US subsidies for oil and gas dwarf support for renewables

Subsidies for clean energy are taking a hit these days, particularly in the wake of the bankruptcy of Solyndra, a solar-panel company that had received a $535 million loan guarantee from the US Department of Energy (DOE). But renewables advocates who feel green power has never gotten its due can be forgiven if they sometimes seem a bit paranoid.

As Henry Kissinger once said, even a paranoid can have enemies.

A recent analysis shows clean-energy supporters really do have reason to feel unloved. While past federal subsidies for the nascent US oil and gas industries averaged a half percent of the federal budget, support for renewables is barely one-fifth of that, according to a report authored by Nancy Pfund, a managing partner at DBL Investors, and Ben Healey, a graduate student at Yale University.

Their study — “What Would Jefferson Do? The Historical Role of Federal Subsidies in Shaping America’s Energy Future” — found that, between 1918 and 2009, oil and gas producers received $446.96 billion (adjusted for inflation) in cumulative energy subsidies. That comes to an average of  $4.9 billion per year. In comparison, renewable energy subsidies totaled $5.93 billion (adjusted for inflation) from 1994 to 2009 … or around $0.4 billion per year.

“All new energy industries — timber, coal, oil and gas, nuclear — have received substantial government support at a pivotal time in their early growth, creating millions of jobs and significant economic growth,” Pfund said. “Subsidies for these ‘traditional’ energy sources were many, many times what we are spending today on renewables.”

Pfund and Healey’s report found a “striking divergence in early federal incentives.”As a percentage of the federal budget, for example, nuclear power has received an outsized level of support, averaging $3.50 billion a year from 1947 to 1999. Subsidies for oil and gas have been at least 25 percent higher than for renewables … and in extreme years have been 10 times as great.

“The takeaway from this history lesson is that government support has been and should continue to be an essential component in the growth of emerging energy sources, enabling US technology innovation, job creation and economic expansion,” Pfund said.