5 ms·

We don't really subsidize fossil fuels. I thought that your comment was interesting, so I looked it up. These "subsidies" are just completely normal stuff that

by burfog 7y ago

We don't really subsidize fossil fuels. I thought that your comment was interesting, so I looked it up. These "subsidies" are just completely normal stuff that ordinary American businesses get. Mostly it is tax deductions. Everybody is getting tax deductions. Everybody from your local hair salon to Microsoft is taking tax deductions. For the fuel companies this includes income tax, fees for shipping, and royalties for extracting the resources. The only really offensive one is a deduction for BP's punishment, which sort of undoes the punishment... though that is fair if the tobacco companies got to do likewise for their punishment. The rest is just the unpaid share of the cost of running various government agencies. First of all this isn't generally something the companies feel they benefit from; ditching OSHA/EPA/etc. would probably please them. Second of all, again it is something we do for all American businesses. As with any other American businesses, wind and solar providers get the subsidies. They also get special environmental subsidies, which are huge. I think this dispute started because the abnormal subsidies being provided to wind/solar providers have become a political issue. The wind/solar providers respond by pushing the narrative that fossil fuels get subsidies, but that just isn't a reasonable conclusion. The supposed subsidies are just normal things provided to American businesses, unlike what wind and solar are getting.

awinder 7y ago
The federal coal leasing program has been a frequent target for overpricing coal with some estimates at around a billion a year in benefit. There's also things like opening new areas for drilling in areas that are only profitable when subsidized (and then the subsidies come in), which is not a normal tax policy arrangement, at least not the kind your hairdresser has with the federal government.
mceachen 7y ago
Perhaps this could be dismissed as semantics, but saying that we don't subsidize fossil fuels seems to not jibe with the reality that the only countries that have lower gasoline prices in world are countries whose economies are predominantly fossil-fuel based. See https://www.bloomberg.com/graphics/gas-prices/#20184:United-States:USD:g https://www.bloomberg.com/graphics/gas-prices/#20184:United-... If the US gasoline costs were even close to EU levels, (say, 2x what we pay), there'd be an inversion in household energy consumption economics (and it'd be the difference between 2% and 5% of household incomes). EVs wouldn't be just for tree-huggers. Buying from 100% clean electrical sources might be cheaper than "standard" sources.
- burfog 7y ago
  The US has a large well-unified market with good transportation and local sources of fuel. That cuts costs. Other places, like the EU, don't have all that. They also apply some really extreme taxes. Lack of punitive taxes isn't a subsidy. If the taxes are never imposed in the first place, it isn't even a tax credit. The average gasoline tax in the US is $0.53 per gallon total, combining all taxes. Just the excise tax in Turkey is $4.32 per gallon!!! The average gasoline-specific tax in the 34 advanced economies is $2.62 per gallon, but then a VAT is applied on top of that.
nathan_long 7y ago
> We don't really subsidize fossil fuels. If we allowed a restaurant to dump its trash for free in a public playground, we would be subsidizing that restaurant with taxpayer dollars. When we allow fossil fuels to be burned and dump pollution for free into the public atmosphere, we are subsidizing the usage of fossil fuel. In the trash scenario, we'd make the restaurant pay for cleanup, pay medical costs for the kids who got ill, and pay for its future trash disposal. Burning fossil fuels causes asthma, climate change, flooding, etc, and remediation costs should be borne by those who cause the damage. If you consider the billions of dollars we all spend dealing with fossil fuel companies' waste, it's quite a subsidy. The least we can do is make them compete on a level playing field.

by burfog 7y ago

awinder 7y ago

The federal coal leasing program has been a frequent target for overpricing coal with some estimates at around a billion a year in benefit. There's also things like opening new areas for drilling in areas that are only profitable when subsidized (and then the subsidies come in), which is not a normal tax policy arrangement, at least not the kind your hairdresser has with the federal government.

mceachen 7y ago

Perhaps this could be dismissed as semantics, but saying that we don't subsidize fossil fuels seems to not jibe with the reality that the only countries that have lower gasoline prices in world are countries whose economies are predominantly fossil-fuel based. See https://www.bloomberg.com/graphics/gas-prices/#20184:United-States:USD:g https://www.bloomberg.com/graphics/gas-prices/#20184:United-... If the US gasoline costs were even close to EU levels, (say, 2x what we pay), there'd be an inversion in household energy consumption economics (and it'd be the difference between 2% and 5% of household incomes). EVs wouldn't be just for tree-huggers. Buying from 100% clean electrical sources might be cheaper than "standard" sources.

burfog 7y ago
The US has a large well-unified market with good transportation and local sources of fuel. That cuts costs. Other places, like the EU, don't have all that. They also apply some really extreme taxes. Lack of punitive taxes isn't a subsidy. If the taxes are never imposed in the first place, it isn't even a tax credit. The average gasoline tax in the US is $0.53 per gallon total, combining all taxes. Just the excise tax in Turkey is $4.32 per gallon!!! The average gasoline-specific tax in the 34 advanced economies is $2.62 per gallon, but then a VAT is applied on top of that.

nathan_long 7y ago

> We don't really subsidize fossil fuels. If we allowed a restaurant to dump its trash for free in a public playground, we would be subsidizing that restaurant with taxpayer dollars. When we allow fossil fuels to be burned and dump pollution for free into the public atmosphere, we are subsidizing the usage of fossil fuel. In the trash scenario, we'd make the restaurant pay for cleanup, pay medical costs for the kids who got ill, and pay for its future trash disposal. Burning fossil fuels causes asthma, climate change, flooding, etc, and remediation costs should be borne by those who cause the damage. If you consider the billions of dollars we all spend dealing with fossil fuel companies' waste, it's quite a subsidy. The least we can do is make them compete on a level playing field.