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Fossil Fuels receive $550bn in subsidies globally - Financial Times / IEA


PAD1OH

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The world economy spends more than $550bn in energy subsidies a year, about 75 per cent more than previously thought, according to the first exhaustive study of the financial assistance devoted to oil, natural gas and coal consumption.

The study by the International Energy Agency, the western countries’ oil watchdog, says phasing out subsidies over the medium term, as agreed last year by the G20, would trigger vast savings in energy consumption and carbon dioxide emissions.
FT.com / Global Economy - IEA counts $550bn energy support bill
 


Rhubarbless

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Well if we don’t subsidize fossil fuels people will find out how much they actually cost and might choose other alternatives at an alarming rate.
 

PAD1OH

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amount revised down to 409 billion

While the G20 pledged in 2009 to phase out such fossil fuel subsidies in the "medium term", the hundreds of billions that governments spend each year rose in 2010. The World Bank, economist Lord Nicholas Stern and green groups have also called for their removal.
"Energy markets can be thought of as suffering from appendicitis due to fossil fuel subsidies. They need to be removed for a healthy energy economy," said Birol. "Energy is significantly underpriced in many parts of the world, leading to wasteful consumption, price volatility and fuel smuggling. It's also undermining the competitiveness of renewables."
According to IEA research, 37 governments spent $409bn on artificially lowering the price of fossil fuels in 2010. Critics say the subsidies significantly boost oil and gas consumption and disadvantage renewable energy technologies, which received only $66bn of subsidies in the same year.
Phasing out fossil fuel subsidies 'could provide half of global carbon target' | Environment | guardian.co.uk
 

Tombo

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Well if we don’t subsidize fossil fuels people will find out how much they actually cost and might choose other alternatives at an alarming rate.


Already debunked ad nauseum.




Who else on this forum gets a kick out of the 80 cent "subsidy" they need to cough up for every litre of petrol they put in their car???

What about the emissions related tax they pay on their car???


What about the premium to cover feed in tarriffs that they pay via their eletrcity bill that goes into the pockets of owners of solar panels.


Or the premium they pay on their electricty bill to pay the subsidy for all those windmills that defile our horizons?




etc. etc. etc.
 

riven

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The thing with that number is that it is taken out of context and misunderstood.

First we have to give it context. This debate raged a few months ago in the US. Let’s use their data.
http://polixy.visualsociety.com/files/2010/03/federal_energy_subsidies-600x580.jpg
We see that indeed fossil fuels get much more subsidies. But just remember that these fuels encompass coal, gas and petroleum products.

Now the context: We see that a large part of the so called subsidies are tax breaks. In Robert Rapiers blog r squared, an entire thread was devoted to this. It turns out that the majority of these breaks are applicable to every large company with operations in the US. Not only do oil majors get these but also companies like Google and Microsoft under Section 199 of federal code (which relates to manufacturing). The foreign tax credit is also a major chunk and again applies to every company with overseas operations. Considering that fossil fuels have a far bigger manufacturing base than renewables, it is not surprising that the tax breaks would be much larger.
'Tis the Season for Oil Company Misinformation | R-Squared Blog Posts | Forums

With that in mind we can see that fossil fuels and renewables are in the same ballpark for direct spending subsidies which are not tax related. To give this it’s full context consider the next link.
http://www.finfacts.ie/artman/uploads/4/US-energy-source-june172011.jpg
What we see is that fossil fuels make up more than a whopping 80% of the energy mix for the United States. Indeed we can see that traditional renewable are dominated by hydropower and wood burning; two technologies that are mature and do not receive many direct spending subsidies compared to wind and solar. See page 8 of the following link.
http://www.eia.gov/oiaf/servicerpt/subsidy2/pdf/execsum.pdf

Overall considering the much larger manufacturing base and energy contribution of fossil fuels, it is not surprising that subsidies and tax breaks to these companies are larger. Indeed it is incorrect to label many of these subsidies as any company can apply for them if their manufacturing operations are big enough.

What we do learn is that even though corn ethanol is mandated and heavily subsidized, it still provides for a tiny amount of the US energy infrastructure. With digging we can see the same for wind and solar. The important metric that we need to look for is cost/MWh produced. Without that, quoting absolute numbers are pretty meaningless.

