Memo To EPA Chief Pruitt: Let’s End Subsidies For Fossil Fuels, Not Renewables

By Elliott Negin, Contributor, Senior Writer, Union of Concerned Scientists
October 24, 2017

Government handouts for coal, oil and gas dwarf those for wind and solar.

Envi­ron­men­tal Pro­tec­tion Agency Admin­is­tra­tor Scott Pruitt recent­ly pro­posed elim­i­nat­ing fed­er­al tax cred­its for wind and solar pow­er, argu­ing that they should “stand on their own and com­pete against coal and nat­ur­al gas and oth­er sources” as opposed to “being propped up by tax incen­tives and oth­er types of credits.…”

Stand on their own?

Pruitt sure­ly must be aware that fos­sil fuels have been feast­ing at the gov­ern­ment trough for at least 100 years. Renew­ables, by com­par­i­son, have received sup­port only since the mid-1990s and, until recent­ly, have had to sub­sist on scraps.

Per­haps a review of the facts can set Admin­is­tra­tor Pruitt straight. There’s a strong case to be made that Con­gress should ter­mi­nate sub­si­dies for fos­sil fuels and extend them for renew­ables, not the oth­er way around.

A Cen­tu­ry (or Two) of Subsidies

To pro­mote domes­tic ener­gy pro­duc­tion, the fed­er­al gov­ern­ment has been serv­ing the oil and gas indus­try a smor­gas­bord of sub­si­dies since the ear­ly days of the 20th Cen­tu­ry. Com­pa­nies can deduct the cost of drilling wells, for exam­ple, as well as the cost of explor­ing for and devel­op­ing oil shale deposits. They even get a domes­tic man­u­fac­tur­ing deduc­tion, which is intend­ed to keep U.S. indus­tries from mov­ing abroad, even though — by the very nature of their busi­ness — they can’t move over­seas. All told, from 1918 through 2009, the industry’s tax breaks and oth­er sub­si­dies amount­ed to an aver­age of $4.86 bil­lion annu­al­ly (in 2010 dol­lars), accord­ing to a 2011 study by DBL Investors, a ven­ture cap­i­tal firm. Account­ing for infla­tion, that would be $5.53 bil­lion a year today.

The DBL study didn’t include coal due to the lack of data for sub­si­dies going back to the ear­ly 1800s, but the fed­er­al gov­ern­ment has lav­ished con­sid­er­ably more on the coal indus­try than on renew­ables. In 2008 alone, coal received between $3.2 bil­lion and $5.4 bil­lion in sub­si­dies, accord­ing to a 2011 Har­vard Med­ical School study in the Annals of the New York Acad­e­my of Sciences.

Mean­while, wind and oth­er renew­able ener­gy tech­nolo­gies, DBL found, aver­aged only $370 mil­lion a year in sub­si­dies between 1994 and 2009, the equiv­a­lent of $421 mil­lion a year today. The 2009 eco­nom­ic stim­u­lus pack­age did pro­vide $21 bil­lion for renew­ables, but that sup­port bare­ly began to lev­el the play­ing field that has tilt­ed in favor of oil and gas for 100 years and coal for more than 200.

To read the full arti­cle, vis­it HUFFPOST