Within the United States, the cost of energy subsidies to taxpayers is both substantial and often not properly documented. Regular review to evaluate the fiscal costs of these policies; their impact on market structure, competiveness, and environmental quality; and their ability to achieve stated goals is prudent.
My comments focus on three main issues:
The United States now produces as much crude oil as ever – over 3.4 billion barrels in 2015, just shy of the 3.5 billion record set in 1970. Indeed, the U.S. has become the world’s No. 1 oil and gas producer. The oil production boom has been aided by tax provisions and other subsidies that support private investment in infrastructure for oil exploration and development. Federal tax preferences, for example, enable oil and gas producers to deduct capital expenditures faster, or at greater levels, than standard tax accounting rules typically allow, boosting investment returns.
The US coal industry faces not just overcapacity but crippling liabilities that will outlive mine closures. Setting the industry on a viable course will require all stakeholders to step up with new ideas.
This report aims to illuminate some of the hidden costs of coal production, which Interior should account for in order to modernize the federal coal program and earn a more fair return. If Interior had used a higher royalty rate that accounts for even a fraction of the public costs of mining, it could have earned an additional $2 billion from 2009 to 2013, from coal production in four western states-Wyoming, Colorado, Montana, and Utah.
To modernize the coal program and earn a more fair return, Interior should:
There has been much discussion of fossil fuel subsidies as both an inefficient use of public tax dollars and a barrier to the scaling up of low- and no-carbon energy sources. As "green" incentives are reduced, the phase-out of fossil fuel subsidies becomes even more urgent in order to reduce market distortions and ensure a level playing field in energy markets. Developing-world subsidies to fossil fuel consumption have attracted the most attention to date. However, fossil fuels also benefit from production subsidies in both developed and developing countries.
The electric utility industry has begun an aggressive push to change energy policy in the United States to favor nuclear power. Led by the country's largest nuclear generators, Exelon and Entergy, this campaign represents what would be the single largest change in energy policy in twenty years. While their intent is to make nuclear the preferred energy source, the changes they seek necessarily go far beyond that. They would also support coal and natural gas-fired electricity generation, and block the growth of renewable energyand attempts to address climate change.
In 2013, the U.S. federal and state governments gave away $21.6 billion in subsidies for oil, gas, and coal exploration and production.
From 2009 through 2013, large U.S.-based oil and gas companies paid far less in federal income taxes than the statutory rate of 35 percent. Thanks to a variety of special tax provisions, these companies were also able to defer payment of a significant portion of the federal taxes they accrued during this period.
A number of disincentives to recycling have been frequently, especially in analyses sponsored by EPA in the late 1970's, as impeding the expansion of materials recovery. The most commonly cited examples include the tax code, federal subsidies for natural resource development, trade policies and discriminatory freight rates.
It is now clear that the federal corn ethanol mandate has driven up food prices, strained agricultural markets, increased competition for arable land and promoted conversion of uncultivated land to grow crops. In addition, previous estimates have dramatically underestimated corn ethanol's greenhouse gas emissions by failing to account for changes in land use.