Big Oil does NOT get $4 billion in taxpayer subsidies. It gets BILLIONS MORE!

From Victor Provenzano:


Sadly, the U.S. PIRG petition to “eliminate” only $4 billion in tax subsidies to oil firms does not reflect the whole story on U.S. government aid to oil companies but rather simply follows in an uncritical manner the tax guidelines contained in the Obama administration’s recent federal budget proposal.

The $4 billion figure cited in the U.S. PIRG petition does not reflect the total amount of annual federal tax subsidies given to U.S. oil firms but rather is simply blindly supportive of an effort on the part of the president and the Democrats in Congress to win votes in the coming election while remaining, as always, on their knees before American oil lobbyists and other monied interests.

A 1998 study by Greenpeace entitled “Fueling Global Warming: Federal Tax Subsidies to Oil in the U.S.” found that there were between $5 billion and $35 billion in annual subsidies to oil companies in the U.S. depending on how one makes the calculation and hence whether or not one includes such things as U.S. grants to the Strategic Petroleum Reserve and other less visible oil-related subsidies.

Here is a key citation from the 1998 Greenpeace report: “The oil companies continue to argue that…clean power solutions are not viable in the near to mid-term. The viability of these energy alternatives must be evaluated taking into consideration the $5 to $35 billion in annual subsidies to oil documented in this study, as well as the billions in additional support flowing to other fossil fuels in the U.S. and abroad.”

On a global scale there are over $400 billion in annual subsidies given by governments to the coal, oil, and natural gas industries, the three principal carbon fuel industries listed here in the order of their respective carbon footprints per net unit of energy. When one includes the global subsidies to the nuclear power industy, this figure rises to over $600 billion annually that is currently being allowed to foster global warming, global climate change, air pollution, the undermining of public health, unconscionable strip mining, the spilling of oil at sea, mercury poisoning, as well as the next Three Mile Island, Chernobyl or Fukushima.

Ecologists should not be blindly following the Obama administration line on this issue, but rather should be calling for an end to ALL tax subsidies, whether state or federal, to carbon fuels and to nuclear power, including to the Strategic Petroleum Reserve, which U.S. oil companies, not the American tax payer, should be paying to maintain during our ongoing yet calamitously slow transition to a fully renewable global energy system.

Despite the current level of government subsidies that are being given to both the carbon fuel and atomic power industries, geothermal electrical production in the U.S. is already signficantly less expensive than electricity generated by either coal or nuclear power, which are currently the two most important sources of electrical production in the U.S. and around the world. Onshore wind is also a less expensive source of electicity than either coal or nuclear power yet U.S. and international subsidies are being allowed to distort the overall price structure of the current global energy market.

According to the U.S. Department of Energy, the United States potentially has 140,000 times the amount of geothermal energy that it would need to power the entire U.S. at the level of our current electrical demand. What is more, three states alone, Texas, Kansas, and North Dakota, have a sufficient amount of wind resources to power the entire U.S., without even taking into account the ample remainder of onshore wind resources that are available in the other states in the “U.S. Wind Corridor” extending from the north of Texas to the upper Midwest.

If the U.S were sourcing its electricity from these cheaper renewable sources—-geothermal and onshore wind—-then oil could be replaced in our transportation system by 100% renewably sourced electricity that could, at the same time, run all of our cars, buses, trucks, and trains,

Victor Provenzano, ecoconsultant
New York, NY

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