The legislative auditor’s disclosure that the majority of Utah’s energy tax credits have gone to the oil and natural gas industries is no surprise. The Congressional Budget Office reports that, historically, the largest share of federal energy tax preferences also went to oil and gas companies.
Federal subsidies to the coal industry have exceeded $110 billion since 1950 and, when combined with oil and gas, constitute 65 percent of the roughly $1 trillion in U.S. taxpayer-funded assistance to the energy sector.
This ongoing subsidy imbalance favoring fossil fuels began to shift toward renewables and energy efficiency in 2005 as more policymakers acknowledged the scientific consensus that burning carbon is negatively impacting Earth’s atmosphere. Still, clean energy and air advocates wondered how long it would take to level the playing field. With state and federal solar tax credits set to expire within five years, progress was bound to be slow.
Now comes the Trump administration with retrograde policies to increase fossil fuel subsidies again so that damages to our air, land, water and public health will accelerate rather than slow down. Trump’s Energy, EPA and Interior directors are moving to reverse course and further privilege coal, gas and oil with taxpayer money.
Keep in mind that all subsidies aim to arbitrarily lower costs of production so that more of a commodity is produced and consumed. Market forces, and sometimes the public good, are ignored.
Fossil fuel subsidies are numerous and well entrenched. They include direct cash payments, tax incentives, research and development grants, low-cost loans, below-market rates to use public land, water and minerals and discounted royalty payments for materials extracted. Carbon-fired polluters also enjoy immunity from penalties for many environmental and public health damages.
What do subsidies look like in practice? Here are some examples.
Trump’s energy secretary, Rick Perry, wants taxpayers to bail out the ailing coal and nuclear industries by covering costs to acquire and maintain excess fuel. Forbes magazine reports this regulatory move could cost consumers $10.6 billion annually, with $1.2 billion going to support one previously bankrupt coal utility, NRG.
The Environmental Protection Agency’s Scott Pruitt, a climate science denier, seeks to repeal the Clean Power Plan so coal fired power plants like Rocky Mountain Power’s Hunter and Huntington facilities can belch more toxins into the atmosphere.
The pre-Trump EPA warned that “social costs of carbon” — the health, environmental and economic costs that utilities shift to the public — could exceed $100 per metric ton of CO2. So RMP’s Huntington facility, emitting over 5 million metric tons of CO2 annually, could be causing $500 million in damages to people and the environment every year — SO2, NOX, and mercury emission costs not included.
Trump’s interior secretary, Ryan Zinke, wants national monuments opened for oil, gas and coal mining. Earlier this year, Zinke blocked reform of the federal coal leasing program by lifting a moratorium meant to address concerns that taxpayers are being fleeced to benefit coal companies.
Even the Koch-funded Strata institute at Utah State University admits that continued leasing of public land at below-market value and without competitive bidding is “allowing coal producers to mine coal for less than they would in a fair, competitive market.” By one account, U.S. taxpayers lost almost $1 billion in revenue annually from coal leases in just two states, including Zinke’s Montana. According to Taxpayers for Common Sense, with royalty rates sometimes as low as 2 percent, “taxpayers have sustained decades of revenue losses from the sale of federal coal.”
Guess what Utahns and all Americans will reap if Bears Ears and Grand Staircase-Escalante national monuments are ultimately opened for fossil fuel extraction? More taxpayer subsidies to coal, oil and gas companies.
What can citizens do to fight this massive rip-off?
Support Native American tribes taking the Trump folks to court. Donate time and money to citizen action groups engaged in the clean energy and air struggle. Patronize pro-environment businesses. Tell the Public Service Commission to make RMP’s rates reflect the social costs of carbon, so energy conscious consumers don’t have to subsidize those addicted to fossil fuel electricity. And support campaigns like Better Boundaries and Count My Vote seeking to empower forward-thinking citizens and a new set of political leaders.
Stanley Holmes, Salt Lake City, is co-founder and outreach coordinator for Utah Citizens Advocating Renewable Energy (UCARE).