Oil Receives More Taxpayer Dollars: DTN Finds Oil Industry Subsidized Much Higher Than Ethanol

Business News/Analysis, Federal Agency, Policy

October 13, 2010

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by Todd Neeley (Progressive Farmer) In the eternal mudslinging between supporters and opponents of biofuels, “subsidies” are one of the opponents’ biggest and most painful mud balls.

“If ethanol is such a good idea, why does it need government help?” the opponents demand. Supporters retort that the oil industry is subsidized, too, but that argument often doesn’t seem to win much respect.

It should. The oil industry receives substantial amounts of taxpayer support — by some definitions significantly more than ethanol — a months-long DTN investigation concludes.

Looking at state and federal tax and other incentives available exclusively to the oil industry, DTN’s tally comes to $17.9 billion annually. The comparable figure exclusively for ethanol is $7.1 billion. This does not include tax credits and other incentives that both industries share, such as the blenders’ credit or VEETC.

But oil also benefits from a variety of indirect taxpayer supports, including U.S. military spending to protect the Persian Gulf. Mark Delucchi, a research scientist from the Institute of Transportation Studies at University of California Davis, said in a study that oil’s share of that protection ranges between $6.9 billion and $28.8 billion.

…Adding up the tax deductions, credits and other public benefits the oil industry receives, U.S. taxpayers support oil to the tune of between $133.2 billion and $280.8 billion annually, according to DTN research. READ MORE (Part 1 of series)

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