Looking at the history of American energy subsidies

The report, “What Would Jefferson Do,” from DBL Investors, is among the first and best attempts to make an “apples to apples” comparison of federal incentives for fossil fuels, nuclear and renewable sources of energy, like wind power and solar power.

The fact that oil and gas have received more than 75 times the total cumulative dollar amount of federal subsidies that renewables have may not be terribly surprising ($446.96 billion vs. $5.93 billion, see below). Oil was first commercially produced in Titusville, PA in 1859, giving it more than a century head start on renewable sources of energy.

What may surprise some is that the study finds “that current renewable energy subsidies do not constitute an over-subsidized outlier when compared to the historical norm for emerging sources of energy. For example: … the federal commitment to [oil and gas] was five times greater than the federal commitment to renewables during the first 15 years of each [subsidy’s] life, and it was more than 10 times greater for nuclear."

In other words, if you zoom in and look at the federal support for all energy sources in their infancy, renewables actually receive far less support than did fossil fuels or nuclear energy at a similar point in their development. In fact, oil and gas subsidies were far greater than the more modest federal support renewable sources of energy receive today, even when those oil and gas supports were at historic lows during the Great Depression.

The report concludes, “Looking at the history of American energy subsidies, a strong case can be made that in order to drive the next generation of energy technology, the federal government needs to continue its support for renewables, in line with our historical commitments to innovation.” We couldn’t have said it better ourselves.

Jon Goldstein, American Wind Energy Association Director of Public Affairs, www.awea.org/blog/

http://www.dblinvestors.com/documents/DBL_energy_subsidies_paper.pdf