This report is one of a series of analyses of public incentives directed toward energy resources. The purpose of the series is to gain insights into the kinds and amounts of public incentives that could be required to induce 20% of the nation's energy budget from renewable resources by the year 2000. The initial analysis focused on federal incentives used to stimulate traditional energy production.
Energy Subsidies within PJM: A Review of Key Issues in Light of Capacity Repricing and MOPR-Ex Proposals
In its proposed tariffs to remove potential distortions caused by subsidies in capacity markets, PJM includes a number of limitations and exclusions that appear to result in unequal evaluation of subsidies across different fuel cycles. This will likely impede PJM’s core objective of ensuring competitive, nondiscriminatory auctions in the wholesale capacity market.
This review assesses the House and Senate tax reform proposals as they relate to the energy sector. Three main areas are examined: cross-cutting changes to tax rates or baselines and whether some of them will have disproportionate or distortionary impacts on particular fuels; specific energy tax expenditures that are modified or repealed in the proposals; and baseline subsidies that remain untouched.
Countries in the G20 have committed to phase out ‘inefficient’ fossil fuel subsidies. However, there remains a limited understanding of how subsidy removal would affect fossil fuel investment returns and production, particularly for subsidies to producers. Here, we assess the impact of major federal and state subsidies on US crude oil producers.
Presentation at the NPEC Public Policy Fellowship Retreat in March 2017. The meeting was convened and hosted by the Nonproliferation Policy Education Center. The slides evaluates many of the arguments people make to support increased subsidies to nuclear and finds them wanting.
All 14 current rationales for mandating or subsidizing uncompetitive coal and nuclear plants lack technical merit or would favor competitors instead. Subsidizing distressed nuclear plants typically saves less carbon than closing them and reinvesting their saved operating cost into severalfold-cheaper efficiency. Carbon prices, not plant subsidies, best recognize decarbonizing attributes.
PJM Interconnection is the regional transmission operator (RTO) serving more than 60 million customers in 13 states and the District of Columbia, mostly in the mid-Atlantic region of the United States. Incumbent base load generators have complained that subsidies to renewable resources have been cutting their ability to win capacity market auctions, stripping them of revenue. They have been proposing adjustment factors that would improve their competitive position by adjusting bid prices to exclude the subsidy.
The federal government of the United States remains custodian and manager of a large amount of fossil fuels on public lands. While sales of minerals do bring in some revenue to the government, there are many elements of federal management that result in artificially low realized revenues for taxpayers or subsidize extractive activities. Key findings of this review include:
This presentation provides an overview of the long history of fossil fuel subsidies in the United States, key milestones in reporting transparency, and remaining data challenges in assessing and quantifying the many pathways that continue to subsidize fossil fuel extraction and consumption today.
In January 2016 the US Secretary of the Interior announced a moratorium on new coal leasing on public lands pending completion of a comprehensive review. Nearly 90% of coal produced from public lands is from leases in the Powder River Basin (PRB) of Wyoming and Montana.