Pew Analysis Shows Federal Spending On Energy Is Significant

A new Pew analysis of government spending data finds that the federal role in the energy sector is significant, although smaller in comparison to its role in other sectors, such as transportation. Total federal spending in the sector on tax expenditures and grant programs likely to contain a subsidy was approximately $25 billion in fiscal year 2009, according to the anaylsis, or $212 per household.

‘The United States spends billions of dollars a year attempting to make energy more affordable, cleaner and to reduce our dependence on foreign sources of oil,’ says Marcus Peacock, director of the Subsidyscope project, a Pew Center initiative. ‘As legislators in Washington consider decisions that will affect how our nation consumes and produces energy, this data provides a clearer view of how our government shapes energy policy through its use of subsidies.’

Highlights of Subsidyscope's energy sector analysis include the following:

– In fiscal year 2009, $3.2 billion in federal tax expenditures supported fossil fuels, while $1.5 billion went to assist renewable and alternative fuels. However, renewable energy sources have been receiving an increasing share of tax subsidies, and according to Department of Treasury estimates, these subsidies will increase sharply above the level of fossil fuels over the next few years before trailing off;

– The American Recovery and Reinvestment Act had a significant impact on energy sector programs; federal grants to the energy sector quadrupled in fiscal year 2009 to over $18 billion, due in large part to stimulus funding. Tax expenditures are also expected to increase from $6.3 billion in fiscal year 2009 to $21.2 billion in fiscal year 2012; and

– Stimulus funds to the energy sector have boosted energy conservation and efficiency programs.

Subsidyscope collected and aggregated data from USAspending.gov and other sources to populate two searchable databases of federal energy spending that enable users to query grant or contract information within the sector.

SOURCE: The Pew Charitable Trusts