The fossil fuel subsidy denier-in-chief
Fossil fuel companies are getting propped up with billions in tax dollars, but the U.S. energy secretary claims otherwise.
“There are not oil and gas subsidies,” Chris Wright, the top energy official for the U.S. government — which will now provide more than $34 billion a year in subsidies to the fossil fuel industry — told a room full of reporters and climate advocates last week.
Five days later, the Energy Department announced it would deliver $625 million in new subsidies to the coal industry after adding “Tax breaks/tax credits/subsidies” to an ever-expanding list of words its officials are banned from using.
Still, when Wright, the U.S. Energy Secretary and a former fracking executive, sat down for a live interview with New York Times’ David Gelles at Climate Week, he objected when Gelles said that the oil and gas industry enjoys massive tax incentives and publicly funded subsidies. “In the United States, oil and gas and coal are huge taxpayers, and don’t have any subsidies that I’m aware of, and I’ve been in the business for forty years,” Wright said.
Wright’s false claim was quickly amplified by industry allies denying that fossil fuels are propped up by government funding. “The idea that oil and gas receive disproportionately large subsidies is one of the most destructive lies told by the anti-fossil-fuel movement,” wrote Alex Epstein, author of “The Moral Case for Fossil Fuels” and founder of fossil fuel lobbying group the Energy Freedom Fund, in a Facebook post sharing the interview clip. “Good for Chris Wright to set the record straight.”
It was a perplexing assertion from Wright, the lead energy official in the Trump administration, which has allocated more than $4 billion in additional subsidies per year since coming into office, according to the new analysis by advocacy nonprofit Oil Change International (OCI).
OCI calculated fossil fuel production subsidies by adding up tax deductions, low-cost access to public lands, direct appropriations, and other financial backing from the federal government based on the definition of fossil fuel subsidies established by the World Trade Organization. The group found that subsidies had nearly doubled since the group’s last analysis in 2017, totaling an estimated 30,000% return on investment for fossil fuel companies. The new estimate is likely an undercount due to a lack of transparent government data, OCI said.
And it doesn’t include the new $625 million for the coal industry, including $350 million to revive or retrofit existing coal plants. “These funds will help keep our nation’s coal plants operating,” said Wright, days after he denied that such funds exist. Many coal plants across the country have closed as cheaper renewables and gas have replaced the dirtiest, most carbon-intensive fossil fuel.
Why would the U.S. Energy Secretary claim to know nothing about fossil fuel subsidies?
Industry interests “know that it’s not a good look for our public money to be flowing massively to fossil fuel executives and investors and driving the climate crisis as opposed to actually supporting working people,” said Collin Rees, U.S. Program Manager at OCI and the lead author of the report.
The fossil fuel industry spent decades and millions of dollars lobbying for some of the subsidies it now receives, including for contested technologies such as carbon capture. Though carbon capture was sold to the public as a climate solution, companies now receive additional tax incentives under the Trump administration for “enhanced oil recovery” — or the process of injecting captured carbon into wells to access hard-to-reach oil reserves.
That’s not counting “implicit subsidies,” or the external costs taxpayers bear on top of energy prices — including from climate change and local pollution, according to the International Monetary Fund.
U.S. Senator Sheldon Whitehouse (D-Rhode Island), Ranking Member of the House Oversight Committee, has been outspoken on what he calls the fossil fuel industry’s “free-to-pollute business model.”
“Nothing even comes close” to fossil fuel industry subsidies, Whitehouse told ExxonKnews in a statement. “As the corrupt Trump Administration destroys affordable, clean energy, it’s shoveling even more subsidies at the failing coal sector. That’s taxpayer money propping up an industry that turns around and charges those same taxpayers higher energy prices.”
Fossil fuel interests have denied or minimized external costs, too, though they are likely to increase exponentially as the federal government strips environmental and health protections surrounding oil, gas, and coal production. In a recent comment to the EPA encouraging regulators to revoke the scientific basis underpinning greenhouse gas regulation in the United States, the industry trade group Domestic Energy Producers Alliance argued that there has been “No increase in hurricanes globally; no U.S. flood correlation with [greenhouse gases],” and that “Food, water, wildfire, and drought data all show resilience and improvement.”
Genevieve Guenther, author of “The Language of Climate Politics: Fossil-Fuel Propaganda and How to Fight It,” said she believes fossil fuel proponents want to hide the industry’s reliance on subsidies because it “undermines their narrative that the industry does not receive government assistance, but simply supplies a product that the public demands.”
On top of the subsidies granted by the Trump administration, fossil fuel companies enjoy specific tax benefits not available to other industries, including larger capital cost write-offs, deductions, and deferments.
“As we see in the actions of the Trump administration, the U.S. government tilts the playing field in favor of oil and gas,” Guenther said. “Their mantra is that fossil energy is ‘affordable’ energy, but the price of fossil fuels is subsidized by the public and their costs externalized on to the public. In fact, once it’s installed, clean energy is the cheapest energy in human history — without subsidies.”
Killing renewables: “the pro-freedom thing”
While denying the existence of fossil fuel subsidies, industry allies are claiming that clean energy sources are the true benefactors of government assistance — and working to strip what funding renewables did gain during the Biden administration.
“While a few narrow subsidies exist and should be eliminated, the real outlier in the tax code isn’t fossil fuel subsidies but the scale of preferential treatment granted to renewable energy technologies,” reads a June blog from the Cato Institute, a libertarian think tank funded by the Koch brothers and ExxonMobil, which has long advocated against climate action.
“If you can’t rock on your own after 33 years, maybe that’s not a business that’s going places,” said Wright at a press conference last week where he announced the cancellation of $13 billion in funding allocated for clean energy technologies.
Epstein, who recently lobbied Republicans in Congress to further eliminate tax incentives for renewables, claims to help politicians “do the pro-freedom thing on energy.”
Rees, of OCI, pointed out that it wasn’t until the last couple of years that renewables “may have achieved something close to parity with fossil fuel subsidies, after over 100 years of fossil fuel subsidies.”
“The response was immediately to remove all of those subsidies to renewables and triple down on fossil fuel subsidies,” he said. “You want to talk about a free market — that’s what Trump and the GOP chose to do once it was finally something resembling a level playing field, if you ignore all past history.”
Even without subsidies, renewables will continue to be cheaper than electricity generated by fossil fuels, the latest annual report from global financial advisory firm Lazard found.
Networks of fossil fuel front groups have orchestrated campaigns with local community groups to block renewable projects from getting off the ground, reports from Brown University’s Climate and Development Lab and the watchdog organization Energy and Policy Institute have shown.
Quid pro-quo
When Trump was campaigning for president, he offered to fill a wish-list for fossil fuel executives who spent big to help him win. The fossil fuel industry spent a total of $219 million to influence the 2024 election, including money given to Congressional candidates — and the benefits have paid off for all parties involved.
Senator Jim Justice of West Virginia, for instance, helped lead the addition of a credit for metallurgical coal production in the Republican megabill over the summer. Justice’s family owns Bluestone Coal, a company that stands to benefit from that credit, E&E News reported.
“There are some very explicit ways that they are helping themselves,” said Rees. “It is actually impossible to separate oil executives from the people making these decisions in government.”
[Note: A correction has been made to reflect that coal companies have received greater subsidies in the past.]
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We have a say anything authoritarian leadership. Truth doesn't really exist and if it does it is what they say it is.