U.S. Energy Subsidies Shift While Fossil Fuel Revenues Tank
U.S. energy subsidies declined and shifted focus from 2010 to 2013, and falling oil prices have cut into tax revenues in major oil-producing states, the Energy Information Administration reported last week in two separate releases.
In its review of “direct federal financial intervention” in energy, the EIA compared 2013 subsidies with activity in 2010, the height of spending under the 2009 American Recovery and Reinvestment Act. It found that total subsidies declined 23%, from US$38 to US$29.3 billion, with fossil fuels receiving marginally less support, biofuels and conservation receiving far less, low-income home energy assistance falling significantly, wind getting marginally more, and solar booming.
Like this story? Subscribe to The Energy Mix and never miss an edition of our free e-digest.
“The government revised tax credits for a growing solar power industry, allowing subsidy applicants to receive grants in lieu of tax credits,” the EIA reports. The Section 1603 grants, which increased by nearly $4 billion between 2010 and 2013, “were one of the few energy subsidy programs created by the Recovery Act that still had a substantial budgetary impact by FY 2013.”
On the fossil fuel side, meanwhile, the IEA found that four of the top five oil-producing states received less tax income because of plummeting oil prices. Revenues fell 40% in Texas, about 30% in Oklahoma, 21% in North Dakota, and 76% in Alaska, which saw its monthly receipts fall from US$108 million in August 2014 to US$26 million in January 2015.
“Alaska relies on revenue from crude oil production for 90% of its operating budget,” the EIA noted. “The state’s 2015 revenue projections assumed oil prices at $105 per barrel.”