Overall this situation is repeated for the European and Asian situations. However using the US is easier as the information is more freely available at this stage. There is no getting around it; renewable energy solutions are more expensive the fossil fuel alternatives until a clear carbon pricing signal can be calculated. When that times, a large price shock will occur when people have to fork out much more for their energy costs.
 

Tombo

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The thing with that number is that it is taken out of context and misunderstood.

First we have to give it context. This debate raged a few months ago in the US. Let’s use their data.
http://polixy.visualsociety.com/files/2010/03/federal_energy_subsidies-600x580.jpg
We see that indeed fossil fuels get much more subsidies. But just remember that these fuels encompass coal, gas and petroleum products.

Now the context: We see that a large part of the so called subsidies are tax breaks. In Robert Rapiers blog r squared, an entire thread was devoted to this. It turns out that the majority of these breaks are applicable to every large company with operations in the US. Not only do oil majors get these but also companies like Google and Microsoft under Section 199 of federal code (which relates to manufacturing). The foreign tax credit is also a major chunk and again applies to every company with overseas operations. Considering that fossil fuels have a far bigger manufacturing base than renewables, it is not surprising that the tax breaks would be much larger.
'Tis the Season for Oil Company Misinformation | R-Squared Blog Posts | Forums

With that in mind we can see that fossil fuels and renewables are in the same ballpark for direct spending subsidies which are not tax related. To give this it’s full context consider the next link.
http://www.finfacts.ie/artman/uploads/4/US-energy-source-june172011.jpg
What we see is that fossil fuels make up more than a whopping 80% of the energy mix for the United States. Indeed we can see that traditional renewable are dominated by hydropower and wood burning; two technologies that are mature and do not receive many direct spending subsidies compared to wind and solar. See page 8 of the following link.
http://www.eia.gov/oiaf/servicerpt/subsidy2/pdf/execsum.pdf

Overall considering the much larger manufacturing base and energy contribution of fossil fuels, it is not surprising that subsidies and tax breaks to these companies are larger. Indeed it is incorrect to label many of these subsidies as any company can apply for them if their manufacturing operations are big enough.

What we do learn is that even though corn ethanol is mandated and heavily subsidized, it still provides for a tiny amount of the US energy infrastructure. With digging we can see the same for wind and solar. The important metric that we need to look for is cost/MWh produced. Without that, quoting absolute numbers are pretty meaningless.

Overall this situation is repeated for the European and Asian situations. However using the US is easier as the information is more freely available at this stage. There is no getting around it; renewable energy solutions are more expensive the fossil fuel alternatives until a clear carbon pricing signal can be calculated. When that times, a large price shock will occur when people have to fork out much more for their energy costs.

And also that they count among "subsidies" the normal concession that any multinational gets from dual tax treaties that allow them to avoid paying double taxation across two jurisdictions.


We shouldn't have to repreat this over and over again just because some shill reposts such garbage.


To put it into perspective. That misleadingly inflated figure covering total global oil consumption (consider the amount of energy contribution to our incomes that provieds, versus the sorts of figures racked up by those "alternatives" that contribute nothing (actual need 100% fossil fuel backup).

Spanish solar (not wind) direct subsidies alone - €126 billion = $165 billion. Real money :shock: in one country alone, which makes zero ecoonmic contribution.
Yet by failing to control the program’s cost, Zapatero saddled Spain with at least 126 billion euros of obligations to renewable-energy investors
http://www.bloomberg.com/news/2010-10-18/spanish-solar-projects-on-brink-of-bankruptcy-as-subsidy-policies-founder.html
 
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owedtojoy

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And also that they count among "subsidies" the normal concession that any multinational gets from dual tax treaties that allow them to avoid paying double taxation across two jurisdictions.


We shouldn't have to repreat this over and over again just because some shill reposts such garbage.


To put it into perspective. That misleadingly inflated figure covering total global oil consumption (consider the amount of energy contribution to our incomes that provieds, versus the sorts of figures racked up by those "alternatives" that contribute nothing (actual need 100% fossil fuel backup).

Spanish solar (not wind) direct subsidies alone - €126 billion = $165 billion. Real money :shock: in one country alone, which makes zero ecoonmic contribution.


