U.S. Fossils Gobble $20.5 Billion Per Year in Government Subsidies
Federal and state governments in the United States gave away at least US$20.5 billion per year in subsidies to oil, gas, and coal companies in 2015 and 2016, Oil Change International reveals in an analysis released yesterday.
The report documents $14.7 billion in federal and $5.8 billion in state fossil subsidies, noting that the state estimate was probably low due to limited data access. Fossils repaid this largesse with $350 million in 2015-16 campaign donations and lobbying expenses—an 8,200% return on investment.
Like this story? Subscribe to The Energy Mix and never miss an edition of our free e-digest.
“There is something deeply ironic about the Trump administration subsidizing an industry with billions of dollars which is causing climate change, which is costing billions to America and Caribbean nations from hurricane-related damage,” writes Contributing Editor Andy Rowell on the OCI blog. “But the irony gets worse. There is something morally wrong with a billionaire-led administration handing out money to rich executives, when this money could help America’s poorest and most at need.”
With the White House and Congress busily gutting funding for public services and getting started on a tax overhaul plan that tips the scales toward the wealthiest Americans, the cost to taxpayers of fossil subsidies “is equivalent to the projected 2018 budget cuts from Trump’s proposals to slash 10 public programs and services, including supports for America’s most vulnerable children and families,” Rowell adds.
“For members of Congress who consider themselves climate champions, eliminating the subsidies that drive fossil fuel expansion and climate pollution is a critical starting point,” said principal author Janet Redman, Oil Change’s U.S. Policy Director. “Every taxpayer dollar wasted subsidizing this industry takes us further from a stable climate and protecting our families from disasters made worse by climate change. No tax plan that leaves in place a $20-billion transfer of wealth from American taxpayers to one of the country’s most profitable and polluting industries can be considered credible.”
Rowell notes that permanent fossil tax breaks in the U.S., one of which is more than a century old, are seven times larger than subsidies available to the country’s up-and-coming renewable energy sector. “Repeated proposals by the Obama administration to remove some of the most damaging federal subsidies were thwarted, in large part due to the cozy relationship between Congress and the fossil fuel industry,” he writes.
“While the rest of the world moves toward a renewable energy future, dirty energy defenders in the Trump administration are using our taxpayer dollars to promote dangerous new fossil fuel development,” Redman said. “Until we separate oil and state, the dirty energy money cycle of fossil fuel contributions going into Congress and oil, gas, and coal subsidies coming out will stymie our chances at transitioning the energy sector and staving off worsening climate disasters.”