[Graeme]

There Are Over 250 Different Kinds of Fossil Fuel Subsidies We Need to Kill

$this->bbcode_second_pass_quote('', 'O')ver the years, the subsidies doled out to the fossil fuels industry have become numerous, entrenched, and quite complex. Which makes them not only quite difficult to remove for political reasons, but often nearly invisible to the average citizen. In fact, according to a new report from the International Energy Agency and the Organisation for Economic Co-operation and Development, there are at least 250 different kinds of subsidies for the fossil fuels industry.

That's a lot. And it should make you wonder why renewable energy has such trouble maintaining even the most modest of tax breaks: The Department of the Treasury’s Section 1603 cash grants program for clean energy projects just expired at the beginning of this year. Meanwhile, of course, the American oil industry alone reaps literally tens of billions of dollars in annual subsidies.

But it's not just the massive yearly tax breaks for Big Oil that comprises the advantage fossil fuels have over renewables–it goes deeper than that. GigaOm has an extensive report on fossil fuel subsidies, which helps to explain: "when an industry has been subsidized for almost a century, as is the case with the fossil fuel industry, the ways in which those companies are supported get numerous and complex. The OECD’s report counted at least 250 mechanisms. Unlike the 1603 Program of the Department of the Treasury for clean power, most subsidies are far more opaque."

And here's Grist's Chris Mims: "And unlike federal subsidies for renewables, which are constantly haggled over in spending bills, a lot of these are sneaky. They include everything from direct subsidies to tax loopholes and government spending on infrastructure on which fossil fuel industries depend. Worse, these subsidies are actually growing from year to year."

[vtsnowedin]

$this->bbcode_second_pass_quote('Graeme', '['). Meanwhile, of course, the American oil industry alone reaps literally tens of billions of dollars in annual subsidies.

[Graeme]

Oh yes they will since 100% drop-in biofuel made from algae will be cheaper than conventional gasoline. In fact, in places and at some point in time in future, it may be the only fuel available.

[vtsnowedin]

$this->bbcode_second_pass_quote('Graeme', 'O')h yes they will since 100% drop-in biofuel made from algae will be cheaper than conventional gasoline. In fact, in places and at some point in time in future, it may be the only fuel available.

[Graeme]

No I meant that the fuel is 100% biofuel not mixed with conventional gasoline. It has be able to be burned by existing vehicles. Butanol would fit the bill. And I also meant that there will be a range of different biofuels available. For instance, biodiesel, ethanol, methanol, butanol, biogas and even hydrogen produced by a biological process or sunlight.

[Graeme]

Oklahoma, With An Oil And Gas Boom, Is Facing A Budget Crisis

$this->bbcode_second_pass_quote('', 'O')klahoma is doing better than most states post-recession: It has a growing economy -- in 2012 Oklahoma's GDP grew by 2.1 percent, just below the nation's 2.5 percent growth -- and the state collects hundreds of millions in taxes yearly from its thriving oil and gas industry. Despite all that, the state has been cutting critical services because costly subsidies and tax breaks for the energy industry are eating into its revenue.

Oklahoma is now facing a budget crisis that could force legislators to make further cuts to education, public safety and health care. Part of the problem causing the government cash crunch, The Associated Press reported, is that lawmakers have expanded so many tax breaks for oil and gas producers over the last decade that there is hardly enough left to fund basic state services.

The state's budget problem could further increase after its House of Representatives voted Wednesday 54-40 to approve an income tax cut, despite a projected $170 million shortfall next fiscal year. Gov. Mary Fallin proposed an income tax cut in February during her State of the State address. The state's highest income tax rate of 5.25 percent will drop to 5 percent in 2016, if state revenue projections exceed expectations at the end of the year. The bill now heads to her desk for signing.

“Why do we keep digging a hole?” said Democratic State Congressman Mike Brown.

