NCPA - National Center for Policy Analysis

Oil Industry Receives Few Subsidies, Say Experts

February 28, 2001

The largest players in the petroleum industry enjoy fewer government benefits than most people suspect -- and they would actually be better off with less government intervention in energy markets. So concludes a new study by energy economist Ronald J. Sutherland. Entitled, "'Big Oil' at the Public Trough? An Examination of Petroleum Subsidies," it was published by the Cato Institute.

Here are a few of its conclusions:

  • The oil industry is not a "net beneficiary of government subsidies" -- and, in fact, the opposite is true.
  • According to Energy Information Administration data, total energy industry subsidies were $6.2 billion -- or about 1 percent of total energy expenditures -- in 1999.
  • Of that, only $567 million went to oil companies -- far less generous than preferences and subsidies provided to rival businesses and technologies, such as mass transit and alternative fuels.
  • On a per-unit basis, the oil industry receives less real subsidy than any other fuel industry.

Source: Ronald J. Sutherland, "Big Oil at the Public Trough? An Examination of Petroleum Subsidies," Policy Analysis No. 390, February 1, 2001, Cato Institute, 1000 Massachusetts Avenue, Washington, D.C. 2001, (202) 842-0200.


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