Budget hawks: Does US need to give gas and oil companies $41 billion a year?
As President Obama and Congress look for budget cuts, some experts say federal energy subsidies are ripe for trimming. Among oil companies, nuclear power, and coal, who gets what from US taxpayers?
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The number is significant, but still little more than one-tenth of the federal subsidies that oil and gas companies might receive over 10 years. Adjusted for inflation, they currently receive about $41 billion in annual subsidies annually. That amounts to more than half – 52 percent – of total benefits distributed to energy sectors by the federal government.Skip to next paragraph
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Coal: $8 billion
In second place among fossil fuels, the US coal industry reaps about $8 billion in subsidies annually – or about 10 percent of total federal largess. This includes tax breaks, as well as hundreds of millions of dollars on research into carbon capture and storage.
Those figures mean that subsidies to industries involved in fossil fuels total about $52 billion when adjusted for inflation – about two-thirds all federal energy subsidies.
Nuclear: $9 billion
Even though it's been decades since a new nuclear power plant began construction, nuclear power in the US gets about $9 billion annually in federal subsidies. This money is embedded in federal decommissioning and waste management policies, as well as research and development at the nation's national laboratories.
The Wall Street Journal survey showed that 57 percent of Americans favor chopping federal subsidies to build new nuclear power plants, a result that surprised many.
Obama's 2012 budget would let the Department of Energy triple to $58 billion the amount of loan guarantees it can grant to support the construction of nuclear power plants, nuclear watchdogs say. Taxpayers would pick up the tab for that $58 billion only if those guaranteed loans were defaulted on. But the Government Accountability Office and Congressional Budget Office have warned that is quite likely.
In a report last week entitled "Nuclear Power Still Not Viable Without Subsidies,” the Union of Concerned Scientist identified more than 30 government subsidies to the nuclear industry during the past five decades.
Ethanol: $6 billion
About $6 billion in tax credits and other favorable policies flow annually to support the ethanol industry. The amount has grown as ethanol use has increased. Credits for "advanced" cellulosic biofuels have not really kicked in yet.
Renewable fuels: $6 billion
The bulk of $6 billion in federal subsidies blow into the wind power industry, the leading renewable energy industry. Solar, biomass, geothermal and others are playing catch up.
"I suspect that the relative share of subsidies to renewables has increased more quickly in recent years than subsidies to fossil," Koplow writes in an e-mail.