NCPA - National Center for Policy Analysis

ENERGY SUBSIDIES ARE EQUAL OPPORTUNITY

November 18, 2005

Energy subsidies abound, and those that argue that their energy technology should receive more federal money to compensate for subsidies for another technology are being hypocritical, according to Thomas Tanton of the Property and Environment Research Center.

Renewable energy advocates often complain that Congress gives large subsidies to oil and gas, but too little to alternative energy, making for an unlevel playing field. However, all forms of energy, including renewables, are receiving subsidies in one way or another. For example:

  • In 1999, the oil industry received $263 million in income tax breaks, as well as $49 million in research and development; total subsidies were $312 million.
  • However, renewable energy (solar and wind power) received $15 million in income tax breaks and another $725 million in excise tax breaks, not to mention $327 million in research and development; total subsidies were $1.07 billion.
  • Electricity received the least -- $40 million in income tax breaks and only $33 million in research and development; total subsidies were $73 million.

However, these numbers do not even include "indirect," non-monetary subsidies, such as:

  • Land use preferences on federal lands for natural gas production.
  • Land-use preferences on federal lands, accelerated transmission line approval, and interconnection rules relief for renewable energy.
  • Liability limitations through the Price-Anderson Act for nuclear power plants.

In other words, there's plenty of federal dollars to go around, and the 2005 Energy Bill will dole out some $18 billion in tax breaks for energy over 10 years, says Tanton.

Source: Thomas Tanton, "Distorting the Wealth of Nature," PERC Reports 23, no. 3, September 2005, Property and Environment Research Center.

For text:

http://www.perc.org/perc.php?id=586

 

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