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disproportionate or distortionary impacts on particular fuels; specific energy tax expenditures that are modified or repealed in the proposals; and baseline subsidies that remain untouched.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.
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.
Within the United States, the cost of energy subsidies to taxpayers is both substantial and often not properly documented. Regular review to evaluate the fiscal costs of these policies; their impact on market structure, competiveness, and environmental quality; and their ability to achieve stated goals is prudent.
My comments focus on three main issues:
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.
The United States now produces as much crude oil as ever – over 3.4 billion barrels in 2015, just shy of the 3.5 billion record set in 1970. Indeed, the U.S. has become the world’s No. 1 oil and gas producer. The oil production boom has been aided by tax provisions and other subsidies that support private investment in infrastructure for oil exploration and development. Federal tax preferences, for example, enable oil and gas producers to deduct capital expenditures faster, or at greater levels, than standard tax accounting rules typically allow, boosting investment returns.
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.
Although nuclear power is a source of low carbon electricity, it is by no means a clear solution to the challenge we face in reducting greenhouse gas emissions. This presentation discusses common metrics to assess the most cost-efficient source of ghg emissions and reviews multiple studies indicating that new reactors are an expensive option relative to alternatives, and getting more so each year. Cost escalation, lengthening delivery times on reactor projects, and oft-ignored concerns about proliferation create significant headwinds for the nuclear pathway. In contrast, competitors cont