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Listen to the messages coming out of Washington, D.C. and you'd think we're spending all our available money on clean and green technologies, things like algae biofuels, cleaner cars and advanced batteries. Turns out, this isn't remotely true. According to a new study that reviewed fossil fuel and energy subsidies for Fiscal Years 2002-2008 was just released by the Environmental Law Institute and discovered that the U.S. spends about two-and-a-half times as much on fossil fuels (mostly aiding foreign oil production) than it does on renewable energy. Fossil fuels were given about $72 billion during the seven years, while renewable fuels got just $29 billion. The money the U.S. spends on renewables isn't all that great, either. Of the $29 billion, $16.8 billion went to producing corn-based ethanol. Just two tax credits – the Foreign Tax Credit and the Credit for Production of Nonconventional Fuels – account for about $30 billion. The ELI writes that, "The Foreign Tax Credit applies to the overseas production of oil through an obscure provision of the U.S. Tax Code, which allows energy companies to claim a tax credit for payments that would normally receive less-beneficial treatment under the tax code."

It seems to us that taking some government money out of subsidizing fossil fuels would have a doubling impact on getting to a greener economy: petroleum products would get more expensive (a good thing to more to cleaner cars) and money would be freed up for cleaner technologies.

You can download a PDF of the report, titled "Estimating U.S. Government Subsidies to Energy Sources: 2002-2008." For purposes of the study, fossil fuels included petroleum and its byproducts, natural gas, and coal products; renewable fuels included wind, solar, biofuels and biomass, hydropower, and geothermal energy production. Nuclear was not included in either definition.

[Source: Environmental Law Institute]
Photo by Kenneth Hynek. Licensed under Creative Commons license 2.0.



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  • 21 Comments
      • 6 Months Ago
      Well, now that you folks have a president who can read, write and speak in coherent sentences, maybe you should ask him to do something about it. Not right now maybe, considering the... let's call it "heated"... debate about certain other issues.
        • 6 Months Ago
        "You Lie!"

        (Sorry, I couldn't help myself!)
      • 5 Years Ago
      If true, this is out-FUCKING-rageous. Common Obama and Chu, walk the walk.

        • 6 Months Ago
        @ Tim

        The only people who are advocating for "free market capitalism" are corporations like Koch Industries and Competitive Enterprise Institute (which is funded by some of the biggest polluters in the world) which lobby heavily on having the government "ignore them" so they can pollute even more.

        Tim, if "the market was very heavily regulated by Congress", then Bernie Madoff (SEC, thanks a lot for nothing) would not have gotten away for ten years. Peanut Corporation of America (FDA, thanks a lot for nothing) wouldn't have release tainted peanuts. FEMA, FCC, etc. Your "free market capitalism" isn't going to change anything. The regulators do not regulate. Until the government decides to play a more active role in protecting and working for the people, you can kiss goodbye to peace and order.

        Government doesn't control the corporation. Corporation control the government.

        Tim, I don't know who you are. But I seriously hope you're not one of those idiots who play the "socialist/communist" accusation game. Because if you are, then you are nothing new.
        http://www.thestimulist.com/right-wing-paranioa-is-nothing-new/
        • 6 Months Ago
        @jpm. Not very nice. How about suggesting some education or real world experience instead of just hitting him with a bus?
        • 6 Months Ago
        Corporate Welfare Redistribution aka Crony Capitalism is to blame for our current problems. When politicians picks winners… WE, the Taxpayers LOSE!

        Why?

        Redistribution creates an environment where malfeasance and malinvestment is rewarded by corrupt crony politicians who are willing to reward their corporate masters both by regulating their competitors and redistributing taxpayer money. The latest round of bailouts is just the most recent example of crony-capitalism rewarding failure since President Wilson first gave the private Federal Reserve Bankers control of our currency.

        When Progressive Crony-Capitalism fails, the Progressives blame "free market capitalism". In fact, the market was very heavily regulated by Congress. This ongoing progressive False-Flag operation is designed to give progressives an excuse to redistribute MORE taxpayer money to their giant corporate masters and implement MORE regulation on their masters small business competitors.

        What do Progressives get in return… power, money, influence and a “warm feeling” as they drink the blood of liberty.