Spain's Solar Deals on Edge of Bankruptcy as Subsidies Founder - Bloomberg
Well, now we know.

If a renewable energy company gets any sort of a concession, it is a SUBSIDY.

if a fossil fuel company gets the same deal, it's "the normal concession that any multinational gets from dual tax treaties that allow them to avoid paying double taxation across two jurisdictions".

Ever notice the people pushing this pap also deny the facts of climate change? Qui bono? Who benefits?
 

riven

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Well, now we know.

If a renewable energy company gets any sort of a concession, it is a SUBSIDY.

if a fossil fuel company gets the same deal, it's "the normal concession that any multinational gets from dual tax treaties that allow them to avoid paying double taxation across two jurisdictions".

Ever notice the people pushing this pap also deny the facts of climate change? Qui bono? Who benefits?
And as I clearly pointed out there are two forms to those subsidies regardless of the energy source; tax breaks on tax and direct operations subsidies. What is being unfairly inferred is that fossil fuel companies should not be receiving such large tax breaks despite that fact that most of our energy resources come from them. I dont deny climate change and I work on CO2 and energy efficiency projects. I also dont deny that renewables and clean fossil fuels will lead to cost increases in our energy future. Nor do I beat around the bush and forward any particular ideal. There are pros and cons to our current energy mix and our future energy mix. I look to realistic behaviour and currently, in Germany that means more gas and more coal with allusions to increasing renewable energy in the future.
 

owedtojoy

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And as I clearly pointed out there are two forms to those subsidies regardless of the energy source; tax breaks on tax and direct operations subsidies. What is being unfairly inferred is that fossil fuel companies should not be receiving such large tax breaks despite that fact that most of our energy resources come from them. I dont deny climate change and I work on CO2 and energy efficiency projects. I also dont deny that renewables and clean fossil fuels will lead to cost increases in our energy future. Nor do I beat around the bush and forward any particular ideal. There are pros and cons to our current energy mix and our future energy mix. I look to realistic behaviour and currently, in Germany that means more gas and more coal with allusions to increasing renewable energy in the future.
If you don't deny climate change then you must surely agree that the cost of pollution and the malignant effects of climate change must be included when fossil fuels are costed, if that costing is to mean anything.

In the sense that fossil fuel companies do not pay for negative externalities, they are receiving a massive subsidy over & above what they get already.
 

riven

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If you don't deny climate change then you must surely agree that the cost of pollution and the malignant effects of climate change must be included when fossil fuels are costed, if that costing is to mean anything.

In the sense that fossil fuel companies do not pay for negative externalities, they are receiving a massive subsidy over & above what they get already.
I do but I also will point out that living by our current means of energy use is going to be extremely difficult. In thgat sense the difficult choices that are needed and will be needed to adapt our energy infastructure will keep being put down the line. Not only that but politicians will not perside over increasing energy bills on their electorate until they have little to no choice meaning that we will continue to use fossil fuels.
For avoiding action take the keystone issue in the US. That oil is still entering the US market but by more polluting means. Or the US will acquire this lump of oil from the middle east. The environmentally friendly option here would actually have been to build the line to ensure that the most efficient means for transporting said energy is used. There are currently no plans to decrease US oil consumption by the amount that the keystone offers so reduction and alternatives would not work.
 

Agnotologist

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What is missing from the above posts on subsidies is that fossil fuels received greatly larger subsidies in the past in the e4stablishment of them as staples of the economy. Renewables are not receiving the same encouragement; not by a long way. The subsidies for oil and gas (with less to coal) even now outpace renewables by a factor of more than five (in the US it is about 12). That disregards the health effects and the relative costs that overwhelmingly favour renewables.

The IEA, in its report that includes the figure quoted in the posts above, went on to estimate that phasing out the subsidies to fossil fuels would reduce GHGs by as much as half of the needed reduction by 2035.
 

Tombo

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What is missing from the above posts on subsidies is that fossil fuels received greatly larger subsidies in the past in the e4stablishment of them as staples of the economy. Renewables are not receiving the same encouragement; not by a long way. The subsidies for oil and gas (with less to coal) even now outpace renewables by a factor of more than five (in the US it is about 12). That disregards the health effects and the relative costs that overwhelmingly favour renewables.

