U.S. Federal Energy Subsidies Visualized

15 by Timothy Hurst on March 8, 2010

Source: Environmental Law Institute

One of the most persistent arguments coming from those who oppose renewable energy subsidies is that they could never stand on their own without government intervention and that we should let the market decide which electricity source is best. A complete analysis of the problems with that argument are beyond the scope of this post, but one thing that is too often overlooked is the fact that fossil fuels receive a tremendous amount of federal support, an amount that has traditionally dwarfed the supports given to renewables like solar, wind and geothermal.

The above graphic circulated around the internet last fall and I apologize if you have seen it enough, however, it stands as an important reminder of where we were and how far we need to go for true parity in the marketplace. And while the feds have ramped-up investment in renewables and President Obama has proposed eliminating federal subsidies for fossil fuels in his 2011 budget, the billions of dollars spent on securing and protecting our oil interests in the Middle East means that the federal energy subsidy scales will likely still tip in favor of the fossil fuel industry for the foreseeable future.

So next time you hear the argument that renewables cannot stand on their own without massive tax subsidies, remember this graphic.

Miriam

Would be nice if you told us, which country you are talking about…

Timothy B. Hurst

The United States.

Zach

great image! i’ve been wanting to see someone put that out in such a form (didn’t seen this before now). great stuff. such an unacknowledged issue
Zufechten

If you show it as subsidy dollars per kilowatt produced, what does the graph look like?

It may be hard to quantify, but it would also be interesting if you counted uncompensated social, environmental and health damage as a subsidy. If you think about it, it is a sort of subsidy.

Timothy B. Hurst

Zufechten-

You make a valid point about making a comparison based on the amount of subsidy per unit of energy produced. I’m working on finding something…

But what I was really trying to show was that fossil fuels are not only cheap because the market dictates the price, there are healthy federal subsidies keeping the fossils going… And as I mention in the piece (and you allude to in your comment), the graph doesn’t really capture the social costs of fossil fuels.

Thanks for your comment!

Anthony Adams

Is Nuclear energy included in the renewable or fossil fuel category? It is my understanding that they receive huge subsidies as well.
Timothy B. Hurst

Anthony, it’s my impression that nuclear is not included in the graphic for whatever reason.
andrew

*accidental premature post*

Since renewables are about 10% of energy usage, and you will notice that the fossil fuel subsidies are not even close to 10x the renewable, it’s actually renewables that are heavily subsidized.

get a grip. You make environmentalists look like idiots.
Phil

I’m working on a research project and would like to see this on a percentage basis. In trying to be objective as possible, I’m concerned that this graphic does not consider the existing energy mix. I’d love to see a graphic that looks at federal subsidy per megawatt generated (fossil vs. renewable) and another graphic needs to consider subsidies for fossil vs. renewable in the mobility sector, which would be very challenging to capture. That said, total dollars spent do not tell a complete story.

http://ecopolitology.org Timothy B. Hurst

Phil-

You’re right, total dollars spent does not tell the complete story. But it tells a story nonetheless. In terms of your quest for a comparison of subsidies based on $ spent per MW of output, such data does exist, although I haven’t seen it presented in graphical form.

You might try poking around the EIA site — it is a wealth of knowledge.

For example, here is one chart that compares levelized cost of energy output from different fuel sources:

http://www.eia.doe.gov/oiaf/aeo/electricity_generation.html

Howard

By far the largest subsidies are for alternate energy sources – fossil fuel makes up about 90% of the fuel usage in most countries – wind, solar, biomass, biothermal, ocean tidal are subsidized far more than fossil.
It is simple – go by units consumed not by totals. Fuzzy math and thinking.
Howard

This is a second look at subsidies that might be more enlightening – by the way I am not a political scientist or sociologist – I am a geologist and professional engineer. Here is what the subsidies really amount to on the bais of per million BTUs in $ for energy other than electricity:
coal – $0.04, natural gas & oil – $0.03, ethanol & biofuels – $5.72, geothermal – $0.02, solar – $2.82.
Now let’s look at electricity generation on the same basis, i.e., $/megawat hours: coal – $0.44, natural gas and oil – $0.25, nuclear – $1.59, biomass – $0.89, geothermal – $0.92, hydroelectric – $0.67, solar – $24.34, wind – $23.37.

These are numbers published by the Energy Information Administration. If you disbelieve my numbers they are in 2007 $ and are found on the internet – “Federal Financial Interventions and Subsidies in Energy Markets 2007.

I hope this will be helpful in explaining to the readers the actual cost of subsidies based on usage and not total $. There is a great deal of difference.
Zufechten

Howard, would you happen to have any more recent info?