Some Notes on Energy Subsidies

Here are some data taken from the US Energy Information Administration’s report Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2010.

The following table is excerpted from the EIA report’s Table ES4, and it shows the amount of subsidy that each energy source received along with the per centage of the total of nearly $12 billion in subsidies handed out that each energy source received.

2010 Total (millions)

Share of Total Subsidies and Support

oal $1,189 10.0%
Natural Gas and Petroleum Liquids $654 5.5%
Nuclear $2,499 21.0%
Renewables $6,560 55.3%
    Biomass $114 1.0%
    Geothermal $200 1.7%
    Hydropower $215 1.8%
    Solar $968 8.2%
    Wind $4,986 42.0%
$75 0.6%
Transmission and Distribution $971 8.2%
Total $11,873 100%


This table, excerpted from the report’s Table ES5, gives an indication of the relative amount of energy we taxpayers are receiving for our subsidy.

Share of 2010 Generation (percent)

Coal 44.9%
Natural Gas and Petroleum Liquids 25.0%
Nuclear 19.6%
Renewables 10.3%
    Biomass Power 1.4%
    Geothermal 0.4%
    Hydroelectric 6.2%
    Solar 0.0%
    Wind 2.3%
Total 100.0%


Notice that: coal, natural gas, and oil get 15.5% of the total subsidies while producing nearly 70% of our nation’s energy; renewables get over 55% of the subsidies and produce just 10% of our energy.

As the Wall Street Journal tells us that DoE, which owns the EIA,

…warned that “Focusing on a single year’s data does not capture the imbedded effects of subsidies that may have occurred over many years” for other energy sources.

Of course.  Because if we did consider such things, we’d have to notice that renewable energy subsidies have been costing taxpayers for 40 years—since the ’70s—with next to nothing to show for it.

“Get rid of the subsidies for the fat-cat oil and gas companies,” says Democratic Presidential Candidate Barack Obama.  Ignoring the snide tone of his remark (albeit paraphrased by me), I agree—get rid of the oil and gas company subsidies.  Get rid of the alternative energy subsidies, too.  If the (renewable) energy industry cannot survive in the market on its own, this simply demonstrates that the industry isn’t ready for the market.

At least the oil and gas and coal companies, with their subsidies, are generating actual electricity, though: look at solar—it’s getting 8% of the total subsidies handed out, and generating no electricity (can you say, “Solyndra?”).  Not a watt, except for rounding error to get to that zero.

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