The IEA, in its report that includes the figure quoted in the posts above, went on to estimate that phasing out the subsidies to fossil fuels would reduce GHGs by as much as half of the needed reduction by 2035.

More lies. This is Wiki syndrome gone mad.

I write it on the interwbbie.
I press "publish" on the interwebbie.
I read it no the interwebbie.


It must be trues. :roll:
 

riven

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What is missing from the above posts on subsidies is that fossil fuels received greatly larger subsidies in the past in the establishment of them as staples of the economy. Renewables are not receiving the same encouragement; not by a long way. The subsidies for oil and gas (with less to coal) even now outpace renewables by a factor of more than five (in the US it is about 12). That disregards the health effects and the relative costs that overwhelmingly favour renewables.

The IEA, in its report that includes the figure quoted in the posts above, went on to estimate that phasing out the subsidies to fossil fuels would reduce GHGs by as much as half of the needed reduction by 2035.
Actually very little of that is true. Yes fossil fuels have received subsidies in the past but the level of subsidies were not there to make the industry a standard. The only time this happened was around '79 for obvious reasons. It is also interesting to note that subsidies are increasing now (due to more difficult finds) but the rate of federal profit remains good (i.e. tax returns outweigh subsidy).
http://www.cnie.org/NLE/CRSreports/10Jun/R41227.pdf

In any case it is not valid to say that in the past etc etc because renewables were not there. We could hardly start giving renewables 100 years worth of subsidies in the next decade now could we?

Finally you have not read any my posts if you still contend with this without context
The subsidies for oil and gas (with less to coal) even now outpace renewables by a factor of more than five (in the US it is about 12).
First my data shows this to be entirely false on many level in an absolute sense and in a per MWh sense. But as I have shown the subsidies or tax breaks are bigger becuase the fossil fuel industry is much larger than the renewable industry. Indeed when you take tax breaks out of the equation and look at direct subsidies only, renewables (dominated by solar, wind and ethanol) are in the same ballpark as that which are supplying more than 80% of US energy; fossil fuels.
 
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PAD1OH

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Spanish solar (not wind) direct subsidies alone - €126 billion = $165 billion. Real money :shock: in one country alone, which makes zero ecoonmic contribution.


Spain's Solar Deals on Edge of Bankruptcy as Subsidies Founder - Bloomberg
I remember at the time searching for the source of the 126 billion figure. Ben Sills had mentioned it a few months before the article you posted. what he said then was

Renewable-power generators will receive 6.3 billion euros in subsidies this year compared with 5 billion euros in 2009, and they may get more than 126 billion euros in subsidies over the next 25 years under the existing tariff regime, the Industry Ministry said in a report published by Expansion newspaper on its website today.
http://www.bloomberg.com/news/2010-04-29/spain-******************************s-solar-bubble-and-loses-investors-to-avoid-greek-style-crisis.html

so you can spin it/misinform/lie all you want but MAY receive €126 billion over 25 years is very different from ""direct subsidies alone.

of course he doesn't post the report so we can't check what it actually said.
 

Agnotologist

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Actually very little of that is true. Yes fossil fuels have received subsidies in the past but the level of subsidies were not there to make the industry a standard. The only time this happened was around '79 for obvious reasons. It is also interesting to note that subsidies are increasing now (due to more difficult finds) but the rate of federal profit remains good (i.e. tax returns outweigh subsidy).
http://www.cnie.org/NLE/CRSreports/10Jun/R41227.pdf

In any case it is not valid to say that in the past etc etc because renewables were not there. We could hardly start giving renewables 100 years worth of subsidies in the next decade now could we?

Finally you have not read any my posts if you still contend with this without context

First my data shows this to be entirely false on many level in an absolute sense and in a per MWh sense. But as I have shown the subsidies or tax breaks are bigger becuase the fossil fuel industry is much larger than the renewable industry. Indeed when you take tax breaks out of the equation and look at direct subsidies only, renewables (dominated by solar, wind and ethanol) are in the same ballpark as that which are supplying more than 80% of US energy; fossil fuels.
Then, I would suggest that you check your data and question your sources. Your argument is nonsensical. Read the report and you will find the ratio of subsidies. Read the Report and you will find the claim about the impact of the phasing out of subsidies. Read the report and you will find how subsidies were greater in the past than they are now - not long ago they approached one trillion dollars.

