Biden plan to end U.S. fossil fuel subsidies faces big challenges

Reuters ^ | December 1, 2020 | By Timothy Gardner

[Oldeconomybuyer]

WASHINGTON - President-elect Joe Biden’s promise to end U.S. fossil fuel subsidies worth billions of dollars a year for drillers and miners could be hard to keep due to resistance from lawmakers in a narrowly divided Congress, including from within his own party.

The challenge reflects just one of the obstacles that Biden will need to overcome as he seeks to usher in sweeping measures to combat climate change and transform the nation’s economy to net-zero emissions within three decades. Biden has said axing fossil fuel subsidies will generate money to help pay for his broader $2 trillion climate plan.

While Biden can take executive action to reverse President Donald Trump’s rollbacks of rules meant to reduce greenhouse gas emissions, reforming tax breaks that allow companies to produce oil, gas and coal more cheaply will require Congress to pass legislation.

Doing so could be hard, even though Biden spent 36 years in the Senate where he is known as a dealmaker.

“It’s dead on arrival in the Senate,” said Gilbert Metcalf, a former deputy assistant secretary for environment and energy at the Treasury Department under former President Barack Obama, referring to any standalone legislation ditching the tax breaks if Republicans maintain control of the chamber.

[Oldeconomybuyer]

[kiryandil]

Not least of which is actually becoming president...

[LuxAerterna]

So what exactly do they mean by “subsidies”? Or is this a codeword to disguise massive increases in taxes and regulation?

[rktman]

:-) I’d like to see the reaction if one were to posit cutting gangreed* deal subsidies. That’d make Krakatoa look like a piker.

*Green new deal. Or was it nude eel.......

[Meatspace]

How about a policy of no subsidies for renewable energy and no subsidies for fossil fuels?

[Zhang Fei]

It’s pretty amazing to see the big lie technique deployed so blatantly and without apology by Reuters. What industry doesn’t get to deduct its operating costs from its tax bill? If we applied this to the green energy sector, would any of them even exist? Never mind tax deductions - without government cash subsidies to these companies, could they last another day?

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[One U.S. tax break, called intangible drilling costs, allows producers to deduct a majority of their costs from drilling new wells. The Joint Committee on Taxation, a nonpartisan panel of Congress, has estimated that ditching it could generate $13 billion for the public coffers over 10 years.

Another, the percentage depletion tax break which allows independent producers to recover development costs of declining oil gas and coal reserves, could generate about $12.9 billion in revenue over 10 years, according to the panel.]

[MeanWestTexan]

“So what exactly do they mean by “subsidies”? “

Dunno. And I’ve worked in O&G my entire adult life, aside from the Army.

Apparently, Democrats consider netting expenses of drilling an oil well against the income made from the well is a “subsidy,” despite every other business in the USA working like that.

[Zhang Fei]

[How about a policy of no subsidies for renewable energy and no subsidies for fossil fuels?]

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What they call subsidies for fossil fuels are tax deductions for operating costs.

[Zhang Fei]

[How about a policy of no subsidies for renewable energy and no subsidies for fossil fuels?]

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Another way of saying this is that greenies think fossil fuel energy companies should be taxed based on their revenues, not their profits after expenses are deducted.

[BobL]

“... if Republicans maintain control of the chamber.”

Well, if a lot of conservatives here and in Georgia have their way, the Dems will control the Senate, so there goes our oil industry.

But to you oil workers (and others) who want to TEACH THE GOP A LESSON by letting the Democrats win. Don’t worry, your jobs will be around for a bit longer, as the first priority for the Dems (after Amnesty) will be seizing your guns - or at least making you a felon if you get caught with one, in any scenario (self defense or otherwise).

See, not so bad!!! Right?

[bigbob]

All forms of energy receive government subsidies in one form or another. You can search to learn about those for oil and gas.

[Mmogamer]

So how do you plan to keep voting gop then getting backstabbed everytime?

[BobL]

“So how do you plan to keep voting gop then getting backstabbed everytime?”

Well, I’ll give Georgia a chance before handing over the country to Marxists. After that, I’ll play it by ear. I don’t consider the country lost just yet, very close to being lost, but not lost - not quite yet!

[faucetman]

Beat me to it!

[Jonny7797]

Not if the scumbags control all 3 branches of government.

GA is the last stand.

[Don Corleone]

GEORGIA...GEORGIA...GEORGIA!!!

[beef]

“So what exactly do they mean by “subsidies”?”

In their minds, building roads is a subsidy for gas and oil.

[beef]

“GA is the last stand.”

That is for sure. The most important job right now is winning GA.

[BobL]

” The Joint Committee on Taxation, a nonpartisan panel of Congress, has estimated that ditching it could generate $13 billion for the public coffers over 10 years...Another, the percentage depletion tax break which allows independent producers to recover development costs of declining oil gas and coal reserves, could generate about $12.9 billion in revenue over 10 years,”

Thanks for the numbers, so maybe $3B a year. I’ll just use $5B in case there are other subsidies and apply it all to gasoline (for simplicity):

So, $5B for 140 Billion Gallons of gas - or about 3.5 cents per gallon. Own a car, drive 12000 miles, burn 600 gallons. Your ANNUAL gasoline cost is $21 cheaper due to the subsidies. Whoopie.

My point being that the subsidies are TINY...especially when you compare it to what Tesla gets and all of the other crap for ‘alternative fuels’. We’ve let the Leftists OWN this issue by letting them continue to talk about the huge oil subsidies...maybe we should fight back a bit?

[Zhang Fei]

[So how do you plan to keep voting gop then getting backstabbed everytime?]

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When faced with a choice between the Tsar and the Bolsheviks, I will choose the Tsar every time. Unfortunately for the Russians, they chose wrong, and paid the price, incurring 50m dead between leadership screwups and deliberate famine. I’m OK with muddling along with the GOP - it’s better than the big screwups that the Democrats are capable of. Before we opt for bullets, we should try ballots first - less chance on getting (possibly our own) blood on the carpet.