FEDERAL ENERGY SUBSIDIES

The following are excerpts from a study prepared in April 2008 by the Federal Energy
Information Administration, Federal Financial Interventions and Subsidies in Energy
Markets 2007. The analysis focuses on Federal government subsidies for production of
electricity. The subsidies represent direct payments, tax breaks, federal spending for
research and development and regionally focused federal preference and loan
programs.

The full report may be found at: http://www.eia.doe.gov/oiaf/servicerpt/subsidy2/index.html .

• ”Total Federal energy-specific subsidies and support to all forms of energy are
estimated at $16.6 billion for fiscal year (FY) 2007. Total energy subsidies have
more than doubled in real terms … (since) 1999. Tax expenditures have more
than tripled since 1999… to more than $10.4 billion in 2007.” *

• “Notwithstanding the doubling of Federal energy-related subsidies and support

between 1999 and 2007, and a significant increase in most energy prices over
that period, U.S. energy production is virtually unchanged since 1999.”

• ”The alternative fuel production tax credit, which is largely directed to producers
of coal-based synthetic fuels, also referred to as refined coal, accounted for
about one-half of total tax expenditures related to electricity production in FY
2007. “(A total $2.2 billion to this sector)

(Table from Page V of Executive Summary, available at http://www.eia.doe.gov/oiaf/

servicerpt/subsidy2/index.html)
• “Nuclear programs, renewable programs, and non-fuel-specific electricity
production subsidies and support each ranged from $1 billion to $1.3 billion.”

• The subsidy for natural gas and liquid petroleum used to produce electricity is
$227-million.

The following facts are from a June 2008 report to the House Committee on Natural
Resources. They raise the question: Why, with so many drilling permits issued for
public lands, has production not increased?

The full report may be found at:

http://courtney.house.gov/UploadedFiles/Natural
%20Resources%20energy%20report.pdf

• Between 1999 and 2007, the number of drilling permits issued for development
of public lands increased by more than 361%, yet gasoline prices have also risen
dramatically contradicting the argument that more drilling means lower gasoline
prices.

• Since 2004, the Bureau of Land Management has issued 28,776 permits to drill
on public land yet only, 18,954 wells were actually drilled. Companies retain
nearly 10,000 permits to drill that they are not using to increase domestic
production.