Featured Research

from universities, journals, and other organizations

US Tax Breaks Subsidize Foreign Oil Production, Study Finds

Date:
September 18, 2009
Source:
Project on Emerging Nanotechnologies
Summary:
The largest US subsidies to fossil fuels are attributed to tax breaks that aid foreign oil production, according to new research. The study, which reviewed fossil fuel and energy subsidies for Fiscal Years 2002-2008, reveals that the lion's share of energy subsidies supported energy sources that emit high levels of greenhouse gases.

The largest U.S subsidies to fossil fuels are attributed to tax breaks that aid foreign oil production, according to research to be released on Friday by the Environmental Law Institute (ELI) in partnership with the Woodrow Wilson International Center for Scholars. The study, which reviewed fossil fuel and energy subsidies for Fiscal Years 2002-2008, reveals that the lion's share of energy subsidies supported energy sources that emit high levels of greenhouse gases.

Related Articles


The research demonstrates that the federal government provided substantially larger subsidies to fossil fuels than to renewables. Fossil fuels benefited from approximately $72 billion over the seven-year period, while subsidies for renewable fuels totaled only $29 billion. More than half the subsidies for renewables—$16.8 billion—are attributable to corn-based ethanol, the climate effects of which are hotly disputed. Of the fossil fuel subsidies, $70.2 billion went to traditional sources—such as coal and oil—and $2.3 billion went to carbon capture and storage, which is designed to reduce greenhouse gas emissions from coal-fired power plants. Thus, energy subsidies highly favored energy sources that emit high levels of greenhouse gases over sources that would decrease our climate footprint.

The U.S. energy market is shaped by a number of national and state policies that encourage the use of traditional energy sources. These policies range from royalty relief to the provision of tax incentives, direct payments, and other forms of support to the non-renewable energy industry. "The combination of subsidies—or 'perverse incentives'— to develop fossil fuel energy sources, and a lack of sufficient incentives to develop renewable energy and promote energy efficiency, distorts energy policy in ways that have helped cause, and continue to exacerbate, our climate change problem," notes ELI Senior Attorney John Pendergrass. "With climate change and energy legislation pending on Capitol Hill, our research suggests that more attention needs to be given to the existing perverse incentives for 'dirty' fuels in the U.S. Tax Code."

The subsidies examined fall roughly into two categories: (1) foregone revenues (changes to the tax code to reduce the tax liabilities of particular entities), mostly in the form of tax breaks, and including reported lost government take from offshore leasing of oil and gas fields; and (2) direct spending, in the form of expenditures on research and development and other programs. Subsidies attributed to the Foreign Tax Credit totaled $15.3 billion, with those for the next-largest fossil fuel subsidy, the Credit for Production of Nonconventional Fuels, totaling $14.1 billion. The Foreign Tax Credit applies to the overseas production of oil through an obscure provision of the U.S. Tax Code, which allows energy companies to claim a tax credit for payments that would normally receive less-beneficial treatment under the tax code.

ELI researchers applied the conventional definitions of fossil fuels and renewable energy. Fossil fuels include petroleum and its byproducts, natural gas, and coal products, while renewable fuels include wind, solar, biofuels and biomass, hydropower, and geothermal energy production. A graphic chart that will be released on Friday presents general conclusions about the overall subsidies for fossil fuels versus renewables other than corn-derived ethanol. Nuclear energy, which also falls outside the operating definition of fossil and renewable fuels, was not included.


Story Source:

The above story is based on materials provided by Project on Emerging Nanotechnologies. Note: Materials may be edited for content and length.


Cite This Page:

Project on Emerging Nanotechnologies. "US Tax Breaks Subsidize Foreign Oil Production, Study Finds." ScienceDaily. ScienceDaily, 18 September 2009. <www.sciencedaily.com/releases/2009/09/090918100004.htm>.
Project on Emerging Nanotechnologies. (2009, September 18). US Tax Breaks Subsidize Foreign Oil Production, Study Finds. ScienceDaily. Retrieved December 21, 2014 from www.sciencedaily.com/releases/2009/09/090918100004.htm
Project on Emerging Nanotechnologies. "US Tax Breaks Subsidize Foreign Oil Production, Study Finds." ScienceDaily. www.sciencedaily.com/releases/2009/09/090918100004.htm (accessed December 21, 2014).

Share This


More From ScienceDaily



More Science & Society News

Sunday, December 21, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

After Sony Hack, What's Next?

After Sony Hack, What's Next?

Reuters - US Online Video (Dec. 19, 2014) The hacking attack on Sony Pictures has U.S. government officials weighing their response to the cyber-attack. Linda So reports. Video provided by Reuters
Powered by NewsLook.com
Sierra Leone Bikers Spread the Message to Fight Ebola

Sierra Leone Bikers Spread the Message to Fight Ebola

AFP (Dec. 19, 2014) More than 100 motorcyclists hit the road to spread awareness messages about Ebola. Nearly 7,000 people have now died from the virus, almost all of them in west Africa, according to the World Health Organization. Video provided by AFP
Powered by NewsLook.com
S. Leone Limits Chistmas Activities to Stem Ebola Spread

S. Leone Limits Chistmas Activities to Stem Ebola Spread

AFP (Dec. 19, 2014) Sierra Leone has launched sweeping efforts to stem the spread of Ebola in the west of the country. While church services will be allowed to go ahead over the festive period, public gatherings and entertainment have been banned. Duration: 01:10 Video provided by AFP
Powered by NewsLook.com
Obama: Better Ways to Create Jobs Than Keystone Pipeline

Obama: Better Ways to Create Jobs Than Keystone Pipeline

AFP (Dec. 19, 2014) US President Barack Obama says that construction of the Keystone pipeline would have 'very little impact' on US gas prices and believes there are 'more direct ways' to create construction jobs. Duration: 00:47 Video provided by AFP
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Science & Society

Business & Industry

Education & Learning

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins