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How Much Money Goes to Fossil Energy?

At a recent Board Meeting for MRES the guest speaker, Lynn Hinkle, the Director of Policy Development for Minnesota Solar Energy Industries Association, discussed the potential for more jobs in green energy in the State of Minnesota. It was a very impressive presentation and something we felt was very important and worth discussing.

MnSEIA's mission is to 'Create clean solar energy and economic opportunities for Minnesota by promoting good business, solar energy best practices, and preservation of our environment.' Lynn Hinkle is a key component in maintaining that Mission. He has helped grow the solar industry in Minnesota and has helped in the passing of important legislation, such as PACE.

During his presentation at the MRES Board Meeting he mentioned new legislation and programs that MnSEIA is supporting, but something that really caught our attention was the information he provided about the subsidies that renewable energy receives and the subsidies that fossil energy has, and continues to receive.

Between 2002 and 2008 federal subsidies in the energy sector were divided up amongst the many players, and the numbers are as follows:

  • Carbon Capture and Storage
    • $2.3 Billion
  • Traditional Renewables
    • $12.2 Billion
  • Corn Ethenol
    • $16.8 Billion
  • Traditional Fossil Fuels
    • $70.2 Billion

It's important to point out that the information Mr. Hinkle was providing (specifically the fossil fuel  subsidies) is still an estimate. The renewable energy subsidies are fully accounted for and are as transparent as any of the energy subsidies the federal government and state agencies provide. We have nothing to hide, so why the big cover-up on the fossil fuel side?

Here is an excerpt from a recent Blog Post in Renewable Energy World, "Why We Still Don't Know How Much Money Goes to Fossil Fuel Energy"

The fact is, there is a wide array of government subsidies, both implicit and explicit, that are doled out every year to fossil fuel companies. One estimate, by the Environmental Law Institute, finds that dirty energy companies in the United States alone have run up a $72 billion tab at the taxpayer’s bar from 2002 to 2008. Worldwide, it’s far worse; as this study by the OECD explains:

The [International Energy Agency] estimates that direct subsidies that encourage wasteful consumption by artificially lowering end-user prices for fossil fuels amounted to $312 billion in 2009. In addition, a number of mechanisms can be identified, also in advanced economies, which effectively support fossil-fuel production or consumption, such as tax expenditures, under-priced access to scarce resources under government control (e.g., land) and the transfer of risks to governments (e.g., via concessional loans or guarantees). These subsidies are more difficult to identify and estimate compared with direct consumer subsidies.

The problem is, we’ve long suspected that no one really knows how much of our money goes to dirty oil executives like Rex Tillerson and Gregory Boyce. So how much of our tax money is going to ExxonMobil, Massey, etc?