Propping Up the Fossil Fuel Industry

Talking Points Memo reports that Congressman Joe Barton thinks we need to keep subsidizing the fossil fuel companies to keep them from going broke:

"Over time if you put so many disincentives against any U.S. manufacturing or production company, or oil and gas exploration company, they'll go out of business," Barton said.

Barton, perhaps the oil and gas industry's staunchest support on Capitol Hill, says the subsidies for the industry should remain unchanged "so long as you believe that you believe in the free market capitalist system and they should be headquartered in the United States."

While Barton's comment is outrageous (and irony free when it comes to the question of free enterprise), so is the fact that these subsidies are still in place. Consider Barton's choice of words: cutting subsidies would create "disincentives" for oil and gas companies.

The Environmental Law Institute released a study in 2009 that found that U.S. fossil fuel subsidies far exceeded support for renewable energy over from 2002 to 2008:
President Obama has proposed cutting these subsidies by $46 billion over the next ten years.

Even in the face of these facts, critics complain about subsidies for renewable energy, saying that wind turbines and solar panels should compete on their own. But there is a rationale for these breaks: these are new industries with developing technologies, significant public benefits and large potential for future growth.

On the other hand, the oil and gas business is mature (having been around for more than a century) with standardized technologies, significant public costs and little potential for future growth.