Estimating U.S. Government Spending on Coal: 2002 - 2010

This analysis identifies a number of federal programs supporting coal, including some that while not directly targeted at coal provide significant benefit to the coal sector.  In total these subsidies provided approximately $25.4 billion in financial support for coal production, transport, use, or waste disposal during the period 2002-2010. The majority of these dollars - $16.2 billion - are attributable to tax benefits. Of these tax benefits, the single largest category was the non-conventional fuels tax credit, providing $12.22 billion to coal. This credit is no longer available to producers of most coal-derived fuels and is set to sunset for all non-conventional fuels from coal by 2014, decreasing total coal support by 47 percent.  Tax subsidies have also long supported coal mining.

Other significant supports include:

  • Subsidies to carbon capture and sequestration (CCS) initiatives, nearly all of which were authorized via the 2009 stimulus bill, the American Reinvestment and Recovery Act. 
  • The Army Corps of Engineers operation and maintenance budget for harbors and inland waterways.  Though not solely benefiting coal, this funding is quite important given that bulk coal is a major commodity user of the Army Corp-maintained transport network.
  • Indirect support for coal through subsidies to low-income power consumers via the Low-Income Home Energy Assistance Program.

The study identifies financial support in aggregate fiscal terms but does not seek to determine how this spending affects coal production or consumption, or whether it ultimately benefits consumers or industry. That type of assessment would require significantly more data and considerably more complex level of analysis, one that exceeds the scope of this study.

Study authors also note that their analysis does not offer normative judgments about the subject of the spending. That is, the identification of coal-specific spending and foregone revenue collection does not constitute a recommendation that these expenditures be changed, but is simply intended to show how federal tax dollars support coal production and use.