September 23, 2009

Fossil fuels - $72 billion in subsidies

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A recent article from DTN pointed to report from the Environmental Law Institute that found that between 2002 and 2008, federal subsidies to fossil fuels were much higher than any subsidies given to biofuels or other renewable energy sources.

This, despite an international focus on the merits of cutting back the use of fossil fuels to reduce greenhouse gas emissions.

The study, which you can download here (.pdf), reported that subsidies for fossil fuels totaled about $72 billion between 2002 and 2008. Subsidies for renewable energy totaled just $29 billion - with corn-based ethanol getting about half of that amount. (This makes sense, since the corn ethanol industry expanded so rapidly during this time to become -- and remain -- the most widely used renewable transportation fuel in history.)

Here's a good quote from the study:

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.

Much of the subsidies for fossil fuels comes in the form of several special tax breaks.

During the study period, the report said that subsidies for fossil fuels generally increased (except last year...when companies like Exxon were making $90,000 a minute) while funding for renewables generally increased, but dropped in 2006-07 and then increased again last year.

(Sorry I can't link to the DTN story...but I can email it to you if needed. Just post a comment.)

The study was mentioned in several news reports today that focused on President Barack Obama calling on a global end to government subsidies that encourage the use of fossil fuels. Obama is hosing the G-20 economic summit opening tomorrow and he's supposed to propose a gradual elimination of such subsidies.

As reported by CBS online:

"Later this week, I will work with my colleagues at the G-20 to phase out fossil fuel subsidies so that we can better address our climate challenge," Obama said Tuesday at the United Nations global warming summit.

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