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Subsidies in the U.S. for fossil fuels, nuclear vs renewables

Subsidies in the U.S. for fossil fuels, nuclear vs renewables U.S. Energy subsidies overview (source: DBL Energy Subsidies Paper)
Alexander Richter 12 Oct 2011

A recent report looks into the average energy subsidies for oil, gas, nuclear versus those of renewables in the U.S. It makes the argument that by "most metrics, renewable energy sources have received far less in subsidies in their early years than any of these other energy sources.

A recent article looks at how every energy source in the last 400 years of U.S. history has been subsidized. The article argues that “by most metrics, renewable enery sources have received far less in subsidies in their early years than any of these other energy sources.”

The article refers to a report written by Nancy Pfund, Managing Partner, DBL Investors, and Ben Healey, a graduate student at Yale University School of Management and School of Forestry and Environmental Studies (link to the PDF).

Pfund said, “All new energy industries — timber, coal, oil and gas, nuclear — have received substantial government support at a pivotal time in their early growth, creating millions of jobs and significant economic growth,” adding, “Subsidies for these ‘traditional’ energy sources were many, many times what we are spending today on renewables.”

The table showing the historical average of annual energy subsidies for O&G, nuclear, biofuels, and renewables is provided in the picture above.

According to the report, as a percentage of inflation-adjusted federal spending, nuclear subsidies accounted for more than one percent of the federal budget over the first 15 years of each subsidies’ life; oil and gas subsidies made up half a percent of the total budget, but renewables have amounted to only about a tenth of a percent.

Other key findings in the report include:

  • Energy industries have enjoyed a century of federal support. From 1918 to 2009, the oil and gas industry received $446.96 billion (adjusted for inflation) in cumulative energy subsidies. Renewable energy sources received $5.93 billion (adjusted for inflation) for a much shorter period from 1994-2009.
  • Average annual support for the oil and gas industry has been $4.86 billion (1918-2009), compared to $3.50 billion for nuclear (1947-1999) and $0.37 billion (1994-2009) for renewable energy.”