When it comes to stacking the card deck in one’s favor, no one seems more adept than the dirty energy industries, namely oil, coal and gas. These companies enjoy enormous government subsidies, huge profits and executive salaries most of us couldn’t imagine. But if the playing field were leveled so the renewable energy business could compete more effectively, our country’s energy future could change substantially. And that means reducing global warming pollution and protecting our health and the health of the planet.
The subsidy numbers are startling when you consider our country’s $14 trillion debt. According to a leading independent expert Doug Koplow of Earth Track, he estimates that the US spends between $49 and 100 billion on energy subsidies every year. This aid comes in the form of special tax exemptions, cash outlays, funding for research and federal loan guarantees. The lion’s share goes to fossil fuels (oil, gas and coal), and the crumbs are for nuclear, ethanol and renewable energy.
Consider the state of the dirty energy industry in the US right now and you’ll wonder why any assistance is needed at all.
Of the top 10 Fortune 500 companies, three are in the energy business and another three are in related industries. Profits at ExxonMobil (ranked #2 in the Fortune 500) for 2010 are reported at $30.5 billion and the company’s CEO Rex Tillerson made $28 million in total compensation last year. Things are not so bad for energy companies not quite as big as ExxonMobil either. Duke Energy’s profits for 2010 were $1.3 billion, up 23% from the year prior and CEO Jim Rogers made $8.8 million.
President Obama has discussed cutting energy subsidies on many occasions, most recently in his proposed budget which would cut $4 billion. The President needs to push this issue with the enthusiasm he had for tracking down Osama bin Laden. Congress, especially those leading the budget debate, needs to support this budget trimming measure.
Unfortunately, contributions made to some members of Congress from the dirty energy sector can cloud logical thinking. Take our very own Senator Burr, who ranked 5th in receipt of dirty energy donations in the 111th Congress. Burr accepted $439,000 from the coal, oil and utility companies. From Duke and Progress Energy to the bad boy Koch brothers, Burr raked it in. In the past, when reducing or eliminating subsidies for dirty energy has been debated in the Senate, Burr has always voted NO.
The reasoning for NO goes like this – if subsidies are cut for example for oil, jobs will be lost and gas prices will rise. But according to the US Treasury Department, cutting oil subsidies would reduce domestic energy production by less than one-half of 1% and therefore have little impact on American jobs. Prices at the pump are set largely by the world market, so according to the US Treasury, it is highly unlikely that prices at the pump would rise, but if they did the US Treasury estimates the cost to be less than one cent per gallon.
Meanwhile, a recent report by the United Nations Intergovernmental Panel on Climate Change concluded that renewable energy could supply 77% of the world’s energy needs by mid-century, if only public policy and political will are stepped up – in other words, only if the card deck is stacked in favor of humanity.
All of this leads me to the following:
Many of our politicians are indebted to dirty energy companies – companies that make huge profits from you and me, all the while taking government handouts. The President is trying to trim the handouts, but the pressure from the industry and the indebted politicians makes it tough. We know that the technology exists to change our energy future and that with some strong political will, we can avoid some of the worst impacts of global warming.
Now it is up to you and me to tell our elected officials that we are watching the budget debate very closely and we want dirty energy subsidies to go. When they tell you it will affect jobs and the economy, you’ll know that’s not true. When they propose cuts to Medicaid, Medicare and education to address the rising deficit, tell them to start with the dirty energy industry’s benefits programs, not yours and mine. Tell them to stack the deck for humanity, not the dirty energy industry.
Lisa Finaldi is an environmental policy analyst, advocate and blogger and frequent contributor to N.C. Policy Watch.