Intelligent Energy

Energy subsidy showdown: Fossil fuels, nuclear, biofuels vs. renewables

Posting in Energy

A new report measures federal subsidies for fossil fuels, nuclear and biofuels when they were emerging technologies and compares it to support for renewable energy today.

Renewable energy has snagged just a fraction of the federal subsidies that fossil fuels and nuclear received when they were emerging technologies, according to a new report from venture capital firm DBL Investors.

The report probably isn't surprising to renewable energy backers who have long argued that subsidies for fossil fuels make it impossible to compete. And it's unlikely to settle the debate over ending subsidies for the oil and gas industry. But it does provide a valuable historical view of each energy source and helps explain why they're so dominant today (check out the charts below).

The analysis was conducted by Nancy Pfund, a managing partner at DBL Investors of San Francisco, and Ben Healy, a Yale graduate student and former staff director for the Massachusetts legislature's environment and natural resource committee. Pfund and Healy say -- as far as they know -- they're the first to quantify exactly how the current federal commitment to renewables compares to support for earlier energy transitions.

To be clear, the analysis has its shortfalls. For example, the authors acknowledge the difficulty of determining what should count as a subsidy. The report also doesn't quantify the value of renewable energy mandates nor does include state levels subsidies. And the report only takes data up to 2009, meaning stimulus bill money isn't included.

Even so, the report shows a distinct gap in support between the early days of fossil fuels, nuclear and biofuels and today's emerging technology of renewable energy. The report tracked the actual dollar subsidies to each sector during the first 30 years of those subsidies' existence (check out the chart below for an illustration). It found:

  • Early subsidies to nuclear dwarf all others;
  • Biofuels subsidies had a consistent, linear trajectory and then jumped significantly after policy changes in the mid-2000s

The chart below shows the average annual subsidies to each sector over their lifetimes.

[Via: NYT Green blog]

Photo: Flickr user Brooks Elliott

Related:

Kirsten Korosec

Contributing Editor

Kirsten Korosec has written for Technology Review, Marketing News, The Hill, BNET and Bloomberg News. She holds a degree from Northwestern University's Medill School of Journalism. She is based in Tucson, Arizona. Follow her on Twitter. Disclosure