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Fossil Fuel Subsidies Dwarf Support For Renewables 172

Posted by Soulskill
from the hedging-against-a-massive-sunlight-spill-in-the-gulf dept.
TravisTR sends word of research from Bloomberg New Energy Finance which found that direct subsidies for renewable energy from governments worldwide totaled $43-46 billion in 2009, an amount vastly outstripped by the $557 billion in fossil fuel subsidies during 2008. "The BNEF preliminary analysis suggests the US is the top country, as measured in dollars deployed, in providing direct subsidies for clean energy with an estimated $18.2bn spent in total in 2009. Approximately 40% of this went toward supporting the US biofuels sector with the rest going towards renewables. The federal stimulus program played a key role; its Treasury Department grant program alone provided $3.8bn in support for clean energy projects. China, the world leader in new wind installations in 2009 with 14GW, provided approximately $2bn in direct subsidies, according to the preliminary analysis. This figure is deceptive, however, as much crucial support for clean energy in the country comes in form of low-interest loans from state-owned banks. State-run power generators and grid companies have also been strongly encouraged by the government to tap their balance sheets in support of renewables."
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Fossil Fuel Subsidies Dwarf Support For Renewables

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  • No Surprises Here (Score:5, Insightful)

    by WrongSizeGlass (838941) on Saturday July 31, 2010 @08:24AM (#33094642)
    The fossil fuel industry has a lobbing campaign that dwarfs that of renewable energy. 'nuf said.
    • by c6gunner (950153) on Saturday July 31, 2010 @09:30AM (#33094902)

      The fossil fuel industry has a lobbing campaign that dwarfs that of renewable energy. 'nuf said.

      Ah, yes, it's all about the lobbyists. It can't have anything to do with the scale difference between the renewable energy industry and the fossil fuel industry.

      You know what REALLY pisses me off? I, as an individual, get close to ZERO subsidies! Where's my $40 billion? I demand equal treatment!

      • Re: (Score:2, Troll)

        by tenco (773732)

        You know what REALLY pisses me off? I, as an individual, get close to ZERO subsidies! Where's my $40 billion? I demand equal treatment!

        Without subsidies your electricity bill would be larger.

        • by tompaulco (629533)
          Without subsidies your electricity bill would be larger.
          Subsidies aren't magic. They come from taxes. Without the taxes which support this subsidy and the associated bureaucratic and overhead waste, my electricity cost would be higher, but my total household cost would be lower.
      • by commodore64_love (1445365) on Saturday July 31, 2010 @10:30AM (#33095178) Journal

        I'd like to know why they include military expenses as a "subsidy" for fossil fuels. We don't have to use the military to get oil from Iran or Iraq - we could buy it from friendly countries like Canada, UK, Russia.

        Also renewable energy like solar cells, hydroelectric, and so on need military protection as well (from invasion or terrorism). So the military expenses should be on that tally sheet too, but they conveniently left it off.

        • by tompaulco (629533) on Saturday July 31, 2010 @10:48AM (#33095300) Homepage Journal
          I'd like to know why they include military expenses as a "subsidy" for fossil fuels.
          Because it helps to spin the story to express the viewpoint which they would like you to believe and they hope that most people will not dig too deeply and just accept them at their word.
        • by tepples (727027)

          We don't have to use the military to get oil from Iran or Iraq - we could buy it from friendly countries like Canada, UK, Russia.

          My guess at the neocon rationale: What happens when Canada, Great Britain and Northern Ireland, and Russia start to run out?

          • Well that is logical. It makes more sense to drain countries like Venezuela and Arabia and Iran dry of oil, while you leave your own reserves untouched. Then circa 2050 you can sell your North American oil for big bucks.

        • by c6gunner (950153)

          Could have bought it from Iraq, too, instead of trying to keep them from exporting it. Everyone else was doing it, but apparently America didn't wanna be one of the cool kids.

        • We spend more than all the other nations of the world COMBINED on our military and other defense. We need to shift that money elsewhere or at least try to conquer the world so we have something to show for it. Apparently we are doing the latter, but they are doing a damn poor job of it.
        • by sjames (1099) on Saturday July 31, 2010 @01:56PM (#33096424) Homepage

          Yes, but the oil companies do like the cheaper higher grade stuff from the Middle East. Why in the world else would we be so involved in the Middle East decade after decade while refusing to intervene in places that actually ASK for our help?

