Green Scissors Wants Energy Subsidies Cut

As a Congressional “super committee” sets out to hack $1.5 trillion from projected federal deficits in the next decade, a coalition of groups from across the political spectrum is recommending deep cuts in energy spending, targeting everything from fossil fuel subsidies to a favorite Obama administration program for advanced research.

Four organizations produced “Green Scissors 2011” – from the left, the consumer advocate Public Citizen and environmentalist Friends of the Earth, and from the right, the libertarian Heartland Institute and spending watchdog Taxpayers for Common Sense. They said that together they found $380 billion in government spending over the next five years “that is not only wasteful but environmentally harmful.”

Green Scissors budget cuts

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Renewable-energy fans will be pleased that programs supporting fossil fuels such as oil, natural gas and coal are targeted in the report. And few tears would likely be shed in seeing ethanol and nuclear-industry subsidies jettisoned. But “clean coal,” a technology that has both supporters and detractors in the environmental community, is also on the Green Scissors hit list, as are all biofuels subsidies, including those that move beyond food crops for feedstocks.

Green Scissors budget cuts

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The coalition also has unkind words for the Advanced Research Projects Agency-Energy (ARPA-E) program, which provides seed money to private efforts on “truly transformative energy research,” in the words of Energy Secretary Steve Chu, a strong backer. Green Scissors said it found that even with “some positive efforts, much of this program harms the environment or fails to add real value.”

And in one more indication of how difficult reducing deficits by $1.5 trillion through cuts alone would be, it appears that a hefty chunk of the $380 billion offered by Green Scissors might be cuts to nonexistent spending. Green Scissors foresees saving $22.5 billion by eliminating loan guarantees for nuclear energy and $51 billion by cutting loan guarantees for renewable energy. But as the Center for American Progress points out, “the budgetary impact of a guarantee is not the actual size of the guarantee.” The true cost of such programs is about 10 percent of the loan value, accounting for expected losses and fees. That would reduce the savings from the Green Scissors cuts to $2.5 billion and $5.1 billion, respectively.

Pete Danko is a writer and editor based in Portland, Oregon. His work has appeared in Breaking Energy, National Geographic's Energy Blog, The New York Times, San Francisco Chronicle and elsewhere.