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  • CBO Debunks Myth That Tax Code Favors Oil Over Renewables

    Environmental activists and liberal politicians are fond of bemoaning the supposedly disproportionate tax benefits that go to the fossil fuel industry compared to its renewable energy competitors. The president specifically has made “ending tax breaks for oil companies” a pillar of his paltry efforts to reduce the federal deficit.

    But a new report from the Congressional Budget Office (CBO) handily debunks the myth that oil companies uniquely or excessively benefit from the tax code. One devastating chart sums up CBO’s key findings:

    As the chart shows, renewable energy is far more heavily subsidized by tax carveouts than any other energy sector, including fossil fuels.

    The chart does not, however, take into account the level of those subsidies in proportion to the amount of energy that each sector creates. By that measure, renewables’ federal subsidies are even more lopsided.

    As Heritage’s David Kreutzer has pointed out, wind energy companies, for instance, get about 1000 times the subsidies that oil companies do, per kilowatt-hour of energy produced.

    As CBO notes, the sudden spike in tax benefits for renewable energy companies stems from the president’s stimulus package, which included billions in tax breaks for wind, solar, biofuel, and geothermal energy.

    But while many of those tax breaks are set to expire soon, the fact remains that renewable energy is heavily favored by current tax policy. The notion that the oil industry disproportionately benefits from “tax breaks” is simply wrong.

    That said, a strong energy policy would not seek to equalize subsidies for all energy sectors, but would rather eliminate all such subsidies, and allow each energy sector to compete in the marketplace on its own merits.

    Posted in Energy, Featured, Ongoing Priorities, Scribe [slideshow_deploy]

    13 Responses to CBO Debunks Myth That Tax Code Favors Oil Over Renewables

    1. greybeerd says:

      So once again the POTUS and his lefty cohorts throw "untruths" at us hoping no one is really listening. He got caught again.
      He's like a child who does what he knows is wrong, but closes his eyes thinking no one can see him.
      Increasingly the people lying in public are finding that the information age will bite them quickly.

    2. JBinGB says:

      VOTE A B O

    3. Greybeerd;; I think the Kenyan is totally underestimating how much 53% of We the People are engaged in knowing his lying agenda.

    4. Ron Larimore says:

      End ALL subsidies? That will never happen…too many on K Street depend on them for a living!

    5. LukeAppling says:

      Another Obama lie exposed! Each time Obama speaks he lies and if Boehner/McConnell or any candidate had the gumption they would follow Obmama and refute every lie immediately after it was stated. examples"my administration has opened more wells than any in history" -lie is they were approved under Bush and EPA regs took 4 years before they actuaklly happened, "I opened the pipeline to Texas" he approved only the distribution and sits on the Keystone Pipeline with it's 20,000 immediate jobs and riches for the country. Every lie must be refuted by republicans if they have backbone whatsoever.

    6. CPB says:

      And you will never hear that from the media. Was listening to Levin last night , who advised that the one big tax deal for big oil companies was a drillng credit or something like that, which was repealed in the late 1970's. I wish someone could call Barry on this.

    7. Muse1876 says:

      I hope that most of the 53% aren't on the freebie train!

    8. pappap42 says:

      You all have to remember oBUMo is talking to the stupid people. That is how he got elected the last time. GOD save the USA.

    9. Kevin@AWEA says:

      As I pointed out a week ago on this very blog, Heritage is being intellectually dishonest by claiming that renewable energy receives less federal support than oil and gas. Speaking in terms of cumulative dollar amount, the argument made by this post is simply false. See my original comment here: http://blog.heritage.org/2012/02/28/wind-subsidie

      The CBO report even points out the fact that traditional energy sources enjoy an undeniable advantage with regard to subsidies! “Tax preferences for energy were first established in 1916, and until 2005 they were primarily intended to stimulate domestic production of oil and natural gas… [Today] Only four major energy tax preferences are permanent: three are for fossil fuels and one is for nuclear energy.”

      That’s an 89 year head start.

      The wind industry is simply interested in leveling the playing field.

      As the DBL Investors report titled “What Would Jefferson Do?” concludes, “Looking at the history of American energy subsidies, a strong case can be made that in order to drive the next generation of energy technology, the federal government needs to continue its support for renewables, in line with our historical commitments to innovation.”

      Source: http://www.dblinvestors.com/documents/What-Would-

    10. ATB2 says:

      Kevin you are missing or deliberately ignoring the real point: fossil fuel industry does not depend on government subsidies and support for its existence. End all such subsidies, that's how to create a "level playing field". Of course that's not what all the rent seekers in alternative energy investments really want. Gov't subsidies were never necessary for fossil fuel industry to develop. Politicians seeking support made those deals. At least we got energy for the money. Obama's subsidies are naked political payoffs, and will not produce any meaningful growth in energy supply.

    11. Bobbie says:

      It's amazing how people today defend influences that closes their mind to everything else. cheated and cheating themselves.

    12. brad says:

      What your idiotic point fails to take into account is the fact that oil companies DON'T need any handouts! They are making billions of profit already. On the other hand, like all start up ventures and big projects (such as freeing us from our generational use of limited, dirty and geo-politically problematic fossil fuels) needs seed money.

      • Mike, Wichita Falls says:

        Why can't that alternative-fuel seed money be from your wallet, not mine, if you believe in it so much?

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