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When he releases his new budget in two weeks, President Obama will propose doing away with roughly $4 billion a year in subsidies and tax breaks for oil companies, in his third effort to eliminate federal support for an industry that remains hugely profitable.
Previous efforts have run up against bipartisan opposition in Congress and heavy lobbying from producers of oil, natural gas and coal. The head of the oil and gas lobby in Washington
But even as the president says he wants to do away with incentives for fossil fuels, his policies continue to provide for substantial aid to oil and gas companies as well as billions of dollars in subsidies for coal, nuclear and other energy sources with large and long-lasting environmental impacts.
Mr. Obama’s proposal rekindles a long-running debate over federal subsidies for energy of all kinds, including petroleum, coal, hydropower, wind, solar and biofuels. Opposition to such subsidies — often euphemistically referred to as incentives, tax credits, preferences or loan guarantees — spans the ideological spectrum, from conservative economists who believe such breaks distort the marketplace to environmentalists who believe that renewable energy sources will always lose out in subsidy fights because of the power of the entrenched fossil fuel industries.
David W. Kreutzer, an energy economist at the conservative Heritage Foundation, argues that the federal government should take its thumb off the scale by eliminating subsidies for all forms of energy, even it if means slowing development of cleaner-burning fuel sources.
“We would like to get rid of all subsidies,” Dr. Kreutzer said. “We know that petroleum and coal survive just fine in places where there are no subsidies. I don’t know if that’s true for wind and solar now, but someday it will be, when the price comes down.”
H. Jeffrey Leonard, president of the Global Environment Fund, a private equity firm that invests in clean-technology ventures, said that the current subsidy structure was the legacy of 60 years of lobbying and political jockeying in Washington that largely benefits oil, coal, nuclear power and corn-based ethanol. He calls for scrapping all subsidies and letting fuel sources compete on equal ground.
Mr. Obama is not willing to go that far. He has supported favored tax treatment for wind and solar power as well as a 50 percent increase in federal research spending on other alternative energy sources. He also has proposed as much as $50 billion in federal loan guarantees for nuclear power plant construction, money he believes is needed because the private market is unwilling to assume the potential costs of a catastrophic accident.
Energy economists say that the president’s call in the State of the Union address for doubling the amount of electricity produced from cleaner technology by 2035 is designed to manipulate energy markets, forcing utilities to shift to the government’s preferred sources of energy on the government’s timetable, although leaving to them the choice of fuels.
One of the problems with the Obama energy policy is that it is strangling the domestic production of oil and gas where ever it can. From ANWR to the Western states, and offshore everywhere it is trying everything it can to make it more difficult to impossible to produce oil and gas. If it were truly looking for a grand bargain it would tie the removal of the restrictions with the removal of any subsidies.
It is true that the government makes money off of the oil and gas business. It takes in more in taxes on every gallon of gas than the oil companies who take the risk and produce it do. It takes in even more in royalties on extraction of federal lands and offshore wells. In the areas it has locked off from drilling there is over a trillion dollars in royalties also locked up. You would think they would in a sane world be developing those resources. We are going to burn the same amount of oil and gas anyway. It might as well be ours.
The current subsidies for "alternative" energy are a sinkhole investment. Solar currently does not save enough over the life of the investment to pay for itself, much less save money in most applications. Wind is too unreliable. They are both inefficient.
A sane energy policy would convert as much as possible to the use of natural gas and nuclear energy. Obama is unlikely to do anything that realistic. He belief in green energy appears to be faith based, since there are no facts to support it and there are examples like Spain that actually show it is a disastrous policy.
But even as the president says he wants to do away with incentives for fossil fuels, his policies continue to provide for substantial aid to oil and gas companies as well as billions of dollars in subsidies for coal, nuclear and other energy sources with large and long-lasting environmental impacts.
Mr. Obama’s proposal rekindles a long-running debate over federal subsidies for energy of all kinds, including petroleum, coal, hydropower, wind, solar and biofuels. Opposition to such subsidies — often euphemistically referred to as incentives, tax credits, preferences or loan guarantees — spans the ideological spectrum, from conservative economists who believe such breaks distort the marketplace to environmentalists who believe that renewable energy sources will always lose out in subsidy fights because of the power of the entrenched fossil fuel industries.
David W. Kreutzer, an energy economist at the conservative Heritage Foundation, argues that the federal government should take its thumb off the scale by eliminating subsidies for all forms of energy, even it if means slowing development of cleaner-burning fuel sources.
“We would like to get rid of all subsidies,” Dr. Kreutzer said. “We know that petroleum and coal survive just fine in places where there are no subsidies. I don’t know if that’s true for wind and solar now, but someday it will be, when the price comes down.”
H. Jeffrey Leonard, president of the Global Environment Fund, a private equity firm that invests in clean-technology ventures, said that the current subsidy structure was the legacy of 60 years of lobbying and political jockeying in Washington that largely benefits oil, coal, nuclear power and corn-based ethanol. He calls for scrapping all subsidies and letting fuel sources compete on equal ground.
Mr. Obama is not willing to go that far. He has supported favored tax treatment for wind and solar power as well as a 50 percent increase in federal research spending on other alternative energy sources. He also has proposed as much as $50 billion in federal loan guarantees for nuclear power plant construction, money he believes is needed because the private market is unwilling to assume the potential costs of a catastrophic accident.
Energy economists say that the president’s call in the State of the Union address for doubling the amount of electricity produced from cleaner technology by 2035 is designed to manipulate energy markets, forcing utilities to shift to the government’s preferred sources of energy on the government’s timetable, although leaving to them the choice of fuels.
One of the problems with the Obama energy policy is that it is strangling the domestic production of oil and gas where ever it can. From ANWR to the Western states, and offshore everywhere it is trying everything it can to make it more difficult to impossible to produce oil and gas. If it were truly looking for a grand bargain it would tie the removal of the restrictions with the removal of any subsidies.
It is true that the government makes money off of the oil and gas business. It takes in more in taxes on every gallon of gas than the oil companies who take the risk and produce it do. It takes in even more in royalties on extraction of federal lands and offshore wells. In the areas it has locked off from drilling there is over a trillion dollars in royalties also locked up. You would think they would in a sane world be developing those resources. We are going to burn the same amount of oil and gas anyway. It might as well be ours.
The current subsidies for "alternative" energy are a sinkhole investment. Solar currently does not save enough over the life of the investment to pay for itself, much less save money in most applications. Wind is too unreliable. They are both inefficient.
A sane energy policy would convert as much as possible to the use of natural gas and nuclear energy. Obama is unlikely to do anything that realistic. He belief in green energy appears to be faith based, since there are no facts to support it and there are examples like Spain that actually show it is a disastrous policy.
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