Critics singled out tax incentives for horizontal drilling -- a once risky experimental method that is now being used at almost all new oil wells in the state -- as the biggest culprit. Drillers pay a 1 percent tax in the first 48 months of production instead of the 7 percent rate for traditional production, and that will cost the state more than $250 million in lost revenue this year alone, according to the nonpartisan think tank Oklahoma Policy Institute. Experts at the institute argue that if those subsidies were removed and the revenue put toward education, it could result in a 13.7 percent increase in state aid funding for each district. That's an average of $369 more spent on each student statewide.

[Graeme]

Fossil fuel subsidies costing global economy $2 trillion: IMF

$this->bbcode_second_pass_quote('', 'A')s has been noted here before, the combined value of global fossil fuel subsidies can be difficult to calculate, with recent estimates ranging from $500 billion to $1.9 trillion. But according to the International Monetary Fund, when you factor in implicit subsidies from the failure to charge for pollution, climate change and other externalities, the post-tax cost comes in at closer to $2 trillion – equivalent to about 2.9 per cent of global GDP, or 8.5 per cent of government revenues.

This eyebrow-raising figure was quoted ahead of this week’s two-day conference in Kenya, co-hosted by UNEP, IMF, GIZ and the Global Subsidies Initiative of IISD. The theme of landmark meeting – “Reforming Fossil Fuel Subsidies for an Inclusive Green Economy” – will focus on how fiscal policies can address the perverse effects of fossil fuel subsidies and strengthen government spending for sustainable development.

Noting that global subsidies to the renewable energy industry were $88 billion in 2011, experts say reducing or eliminating fossil fuel subsidies – and properly pricing energy to account for environmental impacts – is one of the most effective ways governments can foster a low-carbon transition.

According to the IMF, simply removing fossil fuel subsidies could lead to a 13 per cent decline in CO2 emissions.

UNEP (United Nations Environment Programme) argues that subsidies to fossil fuel producers often support inefficient state-owned energy companies and stifle incentives for greater efficiencies and innovation, while subsidies to consumers often encourage excessive consumption, which has knock-on effects for pollution, human health and greenhouse gas emissions.

“Fiscal policies are of particular importance in a green economy transition. Confronted by a fiscally constrained world, government reforms might appear to be a daunting challenge,” said UN Under-Secretary-General and UNEP Executive Director Achim Steiner.

[Graeme]

Big Oil Wants to Keep Its Tax Breaks Despite Very Profitable Winter

$this->bbcode_second_pass_quote('', 'V')iew data on Big Oil’s first-quarter profits (.xls)

The United States experienced glacial economic growth during the first quarter of 2014, but the big five oil companies—BP, Chevron, ConocoPhillips, Exxon Mobil, and Shell—did not. Even though their profits were lower than in the first quarter of 2013, they still earned a combined $23 billion. They spent $7 billion, or nearly one-third, of this amount to repurchase their own stocks, lining the pockets of their boards of directors, their executives, and their largest shareholders. On top of this, they have $68 billion in cash reserves. Big Oil continues to prosper in a slowly recovering economy.

The companies benefited from domestic oil prices that averaged $5 per barrel higher in the first quarter of 2014 than in the first quarter of 2013. The higher price of oil offset the companies’ 5 percent production decline from the first quarter of 2014 compared to the first quarter of 2013.

In addition to producing oil and gas, the big five oil companies emit a huge amount of the carbon pollution responsible for climate change. According to the latest data from the Environmental Protection Agency, these companies spewed the climate pollution equivalent of 71 million cars in 2012—equal to more than one-quarter of the cars currently on the road.

[vtsnowedin]

That a corporation pays back it's investors by buying back their shares at market is hardly a crime. Nor is having adequate working capital in hand. The troubling things in that piece is one the five percent decline in domestic production and two the amount of pollution released in the production phase. I assume most of that is flared off NG a practice I find very disturbing and wasteful although probably necessary in some situations.