Report Finds Oil Subsidies Higher Than Ethanol

Cindy Zimmerman

A new report from the Environmental Law Institute (ELI) finds that federal subsidies for fossil fuels are twice that of renewables.

environmental law instituteAccording to a summary on the ELI report store website:

The largest U.S subsidies to fossil fuels are attributed to tax breaks that aid foreign oil production, according to research released by ELI. The study, which reviewed fossil fuel and energy subsidies for Fiscal Years 2002-2008, reveals that the lion’s share of energy subsidies supported energy sources that emit high levels of greenhouse gases. Fossil fuels benefited from approximately $72 billion over the seven-year period, while subsidies for renewable fuels totaled only $29 billion.

The report found that about $16.8 billion in subsidies went to corn-based ethanol over the seven year time frame with most of that coming from the blenders tax credit.

ELI Senior Attorney John Pendergrass says the report indicates a lack of support for more environmentally friendly energy sources. “The combination of subsidies—or ‘perverse incentives’— to develop fossil fuel energy sources, and a lack of sufficient incentives to develop renewable energy and promote energy efficiency, distorts energy policy in ways that have helped cause, and continue to exacerbate, our climate change problem,” Pendergrass said in a press release. “With climate change and energy legislation pending on Capitol Hill, our research suggests that more attention needs to be given to the existing perverse incentives for ‘dirty’ fuels in the U.S. Tax Code.”

Download the report for free here.

Environment, Ethanol, Ethanol News, Government