State of the Union: Cutting fossil fuel subsidies requires real change
President Obama called for ending corporate welfare to dirty energy companies, but that is easier said than done.
Wed, Jan 26 2011 at 1:25 PM
CALLING FOR CHANGE: President Obama says the fossil fule industry is doing just fine and doesn't need taxpayer handouts. (Photo: The White House/Flickr)
President Obama’s State of the Union address
was unique for several reasons, but on the energy policy side it seems especially noteworthy.
The boldest of the president’s plans is one to slash the taxpayer subsidies to the fossil fuel industry. “They are doing just fine on their own,” Obama said with a smile in front of a joint session of Congress.
Back in December when the subsidies issue came up, I used rather conservative numbers
when framing the amount of money that the fossil fuel industry receives. I wrote that, “a finding by the Government Accountability Office reveals that between 2002 and 2007 ‘tax expenditures largely go to fossil fuels: about $13.7 billion was provided to fossil fuels and $2.8 billion to renewables.’” A Bloomberg story
calculates larger connections between cooperate welfare and the industry: “Numbers compiled by the Environmental Law Institute reveal that those figures totaled $72 billion between 2002 and 2008—about $10 billion annually. Figures from [Steve] Kretzmann’s organization put annual U.S. subsidy figures to these mature technologies somewhere between $6 billion and $39 billion annually, depending on what is included in the count.”
$39 billion is a lot of money. One would think this could actually get support on both sides of the aisle, at a time when people are sitting across the old aisle. Republicans won an election on cutting spending; this would be a big cut. Much bigger than the $400 million they want to cut from the Corporation for Public Broadcasting
. As for the Democrats, this is an opportunity for them to be both fiscal hawks but also make a pro-environment vote. If all energy sources are on the same playing field, it is likely renewable would fair much better. Moreover, we have already seen studies that show a direct link
between taxpayer-funded subsidies and detrimental effects to the environment.
But, of course, there is one little fact standing in the way. There’s a bit of a direct link to oil money and members of Congress. Opensecrets.org shows
that the top 17 recipients of oil and gas lobbying money all received more than $150,000 each. The top recipient, Blanche Lincoln (D-Ark.), who is no longer a Senator, took more than $400,000. In all, individuals and political action committees affiliated with the energy industry have contributed hundreds of millions of dollars to candidates
. In 2010, oil and gas companies alone gave more than $23 million to candidates, nearly $18 million of that sum, or about 75% of it went to Republican candidates.
This is that all-important wedge that might kill the president’s proposal. Many in Congress want to cut that budget, but they don’t want the oil and gas industry to stop cutting those checks. This will come down to principles. If politicians in Washington start voting on actual principles instead of whose writing those checks, change may have finally arrived.
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