          Every country needs protection from invasion and has a military to deal with that. None of them spend anywhere near as much of their national budget on it as we do. If all our military had to do was protect us from invasion, they wouldn't be dropping so many of those million dollar smart bombs today. You seem to be desperately clutching at straws here.

          • We've been involved in the Mideast since World War 1. It had nothing to do with oil, but as part of the anti-Germany campaign. Then we withdrew and returned again during WW2, and we never bothered to withdraw. Instead we decided to become Israel's ally and protector.

            And now we're "stuck" there. Even if we discovered our way to run our cars on hydrogen, we'd still be involved in the Mideast because we stupidly stick our noses (and bases) where they don't belong (Mideast, EU, Russia, Japan, China).

        • While it's hard to say exactly how much goes into it, the US has protected the interests of business both overtly and covertly.

          Iran was about oil. http://en.wikipedia.org/wiki/1953_Iranian_coup_d'état [wikipedia.org]

          Guatemala was about bananas (and communists). http://en.wikipedia.org/wiki/1954_Guatemalan_coup_d'état [wikipedia.org]

          When Brazil was making overtures to Cuba, US reduced aid. A military coup eventually happened and the US immediately recognized the new government and loaned them money. http://en.wikipedia.org/wiki/ [wikipedia.org]

        • by Doc Ruby (173196)

          Except we don't just buy oil. We spend $TRILLIONS keeping the global oil production set up the way it is, enforced by our military. Then we buy it in the market we create with that military. So we do both. Meanwhile, our constant wars (and wars by proxy, eg. in Israel) keep the market prices high, though the cost to the producers themselves is low.

          The cost of protecting renewable energy is very small. The military/intel budget would need to be only $150-200B annually for everything ($200B / everything), but

          • by Phil-14 (1277)

            Ah, so Joe Stripper Well Operator in Oklahoma should be paying more in royalties (or closing down his well, the more likely course of action) because even though the lower royalties mean it stays open and the government _gets_ more money than if it closed, we're going to call that "subsidies" and say he's not paying his fair share of the military costs involved with us buying the oil from Iraq instead of Oklahoma...

            • by Doc Ruby (173196)

              Your convoluted argument says:

              1: I said operators should be paying more in royalties.
              2: If oil producers paid more royalties, they'd go out of business.
              3: The government collects more money when it collects less money.

              First, I never said operators should be paying more in royalties. All I said was that, contrary to the post to which I replied, the oil industry does indeed consume a vast amount more military budget than alternatives do. Which was obvious, but the comment to which I replied tried the usual sm

        • by akb (39826)

          Before Gulf War I George HW Bush said that protecting Kuwait was in our vital national interest. What was that vital national interest? What is the vital national interest that had US troops in Kuwait, Saudi Arabia, Qatar, etc before 9/11?

          We already only get a small amount of oil that is actually shipped from the Middle East. However, since oil is a global commodity interruption in the flow from any of the major exporters would have global consequences, as we've seen whenever there's been a hint of confl

        • Maybe it's because the Military uses boat-loads of fossil fuel during it's operations, especially naval, air and air-mobile ops. Still it seems hookey to include military ops as a subsidy for FF industry. It also seems that organizations coming from a political or an advocacy point of view play fast and loose with the definition of subsidy.

        • So you're completely ignoring the many and various wars that the US is currently involved in, which THE PRESIDENT (er, at the time) characterized as "securing ongoing access to oil resources".

          THAT, dear reader, is WHY "military expenses" are considered to be a subsidy for fossil fuels.
    • Re: (Score:3, Funny)

      by Hinhule (811436)

      They are lobbying to use dwarfs as the next renewable energy source?

      • Re: (Score:3, Funny)

        They are lobbying to use dwarfs as the next renewable energy source?

        Yes. Yes they are. It's a small operation, but some find it entertaining.

        • The underground kingdom of the Dwarves have superior steam technology that would "dwarf" our primitive fossil fuel technology.
      • No, the way I read the headline, fossil fuels are providing a subsidy provide renewable energy for dwarves. I didn't realize they were incompatible with existing renewable energy, but I suppose high winds at windfarms, or large waves at wavefarms, might sweep them away more easily than full-sized people...

    • Iran's government owned oil company doesn't lobby their government. That's where 1/5th of the subsidies are from - essentially price breaks for the Iranian people from the Iranian government oil company.

  • Priorities (Score:4, Insightful)

    by Voline (207517) on Saturday July 31, 2010 @08:28AM (#33094664)
    To help the now-wealthy to become yet more wealthy, or help all of humanity to avert climate disaster and live in a cleaner environment? Hmmmm decisions, decisions ...
    • by khallow (566160)

      To help the now-wealthy to become yet more wealthy, or help all of humanity to avert climate disaster and live in a cleaner environment? Hmmmm decisions, decisions ...

