Oh No Joe Biden Is Being Mean To Oil And Gas Companies, Might Not Even Give Them More Free Money!
Among the executive orders on climate action Joe Biden signed last week, we noticed the accompanying fact sheet contained some very specific language on the matter of eliminating federal subsidies for fossil fuels. The order, the administration said,
directs federal agencies to eliminate fossil fuel subsidies as consistent with applicable law and identify new opportunities to spur innovation, commercialization, and deployment of clean energy technologies and infrastructure. [Emphasis added]
That's actually pretty important language, since an executive order can only tell federal agencies in the Executive Branch to do things, not actually make up laws. (Donald Trump never seemed very clear on that, but Joe Biden knows what presidents can and can't do.) The distinction matters a heck of a lot, as this nice 'splainer at Grist explains: Biden's power to end fossil fuel subsidies is actually somewhat limited, since most subsidies for fossil fuel industries are baked into laws passed by Congress, especially the tax code. But the changes he can make are nonetheless pretty significant, especially when it comes to US funding of energy projects overseas.
Grist notes that, like carbon dioxide and methane, the very definition of "subsidies" for fossil fuel can be a bit gaseous, so the amount by which the federal government is propping up polluting industries varies, too.
Subsidies aren't blank checks from the government: They usually take the form of tax breaks, regulatory loopholes, or anything else that gives a particular industry a leg up. The estimates for the U.S. run from around $20 billion to as much as $650 billion a year, if you think fossil fuel companies should be paying the government for all the damages from their pollution.
One of the best available analyses comes from the research and advocacy organization Oil Change International, which calculates that the federal government funnels a whopping $15 billion every year into the production of fossil fuels, thanks in part to the energetic efforts of fossil fuel lobbyists. (That doesn't account for the $14.5 billion in subsidies to bring down gas prices and utility bills, making fossil fuels more affordable, or the roughly $2 billion spent investing in oil, gas, and coal projects overseas.)
Collin Rees of Oil Change International says that since getting Congress to agree to stop subsidizing fossil fuels is a tall order, Biden's options for executive action are limited, hence that "as consistent with applicable law" line. Even so, directing agencies to eliminate subsidies over which they do have control could mean chopping "a few billion dollars" annually, which we hear adds up after a while — like 20 percent of the federal subsidies going to fossil fuel annually.
As the article points out, some agencies, like the Justice Department and the Energy Department, could significantly change how they enforce existing regulations:
In 2015, for instance, the Justice Department reached a settlement with BP over the Deepwater Horizon oil spill, promising that the company would have to pay $20.8 billion in damages for leaking oil all over the Gulf of Mexico. But the settlement turned out to be tax-deductible, meaning that BP could write off $15.3 billion of the penalty. Under a Biden administration, the Justice Department could close that kind of loophole, Rees said.
Oh yes, let's! And while the amounts of money that can be affected by executive action may not be enough to bring Big Oil to its knees, it would send the message that the US is committed to no longer subsidizing greenhouse gases. Getting Congress to go along with serious changes to the tax code, though, will be a steeper climb — which isn't to say it's not worth pursuing, especially as the public starts seeing the industry as pariahs.
Andrew Logan, the senior director of oil and gas at Ceres, a sustainability nonprofit ... [said] the executive order could damage the industry's image. "What they really don't want to do is become the next tobacco," Logan said. Dwindling support for fossil fuels could lead banks and investors to steer clear of oil and gas companies in the future.
A substantial chunk of the public may now be ready to actually pressure Congress to act, which might get Biden more traction on reducing fossil fuel subsidies than Barack Obama had in 2012, when Senate Republicans killed Obama's effort to end tax breaks for Big Oil. (Also, how about we get rid of the filibuster? And use Obama's hypnotic mind control techniques on Joe Manchin?)
Biden's executive orders also specify another area where the US can make some some serious headway on climate sans Congress. Biden called for US foreign policy nabobs to
identify steps through which the United States can promote ending international financing of carbon-intensive fossil fuel-based energy while simultaneously advancing sustainable development and a green recovery.
Specifically, the State Department was ordered to work with the Treasury and Energy secretaries to use the leverage of the US Export–Import Bank and the Development Finance Corporation to make international energy investments green. John Kerry, Biden's climate envoy, said during a discussion at the World Economic Forum that the US aims at "ending international finance of fossil fuel projects with public money."
That's a huge change from the prior administration, which sought to promote US fossil fuel interests abroad; former Energy Secretary Rick Perry, you'll recall, insisted that oil development would prevent rape in the third world, because the lights would be on and women would be safe — as if Big Oil and its pricey infrastructure were the only source of electricity. (It isn't! Lets talk microgrids!) There was also some slight mishegas with Perry and oil or gas companies in Ukraine, who can even say, we're sure it was nothing.
And hooray for Kerry, he also says he opposes international investment in natural gas as a "bridge" fuel, because gas means big greenhouse emissions from methane leaks and flares, and it's just plain not efficient, as Kerry reiterated:
The problem with gas is if we build out a huge infrastructure for gas now to continue to use it as the bridge fuel, when we haven't really exhausted the other possibilities, we're going to be stuck with stranded assets in 10, 20, 30 years.
Nothing like a damn greenie hippy who knows a thing or two about industrial policy and finance, huh? Let's say it again:
Hot Lincoln makes a lot of sense here https://t.co/X1sEDVa3KY— Molly Jong-Fast🏡 (@Molly Jong-Fast🏡)1611790480.0
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