        If the market were TRULY free from gov't sponsored corporate monopolies (crony-capitalism), simple competitive supply-demand economics would have allowed renewables to replace fossil fuels many years ago.

        We should lay the blame exactly where it belongs... at the feet of Progressives.

        America should not have to use any (ocracy), (ism) or (ist) in the way we describe ourselves.

        Watch the film: The American Form of Government

        It is on YouTube.
        • 6 Months Ago
        Obama wasn't President of the U.S. until January 20th, 2009. This report covers the time period were Bush was President of the country, he was President from 2001-2009.
      • 5 Years Ago
      +1

      Mark Mitchell is quite right.

      U.S. Energy Consumption by Energy Source
      Fossil Fuels - 99.305 Quadrillion Btu in 2008
      Renewable Energy - 7.301Quadrillion Btu in 2008
      Source: http://www.eia.doe.gov/cneaf/alternate/page/renew_energy_consump/table1.html

      Just so there's no misunderstanding: I strongly support investing in renewable sources of energy through grants, loans, and, yes, even subsidies.
      • 6 Months Ago
      I love the stuff you guys cover, but could you please proofread your articles before posting them?

      > According to a new study that reviewed fossil fuel
      > and energy subsidies for Fiscal Years 2002-2008 was
      > just released by the Environmental Law Institute
      > and discovered that

      ??

      > the U.S. spends about two-and-a-half times as much
      > on fossil fuels (mostly aiding foreign oil
      > production) than it does on renewable energy.

      Should be "as it does".

      > petroleum products would get more expensive (a
      > good thing to more to cleaner cars)

      ??
      • 6 Months Ago
      Corn Ethanol is NOT the solution.
      If you take an acre currently being used to grow corn for ethanol, there are biofuels that can be grown on that same acre that produce MORE total energy output AND require LESS inputs than that corn.

      But those biofuels dont require thousands of dollars worth of proprietary seeds, chemicals, treatments etc so companies like Monsanto will do all they can to stop them.
      • 6 Months Ago
      Also realize that the Ethanol "blenders tax credit" goes to oil companies for blending E-10, instead of going to the producers.
      • 6 Months Ago
      http://www.energyandcapital.com/articles/oil-gas-crude/461
      "Milton Copulus, the head of the National Defense Council Foundation, has a different view. And as the former principal energy analyst for the Heritage Foundation, a 12-year member of the National Petroleum Council, a Reagan White House alum, and an advisor to half a dozen U.S. Energy Secretaries, various Secretaries of Defense, and two directors of the CIA, he knows his stuff. After taking into account the direct and indirect costs of oil, the economic costs of oil supply disruption, and military expenditures, he estimates the true cost of oil at a stunning $480 a barrel."
      • 5 Years Ago
      This does not even consider the other forms of subsidy
      - All the money spent gauring and waging wars in Middle East
      - Environmental harm caused by fossil fuels

      and we are not even talking about the toll in blood.
        • 6 Months Ago
        Yes, shouldn't the 'war' in Iraq count to the fossil fuel too?
      • 5 Years Ago
      Hold on now. The petroleum based fuel infrastructure is many many times larger than all the other fuel infrastructures combined so the percentage subsidy per delivered BTU is likely a whole bunch lower than the high figure would appear to suggest.
        • 6 Months Ago
        I was going to mention this. To be fair, or at least to get the whole picture, you also need to compare the subsidy per unit of energy produced. Then things might not seem as outrageous.

        That said, we should cut oil subsidies and raise the gas tax to promote cleaner energy.
        • 6 Months Ago
        Why do you need subsidies when you make profits of 45billion in profit for just one year?

        ExxonMobile
      • 6 Months Ago
      Why the photoshopped picture?
      • 6 Months Ago
      Take a tranquilizer you guys! I agree with PopSmith. Note the years of the study are 2002 - 2008. Obama hasn't been steering the bus a full 12 months yet. Blame BUSH!!
      • 6 Months Ago
      I would like to point out that the biggest tax break, the Foreign Tax Credit, is a general tax credit that is applicable to ALL US companies operating abroad, not just the oil companies. So I wouldn't exactly call that a fossil fuel subsidy because it's also available to alternative energy companies also if they had operations outside the US.
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