Budget hawks: Does US need to give gas and oil companies $41 billion a year?
He estimates that the US spent between $49 billion and $100 billion on energy subsidies in 2007 – numbers Mr. Koplow says are still accurate if adjusted for inflation. The handouts cover a broad range of activities, from federal loan guarantees and funding for energy research and development to special tax exemptions.
Here is how the subsidies break down by category, adjusted for inflation, according to Koplow.
Oil and gas: $41 billion
President Obama wants Congress to chop $3.6 billion in 2012 oil and gas tax breaks for a total of $46.2 billion over the next decade. Among Mr. Obama’s targets: a nearly century-old oil and gas industry tax deduction for the costs of preparing drill sites and a manufacturer's tax break granted the oil industry in 2004.
The number is significant, but still little more than one-tenth of the federal subsidies that oil and gas companies might receive over 10 years. Adjusted for inflation, they currently receive about $41 billion in annual subsidies annually. That amounts to more than half – 52 percent – of total benefits distributed to energy sectors by the federal government.
Coal: $8 billion
In second place among fossil fuels, the US coal industry reaps about $8 billion in subsidies annually – or about 10 percent of total federal largess. This includes tax breaks, as well as hundreds of millions of dollars on research into carbon capture and storage.
Those figures mean that subsidies to industries involved in fossil fuels total about $52 billion when adjusted for inflation – about two-thirds all federal energy subsidies.