Further, if you had even a nodding acquaintance with social history you would know how heavily oil and gas were subsidized and coal, which, by the way, is not now heavily subsidized and is dying a natural death.

I read the report some time ago as part of preparation for a Public debate that I may be having with the Member of Parliament for my riding - and, possibly, the Minister of Finance who represents part of the same city.

That debate is tentatively agreed but I am still sceptical that Prime Minister Harper, who controls every public act of his caucus (and Ministers) will not nix it.
 

Pat Gill

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riven,

Perhaps its news articles such as this one which inform public opinion.

Pennsylvania to forgo $24 billion in fracking royalties

but I’ve been confused about legislation that would impose an “impact fee” on shale gas producers instead of the traditional volume-based royalty structure used by other states. The loss of revenues to the state over the next 20 years using the “impact fee” could be approximately $24 billion using current gas prices. If gas prices doubled (they are currently at 10-year lows), losses to the state could exceed $48 billion or more. The energy states of North Dakota, Wyoming, Texas and Oklahoma historically have earned substantial revenues from energy royalties. It seemed odd that Tom Corbett, the Pennsylvania governor who received substantial campaign contributions from gas producers, barred his shale gas commission from even considering a royalty or gas tax.




Pennsylvania to forgo $24 billion in fracking royalties | MuniLand
Kinda makes our corrib problem seem insignificant.
 

riven

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Then, I would suggest that you check your data and question your sources. Your argument is nonsensical. Read the report and you will find the ratio of subsidies. Read the Report and you will find the claim about the impact of the phasing out of subsidies. Read the report and you will find how subsidies were greater in the past than they are now - not long ago they approached one trillion dollars.

Further, if you had even a nodding acquaintance with social history you would know how heavily oil and gas were subsidized and coal, which, by the way, is not now heavily subsidized and is dying a natural death.

I read the report some time ago as part of preparation for a Public debate that I may be having with the Member of Parliament for my riding - and, possibly, the Minister of Finance who represents part of the same city.

That debate is tentatively agreed but I am still sceptical that Prime Minister Harper, who controls every public act of his caucus (and Ministers) will not nix it.
So lets see
The subsidies for oil and gas (with less to coal) even now outpace renewables by a factor of more than five (in the US it is about 12)
So that is you; 12.
Reality:

What my data pointed out if you take all concessions (tax) away, fossil fuels are similar to renewables excluding ethanol, hydro and timber.
http://polixy.visualsociety.com/files/2010/03/federal_energy_subsidies-600x580.jpg
http://www.eia.gov/oiaf/servicerpt/subsidy2/pdf/execsum.pdf (Page 8)

But then you ask me to read the report and ask for ratio of subidies: hmmm
Page 6 nd 7 will do that for you
http://www.eia.gov/oiaf/servicerpt/subsidy2/pdf/execsum.pdf

AS I said subsidies in the past are always greater but renewables did not exist in their current form them. So how can you subsidise an industry from the past?

And nodding history; prove that one coal mine was subsidised? Regardless that is not the point. I am looking ofr key integration into our energy infastructure. For liquid fuels, I see nought. For electricity I see proce increases. Nobody can argue at this time against either; go ahead.

I am not saying that renewables are bad. As we live now, yes they are. Because we do not want to pay the cost associated with mitigation of CO2. Look at Germany; more nukes power from Czeck, open old coal plants and more gas from Noord stream. Renewables; 2021; goals, future, but no 'I will stept down if xyz'. All the while, coal, coal, coal.
 

Agnotologist

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I have not the faintest idea why you would take away any concessions. A subsidy is a subsidy whatever the form. That report identifies 250 mechanisms by which fossil fuels are subsidized in one way or another and in one jurisdiction or another.

And, what is the relevance of saying that the renewables did not exist 100 years ago? Does the non existence of subsidies to non existent resources make a case that they are subsidized more than something that did exist: was heavily subsidized and hardly taxed at all 100 years ago?

The Health costs of fossil fuels alone would add multiples to the calculated cost of their subsidies.
 

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