By James Cartledge, BrighterEnergy
Energy sources from timber to fossil fuels and nuclear power have had “significant” federal incentives over the past 200 years, creating millions of jobs according to analysis from San Francisco-based venture capital firm DBL Investors and Yale University.
The researchers said every great expansion of the U.S. economy can be linked with the discovery of a new energy source. In every single case, the government, often at both the federal and state levels, heavily subsidized that new energy source.
The report, “What Would Jefferson Do? The Historical Role of Federal Subsidies in Shaping America’s Energy Future”, was authored by Nancy Pfund, Managing Partner, DBL Investors and Ben Healey, a Yale University graduate student.
“All new energy industries – timber, coal, oil and gas, nuclear – have received substantial government support at a pivotal time in their early growth, creating millions of jobs and significant economic growth,” said Nancy Pfund.
“Subsidies for these ‘traditional’ energy sources were many, many times what we are spending today on renewables.”
During the early years of what would become the U.S. oil and gas industries, federal subsidies for producers averaged half a percent of the federal budget.
By contrast, the current support for renewables is barely a fifth that size, just one tenth of one percent of federal spending.
The report said that from 1918-2009, the oil and gas industry received $446.96 billion (adjusted for inflation) in cumulative energy subsidies.
Renewable energy sources have received $5.93 billion (adjusted for inflation) for a much shorter period from 1994-2009.
Average annual support for the oil and gas industry has been $4.86 billion (1918-2009), compared to $3.50 billion for nuclear (1947-1999) and $0.37 billion (1994-2009) for renewable energy.
The study also pointed to the “striking divergence” in early federal incentives. For example, federal support for the nuclear industry overwhelmed other subsidies as a percentage of federal budget, but equally striking was the support for oil and gas which was at least 25% higher than renewables, and in the most extreme years 10 times as great.
“The take away from this history lesson is that government support has been and should continue to be an essential component in the growth of emerging energy sources, enabling U.S. technology innovation, job creation and economic expansion.” said Pfund.
Editor’s Note: This news story comes to us as a cross post courtesy of our new content partner BrighterEnergy.org. Author credit goes to James Cartledge.