Fossil Fuel Subsidies

The document details various direct and indirect U.S. tax subsidies for coal, oil, and natural gas, as well as federal R&D funding and overseas financing. It highlights the contradiction between these subsidies and global climate targets, noting that global fossil fuel subsidies reached $5.2 trillion in 2017. The text also analyzes the 'externalities' of fossil fuels, including the social cost of carbon, public health crises, and environmental degradation, while reviewing legislative efforts in the 116th Congress to reform energy tax credits.

• U.S. direct subsidies to the fossil fuel industry are conservatively estimated at approximately $20 billion annually, with 80 percent allocated to crude oil and natural gas and 20 percent to coal.
• Global fossil fuel subsidies are increasing, reaching $5.2 trillion (6.5 percent of global GDP) in 2017, which represents a $500 billion increase from 2015. The largest subsidizers are China, the United States, and Russia.
• The U.S. government provides significant R&D funding for fossil fuels, with a heavy emphasis on coal. Between 2010 and 2017, 91 percent of total fossil R&D money, totaling $1.4 billion, was spent on coal-related research.
• Despite federal investment, Carbon Capture and Storage (CCS) is considered unlikely to sustain the domestic use of coal power due to negative economics and high energy intensity.
• U.S. agencies like the Overseas Private Investment Corporation (OPIC) and the Export-Import Bank (EXIM) provide financing for fossil fuel projects abroad, including a $250 million natural gas project in Jordan and billions in grants and loans for the petroleum sector between 2001 and 2018.
• Fossil fuel externalities—including health, environmental, and societal costs—totaled $5.3 trillion globally in 2015. In the U.S., air pollutants from fossil fuels cause 200,000 premature deaths annually.
• The Trump administration sought to lower the Social Cost of Carbon (SCC) by shifting from a global to a national valuation and increasing the discount rate, potentially reducing the valuation from $36 per metric ton to as low as $1 per metric ton.

APA

Environmental and Energy Study Institute (2019). Fossil Fuel Subsidies. https://www.eesi.org/files/FactSheet_Fossil_Fuel_Subsidies_0719.pdf

Chicago

Environmental and Energy Study Institute. Fossil Fuel Subsidies. 2019. https://www.eesi.org/files/FactSheet_Fossil_Fuel_Subsidies_0719.pdf.

Wikipedia

{{cite report |author=Environmental and Energy Study Institute |title=Fossil Fuel Subsidies |date=July 2019 |url=https://www.eesi.org/files/FactSheet_Fossil_Fuel_Subsidies_0719.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{environmentalandenergystudyinstitute2019fossil, author = {{Environmental and Energy Study Institute}}, title = {{Fossil Fuel Subsidies}}, institution = {Environmental and Energy Study Institute}, year = {2019}, month = jul, url = {https://www.eesi.org/files/FactSheet_Fossil_Fuel_Subsidies_0719.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }