Guest slam dunk by David Middleton
From the ever unreliable Nick Cunningham at Oil Price Dot Com…
Global Fossil Fuel Subsidies Hit $5.2 Trillion
By Nick Cunningham – May 12, 2019
The world spent a staggering $4.7 trillion and $5.2 trillion on fossil fuel subsidies in 2015 and 2017, respectively, according to a new report from the International Monetary Fund. That means that in 2017 the world spent a whopping 6.5 percent of global GDP just to subsidize the consumption of fossil fuels.China was “by far, the largest subsidizer” in 2015 at $1.4 trillion, the IMF said. The U.S. came in second at $649 billion. In other words, the U.S. spent more on fossil fuel subsidies in 2015 than it did on the bloated Pentagon budget ($599 billion in 2015). Russia spent $551 billion, the EU spent $289 billion, and India spent $209 billion. Emerging markets in Asia accounted for 40 percent of the total while the industrialized world accounted for 27 percent, with smaller percentages found in other regions.
The subsidy figure the IMF uses incorporates a variety of supports for fossil fuels, including not pricing for local air pollution, climate change and environmental costs, as well as undercharging for consumption taxes and undercharging for supply costs.By fuel, coal is receives the most largesse, account for 44 percent of the global total. Oil was shortly behind at 41 percent, and natural gas and electricity output received 10 percent and 4 percent, respectively.
There is a long list of reasons why slashing fossil fuel subsidies is not only a good idea, but very much needed. The climate crisis is worsening.[…]
Nick Cunningham is a freelance writer on oil and gas, renewable energy, climate change, energy policy and geopolitics. He is based in Pittsburgh, PA.
Oil Price Dot Com
What do I mean by “fake subsidies”?
The subsidy figure the IMF uses incorporates a variety of supports for fossil fuels, including not pricing for local air pollution, climate change and environmental costs, as well as undercharging for consumption taxes and undercharging for supply costs.
All fake subsidies.
More fakery…
The climate crisis is worsening.
And the pièce de résistance of fakery…
The U.S. came in second at $649 billion. In other words, the U.S. spent more on fossil fuel subsidies in 2015 than it did on the bloated Pentagon budget ($599 billion in 2015).
The U.S. actually spent $599 billion on national defense… One of the few things the Constitution authorizes Congress to spend money on. Almost all of fossil fuel “subsidies” consist of the tax treatment of expenses.
The U.S. government spent next to nothing on fossil fuel subsidies in FY2016.
The expenses involved in extracting a depleting resource have to be written off as the resource is produced (depletion allowance). Some capital expenditures are allowed to be written off as expenses, rather than capitalized over time. When we drill wells, tangible drilling expenditures (items with salvage value) have to be capitalized. Intangible drilling expenditures (services and materials with no salvage value) can written off as expenses. According to the most recent EIA analysis of energy subsidies, fossil fuels received almost no net subsidies…
The FY2016 numbers actually reflect a negative subsidy for natural gas and petroleum liquids. They also indicate that the solar subsidy has “fallen” to $4.19/mmBtu. The subsidy for solar power is about 1/3 higher than the wellhead price for natural gas.
I’m beginning to believe that “bloated” has become an official part of “Pentagon Budget”.
It could be cut to $10/yr, and the whinny liberals would still declare it to be bloated.
Typical green lies. The fossil fuel industry is one of the most highly taxed in the world. There are mining and oil royalties, super profit taxes, environmental levies, excises (which make up a third of gasoline price at the pump here in Australia) and now carbon taxes to save the world from a problem which isn’t happening. And then the companies have to pay all the other normal business taxes like payroll tax, employee income tax, company tax etc. The tax burden would dwarf Cunningham’s fake subsidies.
Only tax credits are subsidies. Someone is paying for your credit. Everything else is deferring income or expenses…regardless the take is eventually paid.
“…the U.S. spent more on fossil fuel subsidies in 2015 than it did on the bloated Pentagon budget…”
Gee, didn’t try very hard to hide his political views, did he?
He probably lives in one of those places that exclude anyone who isn’t a liberal, so naturally everyone he knows feels the same way.
They usually include the entire Pentagon budget as a subsidy to big oil.
Mr. Middleton, thanks for this excellent post. I’ve wondered how anyone could simultaneously claim that fossil fuels are “subsidized” and complain about the “obscene profits” that those who sell them make. The two concepts don’t go together. I knew about the depletion allowance, but not the rest. As for “tax subsidies,” the idea that when the government decides not to take someone’s money away from them, it is the equivalent of the government giving that person money is simply obscene. It presupposes that the government has first claim on the fruits of every person’s thoughts and efforts. In other words, it institutionalizes slavery.
Liberals live in an upside-down world where not taking is considered a gift while at the same time, not giving is considered a taking.
