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View Diary: The war over fossil fuels subsidies (41 comments)

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  •  thank you for this diary, DWG!! (2+ / 0-)
    Recommended by:
    DWG, LaughingPlanet

    I will use it in the future to point people who think that fossil fuels are paying their fair share and renewables are over-subsidized.

    "The more the Democrats pursue the center... the further to the right the "center" moves." -fellow kossack vacantlook

    by Hopeful Skeptic on Fri Feb 18, 2011 at 05:17:07 PM PST

    •  This is the tip of the iceberg (2+ / 0-)
      Recommended by:
      LaughingPlanet, Hopeful Skeptic

      There are many subsidies at extraction for fossil fuels, including discounted lease royalty fees, water treatment, infrastructure, abandoned mines, and failed reclamation. There are subsidies of the health and environmental impacts from use and waste streams. Fossil fuels NEVER pay their way.

      Thanks for stopping by.

      Be radical in your compassion.

      by DWG on Sat Feb 19, 2011 at 01:30:29 AM PST

      [ Parent ]

      •  How can you say that (0+ / 0-)

        You're only showing one side of the balance sheet for oil&gas. What's the revenue in lease bonus, rentals, and royalties? That goes straight to the US Treasury.

        Since US only produces like 10% of fungible global oil, domestic subsidies have negligible impact on reducing the cost of oil.

        If you removed all subsidies, oil would still be cheaper than alternatives (for now), we would just produce less domestically as the marginal projects become unprofitable.

        For now - but the oil will get prohibitively expensive at some point in the future. Thats why we need to subsidize alternatives now - it's also why we should tax gasoline much higher.

        $100/bbl oil is cheap.

        If we want to quickly reduce our C footprint - we should switch from coal to cleaner burning and currently very cheap natural gas. That and tax gasoline much higher.

        •  How much did of the rent (1+ / 0-)
          Recommended by:
          Hopeful Skeptic

          on the Deepwater Horizon did BP write off? Hint:  70%

          How do tax rates for capital investments for oil and gas companies compare to other industries? Hint:  Extremely low

          How do revenues from oil in the US  compare to other countries ?

          A 2008 Government Accountability Office report found that out of 104 jurisdictions throughout the world, only 11 received a smaller portion of oil revenues than the U.S. government.

          Oil company profits are the highest of any business in the world. There is absolutely no reason that they need tax breaks, subsidies, royalty relief, deep discounts on leases, and other breaks. I have no objection to protecting the small companies working marginal wells. However, they are not the source of billions in lost revenue.

          Gas taxes do need to be raised. All of our transportation infrastructure is funded via gas taxes. Underfunding makes it difficult to maintain existing infrastructure, much less fund alternatives.

          Gas would improve C footprint if you replace coal with gas (and cut off coal mining). Unfortunately that is not going to happen without carbon taxes.

          Be radical in your compassion.

          by DWG on Sat Feb 19, 2011 at 09:51:26 AM PST

          [ Parent ]

          •  Not disagreeing... (0+ / 0-)

            with need for a good royalty and tax regime. All I'm sayin' is that us tax breaks and subsidies are not why there's a profitable oil industry. Yeah, lets have carbon taxes to pay for the externalities.

            As far as gasoline taxes go, unfortunately those taxes presently go disproportionally to highway construction in suburban and rural areas, in effect subsidizing oil-guzzling sprawl over improving densely populated urban environments that are much greener wrt carbon per capita. Not to mention that more taxes come from cities.

            We need to support our highly productive and relatively energy efficient cities over continuing our 60-year subsidizing of sprawl.

            BTW: I haven't researched it - will do in future - but the API has challenged the comparison of royalty rates with other countries because that study did not include lease bonuses which were recently over $10 billion a year. Of course, with all the offshore lease sales cancelled, that number is now zero.

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