Declare Energy Independence

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Research and development (R&D) subsidies are one of the biggest segments. Between 1998 and 2003, the federal government provided $11.8 billion in R&D grants, in roughly equal thirds going to nuclear, fossil fuels, and to efficiency and renewable resources.

Nuclear energy — still an economic problem child with radioactive waste management issues — has been the top beneficiary of federal R&D largesse. Between 1978 and 1999, across Republican and Democratic administrations and Congresses, the federal government spent $26.1 billion on nuclear energy R&D, according to a U.S. Department of Energy study.

But R&D is not the only large-scale energy subsidy. Between 1990 and 2002, oil and gas companies reaped nearly $12 billion as a result of improper reporting of royalties due. Earlier this year, a political firestorm erupted when President Bush’s proposed 2007 budget estimated that oil and gas companies will avoid paying $7 billion in royalties between now and 2011 for producing oil and gas from federal lands and waters. The giveaway is due to production incentives adopted a decade ago when oil prices were a fraction of today’s level.

Favorable tax treatment is another rich source of subsidies. According to NCEP, accelerated depreciation (which allows businesses to write off costs for depreciable property before it actually depreciates) will yield up to $26 billion between 2004 and 2008 for fossil-fuel burning electric utilities.

Citizens Must Demand Change

Redirecting subsidies is an essential component of a strategy that deals with the energy problems on our nation’s doorstep. The necessary elements to do so are clear and well within America’s entrepreneurial and technological capability. They include improving energy efficiency across the board, mandating lower carbon emissions, and replacing oil and other fossil fuels with solar, wind, homegrown biofuels and other clean energy sources that are not under the control of dodgy foreign regimes.

One framework for a new strategy is the idea of “climate stabilization wedges” developed by Robert Socolow, a Princeton University engineering professor. Socolow says that over the next 50 years, technologies can help stabilize the atmosphere’s carbon dioxide concentration at about 200 percent of the preindustrial level (today we are at about 36 percent above the preindustrial level). No single technology can do the whole job, but seven “wedges,” each representing the annual avoidance of 1 billion tons of carbon emissions, add up to achieving the goal. Possible wedges include efficiency, renewably generated power, nuclear energy and carbon capture and storage.

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