Environmental Engineering Reference
In-Depth Information
You can quibble over numbers, but fossil-fuel subsidies far outweigh those for re-
newable energy. The Environmental Law Institute reckons that the US government gave
more than $70 billion worth of subsidies to fossil-fuel companies between 2002 and
2008. In that time about $2 billion went to the solar industry. US Congressman Earl
Blumenauer calculates that the government is committed to spending more than $40 bil-
lion to subsidize the fossil-fuel industry from 2011 to 2015, while no more than $10 bil-
lion is scheduled to flow into renewable-energy businesses.
Thefederalgovernmenthasalonghistoryofinvestingpublicdollarsinenergyviatax
credits, subsidies, and other incentives. The agency that tracks such things, the US En-
ergy Information Administration, found that in 2007 subsidies to nuclear were 9.6 times
higher than those for solar; natural gas and petroleum subsidies were 11.2 times higher;
and coal subsidies were 22.2 times higher. Some people think that this has changed a lot
recently due to “Obama-era stimulus spending,” but the American Recovery and Rein-
vestment Act made only small advances toward equal treatment of the technology. Even
in 2010 coal subsidies were still 20 percent higher, nuclear subsidies were 120 percent
higher, and natural gas and petroleum were 148 percent higher than solar subsides. More
importantly, 93 percent of the fossil-fuel and nuclear subsidies were permanent, whereas
almost 70 percent of the solar subsidies were temporary stimulus-bill subsidies, which
reduce the certainty that the clean-energy industry needs to attract investors.
Abetterwaytothinkaboutthesesubsidiesisinanapples-to-applescomparisonofthe
early phase of each technology's adoption. Just the first 15 years of investment in each
energy sector reveals tremendous discrepancies: $1.8 billion per year (in inflation-adjus-
teddollars)wasspentonsubsidiesforoilandgasindustriesintheirearlydayscompared
with just $400 million for all renewables, including wind and solar. And today, a hun-
dred years later, tens of billions are still spent supporting oil companies each year, even
though they've clearly established their businesses.
The problem is that, over time, fossil-fuel subsidies have been
increasing
per unit of
energyorjobscreatedratherthandecliningastheindustrymatures.Rememberthatsolar
energycreatesbetweenthreeandseventimesasmanyjobsasfossilfuels.Asmentioned,
many of the fossil-fuel subsidies have also become permanent, such as the tax credits
grantedtoAmericangas-andoil-drillingindustries,whichusethemoneytofinancetheir
wildcat and fracking forays; this reduces their innovation drive.
And all the while, the companies behind these efforts have been increasingly prof-
itable: ExxonMobil was the most profitable corporation in history for much of the
2000s. So it's receiving government money while making exorbitant profit. And since
the mid-2000s it's been shedding jobs; indeed, Big Oil downsized its workforce by more
than10,000inthesecondhalfofthiscentury'sfirstdecade.In2010alonethetopfiveoil
companiesreducedtheirglobalworkforcebyacombined4,400employeeswhilemaking
