Taxpayers Pay a Whopping $20 Billion in Fossil Fuel Subsidies Every Year

Meanwhile, Trump says Puerto Rico has "thrown our budget a little out of whack."

12 OCT 2017

American taxpayers spend a whopping $20 billion to subsidize the fossil fuel industry every year, according to a new report published by Oil Change International.

The report, released on Tuesday, provides a comprehensive analysis of federal and state subsidies for the production of oil, gas and coal. It concludes that $20.5 billion a year on average in 2015 and 2016 was used to subsidize the fossil fuel industry, with $14.7 billion going towards federal subsidies and $5.8 billion going towards state-level subsidies.


The report comes at a particularly pertinent time. It was published on the same day that President Trump landed in Puerto Rico, which has been devastated by a hurricane that many climate scientists argue was intensified by climate change.

"I hate to tell you, Puerto Rico but you've thrown our budget a little out of whack because we've spent a lot of money on Puerto Rico," Trump said, before adding that even though the government's efforts were "dangerous" and "expensive," the President considered the work a "great honor."

This quote in conjunction with the new report reveal how much more focused our government is on subsidizing companies that have knowingly contributed to the majority of climate change than they are concerned with the health and well-being of their citizens. Instead of removing subsidies for an industry that has caused billions of dollars of damage, the average taxpayer is left footing the bill for disasters like Hurricane Maria.

The findings of the report are especially insulting when you consider that the cost of the subsidies are nearly equivalent to 10 public programs and services that Trump plans on cutting in his proposed 2018 budget.


"Every taxpayer dollar wasted subsidizing this industry takes us further from a stable climate and threatens our families with disasters made worse by climate change," said Janet Redman, US Policy Director of Oil Change International and principal author of the report.

"No tax plan that leaves in place a 20 billion-dollar transfer of wealth from American taxpayers to one of the country's most profitable and polluting industries can be considered credible."

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Not only does the report reveal the extent to which the federal government subsidized the fossil fuel industry, it also reveals why these subsidies continue to exist.

The report concludes that in the 2015–2016 election cycle, members of Congress received $350 million in campaign contributions and lobbying expenditures from the fossil fuel industry. With an 8,200 percent return on investment, it is unsurprising that legislation like the Obama administration's "Repeal Big Oil Tax Subsidies" bill, which would have rerouted fossil fuel tax breaks to the renewable energy sector, have been unable to pass the Senate.

Instead, the report found that the permanent tax breaks given to the fossil fuel industry are seven times larger than those to the renewable energy sector. And, despite the robust science that shows fossil fuel expansion must stop immediately to meet international climate goals, the US spent an average $2.5 billion in 2015 and 2016 subsidizing the exploration of new fossil fuel resources.

"While the rest of the world moves toward a renewable energy future, dirty energy defenders in the Trump administration are using our taxpayer dollars to promote dangerous new fossil fuel development," said Redman.

"Until we separate oil and state, the dirty energy money cycle of fossil fuel contributions going into Congress and oil, gas and coal subsidies coming out will stymie our chances at transitioning the energy sector and staving off worsening climate disasters."

The report concludes by arguing for an immediate end to all tax breaks that support fossil fuel exploration and production, while calling on members of Congress to reject campaign donations from the industry.

"For members of Congress who consider themselves climate champions, eliminating the subsidies that drive fossil fuel expansion and climate pollution is a critical starting point," said Redman.