The AWEA Blog: Into the Wind


New report gives best 'apples to apples' picture to date of federal support for all energy sources

Posted: 2011-09-23 Jon Goldstein, AWEA Director of Public Affairs

A recently released report from a group of venture capital investors attempts to give a clear picture of the playing field for federal support when it comes to different sources of energy. The report, “What Would Jefferson Do,” from DBL Investors, is among the first and best attempts to make an “apples to apples” comparison of federal incentives for fossil fuels, nuclear and renewable sources of energy.

The fact that oil and gas have received more than 75 times the total cumulative dollar amount of federal subsidies that renewables have may not be terribly surprising ($446.96 billion vs. $5.93 billion, see below). Oil was first commercially produced in Titusville, PA in 1859, giving it more than a century head start on renewable sources of energy.


 

110923 - Subsidy Graph 1

 

What may surprise some is that the study finds “that current renewable energy subsidies do not constitute an over-subsidized outlier when compared to the historical norm for emerging sources of energy. For example: … the federal commitment to [oil and gas] was five times greater than the federal commitment to renewables during the first 15 years of each [subsidy’s] life, and it was more than 10 times greater for nuclear."

In other words, if you zoom in and look at the federal support for all energy sources in their infancy, renewables actually receive far less support than did fossil fuels or nuclear energy at a similar point in their development. In fact, oil and gas subsidies were far greater than the more modest federal support renewable sources of energy receive today, even when those oil and gas supports were at historic lows during the Great Depression. (See below.)


110923 - Subsidy Graph 2

 
The report concludes, “Looking at the history of American energy subsidies, a strong case can be made that in order to drive the next generation of energy technology, the federal government needs to continue its support for renewables, in line with our historical commitments to innovation.”

 

We couldn’t have said it better ourselves.


3 responses

  1. Tom Gray November 11, 2011 09:01AM
    First, MWh is an energy measure, not a capacity measure, and second, we didn't do the work, we simply reported it. Another useful way to compare subsidies might be to look at $/MWh produced, but ON THE SAME TIME SCALE--that is, how much energy had each resource produced by the point in time that it had received X$ in support. Probably a fairly difficult piece of research, since some of these subsidies date back almost a century. Also, it probably wouldn't be good to overlook the fact that some of these subsidies likely result from large industries exerting political power to get government funds. If that indeed is the case, it would seriously undercut the value of a $/MWh comparison, since the more MWh an industry produced (and the larger it was), the more likely it would be to be able to secure a subsidy.
  2. Tom Stacy October 19, 2011 04:12PM
    Oh stop it. This material is embarrassing to you. I have shared this one with lawmakers, and they agree that the true apples to apples comparison would be $/MWH of CAPACITY VALUE - not energy. But please, by all means, feel free to continue to embarrass yourselves further...
  3. Paul Dvorak September 27, 2011 12:11PM
    Make the charts larger. Good grief. You've got good and useful data there and you make it almost unreadable. Sorry to sound so harsh, but you've done good work, now let us read it.

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