Subsidies provided to oil companies in the United States have been a contentious issue for many years, with critics arguing that these subsidies are a form of corporate welfare that benefits already profitable companies. On the other hand, proponents of these subsidies argue that they are necessary to support domestic energy production, create jobs, and maintain energy security.
For the years 2021,2022, and2023, the government subsidies provided to oil companies in the United States have remained relatively consistent. According to data from the Environmental and Energy Study Institute (EESI), the estimated value of subsidies for oil and gas production in the U.S. was $20.5 billion in 2021, $21.1 billion in 2022, and is projected to be $21.8 billion in 2023. These subsidies come in the form of tax breaks, direct payments, and other incentives designed to support the exploration, production, and distribution of oil and gas.
The reasons for these subsidies vary from country to country, but generally include supporting domestic energy production, maintaining energy security, and promoting economic growth. However, these subsidies also have negative impacts on the environment, as they encourage the production and consumption of fossil fuels, leading to increased greenhouse gas emissions and contributing to climate change.
In terms of economic impact, subsidies to oil companies can distort markets, create inefficiencies, and hinder the development of renewable energy alternatives. Additionally, subsidies can also exacerbate income inequality by disproportionately benefiting wealthy oil companies at the expense of taxpayers.
There is ongoing debate and controversy surrounding the necessity and effectiveness of subsidies to oil companies. Critics argue that these subsidies should be phased out in favor of investments in renewable energy and energy efficiency. Proponents, on the other hand, argue that these subsidies are essential for maintaining energy security and supporting domestic energy production.
Whatever the reasons, the 20 plus billions given to the domestic oil companies would not have been necessary as they could have easily satisfied these reasons with their own record profits as shown by the charts from STATISTA;