|2011||Tax Preferences ||Production (quadrillion BTUs)||Preferences per |
|Renewable/Fossil Fuels||Fossil Fuels/Renewables||Renewables/Fossil Fuels|
The table above displays:
a) The tax preferences in 2011 that went to renewables ($12.9 billion) and fossil fuels ($1.7 billion), for a ratio of 7.6:1 in favor of renewables over fossil fuels
, data here
b) 2011 production levels for renewables (7.52 quadrillion BTUs) and fossil fuels (81.08 quadrillion BTUs), for a ratio of 10.8:1 in favor of fossil fuels over renewalbes
c) Tax preferences per quadrillion BTUs for renewables ($1.7 billion) and fossil fuels (about $21 million), for a ratio of almost 82:1 in favor of renewables over fossil fuels.
And what kind of return have taxpayers gotten for their coerced investment in the renewable energy sector over the last few years, e.g. in terms of business success, industry profits, and job creation? Not a very good return, and not very many jobs. In fact, it's likely a pretty negative return. As my AEI colleague Marc Thiessen reported in the Washington Post
"Since taking office, Obama has invested billions of taxpayer dollars in
private businesses [mostly in renewable energy companies], including as part of his stimulus spending bill.
Many of those investments have turned out to be unmitigated disasters —
leaving in their wake bankruptcies, layoffs, criminal investigations and
taxpayers on the hook for billions."
And the Washington Examiner reported last week that "The wind industry has actually lost about 10,000 jobs since 2009."
The White House here lists five reasons to repeal tax subsidies for oil companies, and some of those might be valid reasons. But that brings up the question: Why is the government
providing forcing taxpayers to provide subsidies to private energy companies in the first place? And if the outrage for forcing taxpayers to subsidize successful, job-creating oil companies that provide more than one-third of our energy is justified, where is the outrage for forcing taxpayers to subsidize unprofitable, renewable solar and wind companies with weak job creation, at 82 times the production-adjusted level of oil companies?
As I reported recently on CD, even the government's own forecast estimates that the renewable share of total energy demand will increase from about 7% currently to less than 11% even by 2035, while fossil fuel sources will still contribute more than three-quarters of our energy (77%) in 2035. Even massive taxpayer subsidies won't change the economic and scientific reality that hydrocarbon energy will fuel America's economy for many generations to come.
Update: See related analysis from my AEI colleague Steve Hayward last September on the Enterprise Blog (federal electric subsidies per unit of production).