, the next time anyone from the fossil fuel industry, or one of their paid flacks, tries to tell you that renewable energy can only survive if it is heavily subsidized, you might want to point them to this new study on taxpayer-funded corporate welfare to Power River Basin coal, and to numerous other studies telling the same basic story for other fossil fuel industries – coal mined in the rest of the country, “fracked” natural gas, oil, etc. Our guess is that they won’t have a response to this information, at least a response that makes the least bit of sense.

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