WELFARE QUEENS OF THE RIGHT:

Get the Energy Sector off the Dole: Why ending all government subsidies for
fuel production will lead to a cleaner energy future—and why Obama has a rare chance
to make it happen. (Jeffrey Leonard, January/February 2011, Washington Monthly)

If President Obama wants to set us on a path to a sustainable energy future—and a green one, too—he should propose a very simple solution to the current mess: eliminate all energy subsidies. Yes, eliminate them all—for oil, coal, gas, nuclear, ethanol, even for wind and solar. It will be better for national security, the balance of payments, the budget deficit, and even, believe it or not, the environment. Indeed, because wind, solar, and other green energy sources get only the tiniest sliver of the overall subsidy pie, they’ll have a competitive advantage in the long term if all subsidies, including the huge ones for fossil fuels, are eliminated. And with anti-pork Tea Partiers loose in Washington and deficit cutting in the air, it’s not as politically inconceivable as you might think.

nergy subsidies are the sordid legacy of more than sixty years of politics as usual in Washington, and they cost us somewhere around $20 billion a year. To put that sum in perspective, that’s more than the State Department’s entire budget. It’s also enough to send half a million Americans to college each year with all expenses paid. Energy subsidies undermine the working of the free market, and they make rational approaches to long-term energy challenges and climate change impossible. They are not an aid to energy independence or environmental stewardship. They are an impediment.

Energy subsidies take many forms. Some of them are direct outlays of taxpayer dollars, like payments to corn producers for ethanol. Most are in the form of tax benefits, such as the deduction for “intangible drilling costs” (labor, repairs, hauling, you name it) in oil exploration—a notoriously abused provision of the tax code. The sheer number of subsidies is part of what makes them so hard to track.

But one thing about them is easy to summarize: they are heavily tilted toward fossil fuels. Government statistics show that about 70 percent of all federal energy subsidies goes toward oil, natural gas, and coal.