I would have to study economics to even begin to understand what this article is about.
Sorry to be a total mouth breather on this one.
Okay, that was a useless comment, of course, as far as adding anything to the discussion, but still a gauge of the comprehension skills of some WUWT fans [maybe just one — me], nonetheless.
1/. Decide on your political objectives
2/. Construct a moral narrative on how to achieve them
3/. Construct fake facts to justify your narrative.
4/. Issue constant press release to the MSM
5/. Employ ‘experts’ to further reinforce the idiocy.
6/. Mount witch hunts against any sane normal people
I see it every tax year. If I produced sand and gravel I’d get a domestic production credit. Since I produce oil and gas I am exempted and fully taxed.
In all OECD nations, oil and gas companies pay the HIGHEST EFFECTIVE tax rates of all industry.
Yet people still insist they are “subsidized”.
Yes, by this logic all depreciation and expense allowances for all businesses are subsidies.
You are a retailer. You employ two people? You write off the expense of employing them against your revenues? That’s a subsidy.
Maybe even being allowed to write off the cost of goods bought in against revenues is a subsidy?
Maybe the fact that you do not pay for parking spaces for your customers, maybe that’s a subsidy too?
You sell high fat, high salt products? Like, you sell butter, eggs and table salt? Well, do you pay for the costs of heart conditions which those products give rise to? No? Well that is a subsidy too.
My goodness, you have revenues of a couple hundred thousand a year, and you are claiming only to have a 10% return. But actually we are all subsidizing you to the tune of at least another hundred thousand, maybe as much as a million!
Its dreadful. Why did no-one realize this before now?
In the wake of the “extinction” rally in London a talk radio host was interviewing a protester who claimed, among other things, that fossil fuel industries receive huge subsidies. The interview went something like this:
Interviewer: What do you mean, they receive subsidies?
Interviewee: They get government subsidies.
Interviewer: That’s just not true.
Interviewee: It is true, I read it.
Interviewer: What are you, saying? Oil industries are private corporations with shareholders that make profits. Are you saying the government actually pays these companies to dig oil and coal out of the ground?
Interviewee: I don’t have that information.
Interviewer: So in what way are they being subsidized?
Interviewee: I don’t have the full details to hand.
Interviewer: You don’t seem to know very much about it do you.
I have a fantasy that some day people like Nick Cunningham could be made to run a real company. The results would be most edifying.
Using Cunningham’s logic, every taxed American receives a “subsidy” of $25,000 per year as a standard deduction. How does that compare with Exxon and other oil companies.
I’m with Robert Kernodle, you have to do better than this explanation. You are far too close to the forest to explain the trees.
PLEASE, give us a 30 word ‘definition’ that we can whip out of our wallet and read to the Climate Frightened Dolts. We lose the debate without simple and straight forward retorts.
Thanks in advance.
What, specifically, do you need explained?
Easy: Tax deductions, which all companies get, are not subsidies. Subsidies are a direct transfer of money from the government to a company.
The problem is that there are some subjects that can’t be explained in sound bites.
I think it would useful when indicating subsidies both pos and neg be stated. Fossil fuel subsidies top $5 trillion but no mention of renewable subsidies.
The whole point of the article, which apparently you didn’t even bother to read was that there are no fossil fuel subsidies.
The net subsidy of fossil fuels is clearly far less than zero.
If, say, carrots or broccoli were removed from the world tomorrow, not too many people would complain, much less be inconvenienced.
If fossil fuels were removed from the world tomorrow, or even over a period similar to the carrot/broccoli growing cycle, the result would be economic catastrophe, strife, war, starvation, and deaths running to many billions as the whole of modern human civilization collapsed and humans faced extinction.
These people are pillocks.
A $7 Trillion con-game is hard to take down when governments are the main enablers .
Tens of thousands of fuel poverty deaths each year based on a massive fraud . Who knew ?
It isn’t EXXON that should be sued . Crooked politicians and some bought scientists .
Flim flam men like Gore are just exploiting the largest fraud in history .
What are tens of thousands of fuel poverty deaths worth each year caused by this scam ?
What subsidies to PV farm owners get?
“Britain’s biggest solar farms get more money in taxpayer subsidies than they make from selling the electricity they produce. The plants were encouraged to get off the ground with generous handouts, funded from ‘green taxes’ on fuel bills.
Now many of them make the majority of their cash from the subsidies.
Some farms have been snapped up by private firms, venture capitalists and pension funds which realise they are guaranteed money-spinners, in part because of the Government-backed handouts.”
Read the article from last weeks paper:
https://www.dailymail.co.uk/news/article-7021119/Solar-farms-millions-taxpayer-handouts-make-selling-electricity.html
Hopefully the table of top earners will show below…