This summer’s Energy Information Administration (EIA) report on government subsidies to oil, coal, natural gas, nuclear, and renewables in 2010 is causing quite a stir in energy circles. The report finds that U.S. energy subsidies more than doubled from $17.9 billion in 2007 to $37.2 billion in 2010, with all sectors seeing an increase in government subsidy. Renewables saw the biggest increase from $5.1 billion in 2007 to $14.1 billion in 2010.
The single biggest factor explaining the spending increases is the passage of several pieces of legislation in response to the financial slump, including the 2009 American Recovery and Reinvestment Act (ARRA). The ARRA-related programs that account for a large portion of the growth in subsidies for renewables--such as the $4.2 billion in expenditures for grants under Section 1603--are temporary one-time measures and many of them are scheduled to expire in the next couple of years.
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