Renewable energy subsidies

From American Enterprise Institute.

Renewable energy sources received 25 times more in taxpayer subsidies per energy unit produced than fossil fuels in 2010


In 2010, renewable energy received $14 billion of government taxpayer subsidies, while fossil fuels energy sources received only $4 billion of taxpayer handouts that year, according to estimates by the Energy Information Administration (EIA) and reported in today’s WSJ by Bjorn Lomborg in an op-ed. According to energy production data from the EIA, the US produced 8.12 quadrillion BTUs of renewable energy in 2010 from geothermal, solar, wind and biomass sources, while the energy produced from fossil fuels (coal, oil and natural gas) totaled 58.2 quadrillion BTUs.


The chart above displays the dollar amount of taxpayer subsidies per billion BTUs of energy produced in 2010, and shows that renewable energy in 2010 received 25 times more in taxpayer subsidies than fossil fuels, adjusted for the amount of energy produced: $1,724 per billion BTUs of renewable energy produced vs. less than $69 per billion BTUs of fossil fuel energy produced.

That was one of the points made today by Bjorn Lomborg in his WSJ op-ed:

Three myths about fossil-fuel subsidies are worth debunking. The first is the claim, put forth by organizations such as the Environmental Law Institute, that the U.S. subsidizes fossil fuels more heavily than green energy. Not so.

The U.S. Energy Information Administration estimated in 2010 that fossil-fuel subsidies amounted to $4 billion a year. These include $240 million in credit for investment in Clean Coal Facilities; a tax deferral worth $980 million called excess of percentage over cost depletion; and an expense deduction on amortization of pollution-control equipment. Renewable sources received more than triple that figure, roughly $14 billion. That doesn’t include $2.5 billion for nuclear energy.

Actual spending skews even more toward green energy than it seems. Since wind turbines and other renewable sources produce much less energy than fossil fuels, the U.S. is paying more for less. Coal-powered electricity is subsidized at about 5% of one cent for every kilowatt-hour produced, while wind power gets about a nickel per kwh. For solar power, it costs the taxpayer 77 cents per kwh.