      Now here's the challenge. What policy actually would do what Voline wants?

    • by dkleinsc (563838)

      Leader of Senate: All fellow members of the Roman senate hear me. Shall we continue to build palace after palace for the rich? Or shall we aspire to a more noble purpose and build decent housing for the poor? How does the senate vote?
      Entire Senate: FUCK THE POOR!
      Leader: Good.

      • by TheLink (130905)
        Hey I'm all for "fuck the poor" as long as I get a say in who fucks me and the rich hot babe actually wants to :).

        But until such policies get introduced, it looks like I'll remain a poor slashdot virgin :(.
  • by Anonymous Coward on Saturday July 31, 2010 @08:53AM (#33094778)

    It would be interesting to see how the fossil fuel subsidy number was calculated. Even assuming the calculation is accurate, I'm not sure I buy the argument that renewable energy would be more economically viable than fossil fuels if not for government intervention. The article ignores taxes on fossil fuels, which I'm sure would dwarf any subsidies.

    • by WindBourne (631190) on Saturday July 31, 2010 @10:35AM (#33095210) Journal
      Not even CLOSE to accurate.
      How much money is paid for the right to DUMP pollution in the air in the burning? Nothing. We have a couple of 100 fires in old coal mines that the company that created the mine does not have to stop (too expensive). Both pollutions are HUGE. And how much is paid to offset it? Nothing by the power companies.

      How much money is paid by Power companies for the right to send out mercury? The vast majority of mercury that is emitted by man is from power plants. In fact, out here in West USA, nearly all of the mercury in our waters come from power plant emission, or in a few areas, from old mining tailings.

      The money that BP will pay for the gulf is but a fraction of the damage that it caused. Exxon paid very little of the clean-up in Alaska. And Nigeria has large amounts of environmental damage, all caused by oil companies that do not care about spills.

      In addition the taxes that will be paid on the oil that will likely be sold elsewhere (such as Alaska oil) is a pittance compared to how much we are stealing from out children.

      Finally, the thought that we burn oil is just amazing to me. Oil truely is one of the worlds wonder chemicals. It permeates our society in every aspect. Yet, we throw away the majority, and really do not pay but a fraction of the real costs of burning oil and coal. It is time to stop this for our national security.
    • by BigSlowTarget (325940) on Saturday July 31, 2010 @10:37AM (#33095220) Journal

      A quick search found this $557 billion is primarily from China, Venezuela, Egypt Iraq and Iran consumer subsidies. When the government owns the oil company the subsidy is not making the owner rich. It might help the less well off more than the better off through reduction of gas costs but study results seem mixed.

      http://www.businessweek.com/news/2010-06-07/ending-fossil-fuel-aid-will-cut-oil-demand-iea-says-update1-.html

      The number $557 came from the IEA

      http://www.iea.org/files/energy_subsidies.pdf

    • by rbrander (73222) on Saturday July 31, 2010 @12:20PM (#33095834) Homepage

      The taxes on oil primarily are taxes on gasoline and diesel for consumer use - as farmers know, industrial use is not so much. The taxes on coal are a joke. I googled the words "taxes coal" and came up with this news story from Tennessee, 2008:

      "The state coal tax is currently set at 20 cents per ton and has not been increased since 1984.

      As introduced, the bill would have set the tax at 4.5 percent of gross value, which Jackson said is the same rate charged in neighboring Kentucky. Members of the Senate Tax Subcommittee suggested the levy was too high at an earlier meeting and presented an amendment Tuesday that calls for a two-step increase to 3 percent." ...while that $557B comes to about 14% of worldwide spending on oil & coal, based (roughly) on the Wikipedia articles.

      I'm sure that on the whole, more is taken from than given to the fossil-fuel industries, but the subsidies, as another poster mentioned mostly in Asia, mean that world-wide, the "pressure" on the whole industry is much lighter than most would assume.

      It's not that renewables are economically viable in any situation where the fossil-fuel industries don't have to pay for their externalities; it's a way of highlighting that far from bringing in those externalities in the form of a tax or fund or cap or any other restriction, we are taxing their use at all, very lightly.

      The moment all the subsidies stop and something like $50/T (C) is imposed on digging or pumping carbon out of the ground (and $50/T is paid to those who put it in), the game is pretty much up for fossil, save where gas/kerosene/diesel are the only way to go for high-energy density (aviation, remote cabins).

