http://reneweconomy.com.au/2016/graph-of-the-day-the-myth-about-energy-subsidies-31976
Graph of the Day: The myth about energy subsidies
By Giles Parkinson on 25 February 2016
Ever hear the story about why renewable energy can’t compete without a
subsidy? You hear it all the time from the fossil fuel industry. And the
response from renewables? Take away fossil fuel subsidies, and they’d be
glad to compete on level terms.
This graph below, displayed today by David Hochschild, a commissioner
with the California Energy Commission, at the Energy Productivity Summer
Study in Sydney, illustrates why the fossil fuel and nuclear industries
don’t want that to happen.
Studies by the International Energy Agency point out that global
subsidies for fossil fuels outstrip those for renewable energy nearly
10-fold. The International Monetary Fund said if climate and
environmental costs were included, then the fossil fuel subsides
increased another 10 times to nearly $5 trillion a year.
[http://reneweconomy.com.au/wp-content/uploads/2016/02/david-subsidies.jpg]
[shows oil&gas subsidies as $447 billion, nuclear as $185 billion,
biofuels as $32 billion and renewables as $6 billion]
This graph, that Hochschild sourced from DBL Investors, shows the
accumulated energy subsidies in the US under federal programs. Oil and
gas dominate, followed by nuclear. Federal renewable energy subsidies,
in the form of investment and tax credits, are a small fraction.
“The fossil fuel industry hates to talk about that,” Hochschild told
RenewEconomy in an interview after his presentation.
“There is a myth around subsidies, but there is no such thing as an
unsubsidised unit of energy.”
He said the oil depletion allowance had been in place for the oil
industry since 1926, and would be ongoing, despite the fact it was one
of the most profitable industries in the world. He cited insurance costs
for nuclear plants – met by taxpayers – “without which there would be no
nuclear plants”.
For natural gas, it was the drilling, or fracking, which had been made
exempt from compliance with the safe drinking water act: “That is
subsidy,” he said. And he pointed to taxpayer funded rail networks that
have helped coal.
By contrast, the large-scale wind and solar industries in the US have
had to content with repeated changes to their federal support
mechanisms. The tax credits have been changed seven times in a decade.
“How can you plan a wind turbine factory or project in those types of
conditions,” he asked.
And he used this graph to illustrate the short-term nature of the
subsidies that renewable energy does get. And the biggest benefit. “You
put subsidies in renewable energy and costs go down” to the point where
they are not needed any more. That has not happened with fossil fuels
and nuclear.
[http://reneweconomy.com.au/wp-content/uploads/2016/02/david-susbidies-time.jpg]
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