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How much in subsidies do fossil fuels get anyway?

oil-pumpjackAt least some members of the Obama administration plan to call for an end to fossil-fuel subsidies as part of next week's G20 economic leaders summit, citing positive impacts ranging from improved energy security to combating climate change. But how much does the U.S. government pay? Well, according to a new analysis from the Environmental Law Institute released today, roughly $72 billion between 2002 and 2008.

More than $54 billion of that was in the form of 23 different tax credits for oil, coal and natural gas producers, including those overseas, most of which are permanent provisions of the U.S. Tax Code. Just $18.3 billion was grants and other direct cash for research and development and other pursuits, such as the Strategic Petroleum Reserve.

Birds are chirping over cellulosic biofuels

ALBUQUERQUE—Cellulosic biofuels extracted from native switchgrass could lend a helping hand to imperiled birds that depend on vanishing prairies in the Midwest.

With palm oil plantations overrunning Indonesian rainforests and corn-based ethanol in the U.S. spurring new deforestation abroad, it may seem like biofuels and biodiversity don't mix. That's why ecologist Bruce Robertson at Michigan State University's W. K. Kellogg Biological Station and his colleagues wanted to know how birds and bugs would fare if the U.S. switches from corn-based ethanol production to cellulosic biofuels based on grasses. The U.S. Environmental Protection Agency is pushing these biofuels to help achieve further reductions in greenhouse gas emissions. Switchgrass has been singled out for biofuel production because of its low water requirements and high nutrient efficiency, along with the fact that it is native to the U.S.

Depressed U.S. corn prices suggest that ethanol production is not causing a shortage of the grain

Corn-based ethanol production continues to rise; U.S. farmers planted 87 million acres of corn this year—two million more than the U.S. Department of Agriculture (USDA) had initially estimated in March.  This news has driven down corn market prices, leaving farmers skeptical about the theory that ethanol production has caused a corn shortage and in turn inflated food prices in the U.S.

The U.S. is the world's largest producer of both corn and ethanol, surpassing Brazil in the latter category in 2006.  Since 2002, the year ethanol production began rapidly increasing in the U.S., the rate at which food prices increase has doubled (an increase of $46 per week for a family of four from 2002 to 2009, compared with an increase of $23 per week for the same family over the prior seven-year period).  These simultaneous increases in food costs and ethanol production have left many people concerned over a potential shortage of the grain. The current market prices, however, undermines the correlation between ethanol production and a shortage of the grain.  

Biden brings focus on energy policy to Democratic ticket

By picking Joe Biden as a running mate, Barack Obama may have reassured the electorate about his lack of experience and foreign policy bona fides, according to some pundits. But the coal-state senator may have also taken a step toward shoring up his enviro cred.

The Delaware senator is as serious as a heart attack about energy policy—a point The Wall Street Journal's Jeffrey Ball made this weekend.

Biden has been harping on the need for a new energy initiatives for years. When he sat on a Real Time with Bill Maher panel in the spring of 2006, he called 9/11 a "squandered opportunity" for enacting new socialized energy programs. The American public at that point, he claims, was uniquely united in acting for the greater public good.


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