Friday, September 25, 2009

Targeting ‘fossil energy subsidies’

It’s official, now. The Obama administration isn’t simply trying to raise federal revenue to pay for its economic recovery programs by taking away oil and gas tax breaks. It wants to eliminate “fossil energy subsidies” to fight global climate change, and it would like the rest of the world to join the effort.

“Over the last few weeks, we have worked to build consensus on important new commitments to phase out fossil energy subsidies over time,” US Treasury Secretary Timothy F. Geithner said during a Sept. 24 press briefing at the G-20 conference in Pittsburgh. “And I can say today, based on the important work of countries around the table, we're seeing a lot of support for that proposal, and we think this will have a dramatic impact on our collective effort to reduce carbon emissions.”

For example, he said that estimates by the Organization for Economic Cooperation and Development suggest that if all countries followed the G-20’s lead in agreeing to phase out fossil fuel energy subsidies over the medium term, this would reduce global greenhouse gas emissions would be 10% lower by 2050. Geithner called this “a very substantial down payment” on US President Barack H. Obama’s objective to reduce global emissions to 50% below 2005 levels by 2050.

Cutting what the administration considers fossil fuel subsidies would not just reduce US vulnerability to future energy price shocks and substantially reduce air pollution, he continued. “Eliminating hundreds of billions of dollars spent on these subsidies would help promote faster growth and improve our capacity to use the taxpayers' resources more effectively for other priorities,” Geithner maintained.

The Obama administration and Congress face many difficult choices if they decide to comply with this G-20 commitment, American Petroleum Institute President Jack N. Gerard warned on Sept. 25.

‟Above all else, [they] should not use this commitment as an excuse to raise energy taxes on American consumers and businesses,” he said. “Does the president really think it wise to eliminate tax provisions that encourage investment in technology and exploration and development and would likely constrict future energy supplies, raise energy costs and kill jobs?”

The pledge to the G-20 also raises questions about the White House’s commitment to efforts such as the Low Income Home Energy Assistance Program, which helps ensure that economically disadvantaged citizens won’t be denied winter heat; the US Strategic Petroleum Reserve; and the Highway Trust fund, Gerard pointed out.

“What America really needs is energy from all sources, including renewables and oil and gas, to fuel its economy and remain competitive in global markets,” he said. “According to the US Energy Information Administration, fossil fuels account for 83% of total domestic energy demand. As our nation attempts to stimulate an economic recovery, now is not the time to lay on new taxes that would stifle job creation and growth.”

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Blogger anupam said...

This step if gets implemented will cetainly reduce the more wasteful usage of hydrocarbons.....and eliminating subsidies on fossil fuels will help the more developing countries...for eg. Indian govt. gives huge subsidy on petrol (Rs. 4.5per litre), Diesel (Rs. 3/ litre), Kerosene (Rs. 17/ litre). this heavy subsidy is causing the Indian PSU's to face 400 crores loss a day...Also people are buying cheaper kerosene and adultrating it with Diesel which is reducing the margins for the OMC's. the topic of today's is to save the environment and it can only be done by less use of fossil fuels and more introduction of green fuels...AND US HAS TO LEAD BY EXAMPLE....

September 29, 2009 at 4:28 AM  
Anonymous Anonymous said...

The US doesn't have to lead by example. This is about power and politics and transfer of wealth.

October 5, 2009 at 5:44 AM  
Anonymous Lynn M. said...

An excerpt of the article states: “Does the president really think it wise to eliminate tax provisions that encourage investment in technology and exploration and development and would likely constrict future energy supplies, raise energy costs and kill jobs?”

You see, here is our problem. The president and his "democrat" comrades in congress are not about doing anything "wise" or prudent. They are about radical change at all costs. There is no way to measure how little Obama cares that he is destroying millions of high paying energy jobs. This is it people, he really doesn't care. He thinks of himself as king of the world, not president of the United States. Destroying American jobs is of little concern to him and the rest of the elite ruling class. These people have no idea where a gallon of gasoline comes from and they don't care. That's the three words that define Obama and all of his cronies. THEY DON'T CARE.

October 10, 2009 at 9:35 AM  

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