      Subsidies are not just there because of lobbying and power, though - subsidizing cheap energy is a great economic stimulus in general, which is why you find it in new, growing, developing economies especially. Which is the heart of the warming issue: if "saving the world" involves telling a couple of billion Asians to spend an extra generation in poverty, is it worth it?

    • Add in the cost of the Iraq and Afghan wars and fossil fuel subsidies will dwarf anything.
    • by T Murphy (1054674)
      Mentioning taxes, wind turbines in the US currently get highly favorable depreciation rules, which I expect are not accounted for in the numbers in the article. Given just in Indiana I've seen several new, large wind farms (and they're still building), I expect the indirect subsidy with the depreciation is a considerable number. (If someone does the research on this, mod him up).
  • The article gives almost no information about what the funding is used for other than: renewable good, fossil fuels bad. If you look at the current renewable power production in the US [doe.gov] it is 7% of the total and coincidentally the total funding worldwide for renewable energy is roughly 7.5%. While you can argue about giving more funding to renewable energy, they article gives zero information about what the money is used for. The funding could have been used for implementing cleaner technology on existin
  • That is the sad part. We say that we want one thing, while our subsidies are helping large corps with large lobbyists, while paying very little to what would help America. Compound that with 1/2 of the money of the AE world going to Ethanol. That was a payout to farmers by neo-cons in HOPES that they would get votes. Obama needs to show some backbone and change this.

    My suggestion has been, and will remain, that Obama/Congress need to change these subsidies to not favor any one company or arena, but to ta
  • Relative (Score:4, Insightful)

    by kamukwam (652361) on Saturday July 31, 2010 @09:36AM (#33094936) Journal
    This might be true, but if you compare it to which fraction of our total energy production is renewable, then renewables get relatively more fuel subsidies than the fossil fuels.
    • Re:Relative (Score:5, Interesting)

      by WindBourne (631190) on Saturday July 31, 2010 @10:02AM (#33095050) Journal
      Of course, when you compare to what Coal and Nukes got in their beginning, this is absolutely NOTHING. Both Coal and Nuke power got HUGE subsidies in their early days. Which is exactly why they remain at the top on these. Which is also, why I have suggested changes to our subsidies structures for years.
      • by T Murphy (1054674)
        It depends. We've needed lots of new power plants in the past few decades, so subsides for high-output plants was important. Renewable power is only just starting to be a viable major power source- most government funding towards renewable should still be focused on research. Indiana has hundreds if not thousands of turbines erected or being erected, for example, so renewable power isn't being neglected (I don't know about elsewhere, I just see these turbines a lot). The problem is wind and solar are only g
  • I mean.. coal is bio-energy. Oil is bio-energy. The remnants of bio-mass that never made it to the sky, but whose carbon dioxide instead was stored in the ground by nature herself, process commonly known as "natural sinks". How can it be healthier for the planet to burn off bio-mass before it even gets a chance to sink or be "filtered" through various other life forms? I would have thought the production of bio-mass in sum cause as bad outlets of CO2 as oil. Not to mention the harm it does to various specie

    • by piotru (124109) on Saturday July 31, 2010 @09:59AM (#33095038) Homepage Journal

      Maybe off point, but with my wife we used to joke: if the color is green, it must be healthy.
      Last year we went to a vineyard in France, where the owner explained he had not applied for the "Bio" label because he used modern selective fungicides, thus his soil is alive. The "Bio" use copper sulfide at such quantities as to completely eradicate the microbial life from their soils. I prefer not to think what they drink from their wells. As agricultural engineer I think this case of "Bio" is entirely harmful.

    • It's all solar in the end right...just converted to chemical energy. I've read up on the intricacies of bio-fuel and on the whole I'm against it. The trouble is the long term environmental impact of land based fuel crops is horrendous...and all we get is a net neutral in terms of CO2...suck it out of the sky...put it back in.

      Algae offers much in terms of land use but little in terms of the CO2 neutrality problem. Much more research needed; don't believe the hype.

      I'm for the establishment of a fully electric

  • by redelm (54142) on Saturday July 31, 2010 @10:05AM (#33095070) Homepage

    If you're a greenie, you'll like this rah-rah study. Maybe you need some re-energization.

    However, if you're not, maybe you'd like to know exactly _how_ true numbers have been distorted:

    Dollar-wise, the biggest distortion is to consider road maintenence and building as a subsidy. This is slippery, since the substantial fuel taxes were justified and accepted by the voters on the basis they would pay for roads. Most places, the road funds are in surplus and contribute to general revenue, not draw from it.

