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Fossil Fuel Subsidies Historically Considered

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“The [U.S.] oil industry was a half century old when the depletion allowance and other special tax favors were introduced regarding the relatively new area of business taxation…. The North also taxed crude oil during the Civil War, so there is an offsetting example of a penalty, not a subsidy.”

A half-truth thrown against wind and solar advocates is, ‘the fossil-fuel industries have long had subsidies, so we should have it too.’ This tit-for-tat needs historical clarity to show the difference between consumer-driven industries that really do not need tax breaks (and should not have received them) versus industries that are dependent on special government largesse to exist and grow.

In one of my LinkedIn exchanges with a climate alarmist/forced energy transformationist, my critic stated:

Rob Bradley It would appear you have never read The Prize, which for someone in the oil and gas industry is inexcusable.

And yeah, coal, gas and oil have been getting subsidies since at least the 1860s.

“Their study finds a paucity of government support for renewable energy sources compared with past government investment in coal, gas, oil, or nuclear energy sources, which helped the country transition to new energy technologies and infrastructures.”

You are just working OT to spread dis / misinformation. Why you are still at the kiddie table.

To which I responded:

Bill Davis Please refrain from the low blows and stick to the issues. I do this with you….

The oil industry was a half century old when the depletion allowance and other special tax favors were introduced regarding the relatively new area of business taxation. (Depletion vs. depletion is complicated to avoid an unconstitutional tax on business capital, BTW).

The North also taxed crude oil during the Civil War, so there is an offsetting example of a penalty, not a subsidy. (Works both ways; have to net)

The 19th century coal tariff is a subsidy for the domestic coal industry and a penalty to the UK coal industry (and domestic consumers). Tariffs on a bunch of commodities was a revenue raiser for government–not really an energy issue.

The key thing is to end all special government favors and penalties to specific industries.

Finally, I have read The Prize. Yergin’s later books explain how Enron was important in saving the US solar and wind industries and how government largesse is behind the current ‘energy transition.’

And:

Do you have a second example from the 19th century of note?
I’d say the answer is just the opposite of what you are trying to force on the reader. And with regulatory penalties, what is the net? The point: the oil, gas, and coal industries developed on their own in the market and were not enabled government treasuries.

Now, to the present. Most global subsidies are for lower gasoline and diesel prices for citizens–I certainly do not want that, and neither do you. Yes, get rid of them….

We are focused on US policy in our discussion, I believe, On a per unit basis, government subsidies for wind and solar are many times that of oil and gas.

https://www.instituteforenergyresearch.org/renewable/eia-report-renewable-energy-still-dominates-energy-subsidies/

Add subsidies for energy efficiency that go toward reducing fossil-fuel use too,

Nuclear–that is government all the way, another story.

This exchange brought me to a linked article by Jeff Johnson, “Long History of U.S. Energy Subsidies” (Chemical & Engineering News: 2011). I was curious to see the pitch that Mr. Davis was pushing so hard: Johnson’s article begins:

U.S. government subsidies for energy are as old as the nation, says Nancy Pfund, a managing partner at DBL Investors, a venture capital firm, and an anthropologist. In a recent study for DBL Investors, Pfund and coauthor Ben Healey, a Yale University economics graduate student and former Massachusetts legislative committee director, trace U.S. government energy incentives back to 1789, when leaders of the new nation slapped a tariff on the sale of British coal slipped into U.S. ports as ship ballast.

This hardly suggests that the U.S. had an energy policy, much less one predicted on subsidizing fossil fuels at the expense of renewables.

Johnson’s article continues:

Using government documents, academic papers, and a mix of other data and reports, Pfund and Healey offer a historical perspective on today’s debate over energy subsidies. Their study finds a paucity of government support for renewable energy sources compared with past government investment in coal, gas, oil, or nuclear energy sources, which helped the country transition to new energy technologies and infrastructures.

This, too, hardly makes a case for government picking winners and losers in the marketplace. And by simply dividing the taxpayer dollars per unit of energy produced would reverse the conclusion to conclude that wind, solar, and batteries are government-dependent in spades.

Johnson then gets a rather strange argument out of Nancy Pfund, who, it turns out, likes all subsidies and treats the Solyndra taxpayer-funded debacle as if it was just a dry well by an oil and gas wildcatter.

When quizzed about the Solyndra failure, Pfund says it is consistent with the history of energy transitions in America…. If anything, she argues, the study shows renewables have been undersubsidized…. “Subsidies are really the American way.”

The post Fossil Fuel Subsidies Historically Considered appeared first on Master Resource.



Source: https://www.masterresource.org/uncategorized/fossil-fuel-subsidies-historically-considered/


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