    Another large item in the US, but totally unaccounted is the oxygenated gasoline regulations. In many areas, the (obsolete and ineffective) legal requirement is for gasoline to contain 2% oxygen, earlier met with MTBE (which doesn't biodecompose fast enough) and now met with ethanol. In addition to the $1.50/gal direct subsidy, this legal requirement puts a demand floor under deathanol. How much is it worth? Who knows, but probably a large fraction of the direct subsidy.

    Accounting for electricity is tough -- renewables use the same grid, and so anything is common. But renewables have poor reliability characteristics, so regs like equal buy/sell price actually are an uncounted subsidy. They certainly require more standby generation.

  • So according to Wikipedia, approximately 7.3% of electric power in the United States comes from renewable energy. According to this article, approximately 7.4% of the total subsidies were allocated to renewable energy.
    Oh, and let's not forget that they are including bogus "subsidies" such as military costs in the equation.
    • Please show where military costs are considered part of the equation.
      Because US military alone was budgeted 663 billion in 2010 (though spent something like .9T).
    • Even assuming what you're saying is 100% true, the implication of that is that the current scheme of subsidies MAINTAINS THE STATUS QUO and DOES NOTHING to encourage development of renewable energy sources.

      If you want to *encourage* something, you need to MASSIVELY weight the equations EITHER FOR OR AGAINST. A policy of "weighting" (via subsidies) things equally is literally a waste of money, while *appearing* to do something for renewable (look see how much money we spend subsidizing it)?.
  • by WindBourne (631190) on Saturday July 31, 2010 @10:57AM (#33095366) Journal
    Here is a pretty little graphics for American subsidies. [rickmunoz.com]
    Now, here is where you can get the study. [eli.org]

    What this shows is just 6 years. It does not show the money that was originally put into many of these programs. For example, Nuke had LOADS of R&D done by the feds. Still does. And it still needs more (hopefully this time, the feds will not stop the IFR project that has been quietly started at UIUC; GD kerry for pushing it and CLinton for not having enough backbone to say no). And Coal had LOADS of fed and state assistance to get started. Free land; loads of pollution with zero clean up (see pix of eastern aChina to get an idea of what some parts of America was like in the 60's).

    Even now, the subsidy that is being calculated in the above study has NOTHING about the air, water, and ground pollution that is allowed. If burning coal and oil had to pay for their pollution in all these areas, then they would quickly run to the top in terms of costs. WELL OVER Solar PV (which today is the current king of costs).
    • by Solandri (704621)

      Hate to rain on the parade, but if you compare that graphic to a breakdown of energy sources [doe.gov], it's pretty obvious renewables are getting a much larger subsidy per unit of energy produced. I dunno why people who make charts like yours insist on comparing numbers in such a skewed way. It's like claiming the Johnsons with a food budget of just $250/mo are somehow more frugal than the Smiths who have a food budget of $750/mo. Leaving out the fact tha

      • Yes, AE is getting more subsidy on a per watt item. HOWEVER, when Nukes, Coal, and Natural gas were started as energy production, they got a LOT more than this. Once the installed wattage is up, then the subsidy/watt drops.
  • Why do dwarves need renewable energy subsidies?
    • Because they have relied too long on their current steam technology and have gutted their underground kingdom of its coal resources.
  • If you include the cost of our presence in Iraq, the oil subsidy dwarfs imagination.

    (And if you don't think our presence in Iraq is about oil, then I have a bridge to sell you that was highly subsidized by the city of London.)

    • by Phil-14 (1277)

      And an independent well operator in Oklahoma is benefitting from the US occupying Iraq, how?

      All the US military presence abroad does is save y'all from the consequences of the nickel-and-diming-to-death that's been done to domestic oil and gas over the past twenty years.

    • If you include the cost of our presence in Iraq, the oil subsidy dwarfs imagination.

      You are aware that the US gets most of its oil domestically, from Canada, and Mexico? Most of the Middle East oil ends up in Europe and Asia, not the US. The US gets about 15% of all its petroleum from the Middle East, and about 4% from Iraq.

      And in Iraq, the biggest share (about 80%, IIRC) of drilling rights issued to foreign companies went to non-US companies... If we're there for oil, it's for oil for other countries, not the US.

  • by Chris Mattern (191822) on Saturday July 31, 2010 @08:01PM (#33098488)

    What about elf support?

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