The Energy Information Administration in a new report says U.S. subsidies for energy production were $5-13 billion in 1992.
The EIA report is the first major U.S. government study on the subject since 1980. EIA selected a range of $5-13 billion because there is no universally accepted definition of "subsidy" nor a valuation method applicable to every federal program.
It noted, "Direct expenditures for most types of federal energy programs have declined since the early 1980s, while many tax preferences were reduced by the 1986 Tax Reform Act.
EIA found federal subsidies to be widely distributed across a spectrum of energy sources. "Coal and nuclear power are the primary recipients of research and development subsidies, while oil and gas receive tax preferences.
"Renewable energy receives benefits through tax preferences and R&D spending, while conservation receives benefits through direct outlays and through R&D. Subsidies to electric power favor customers of publicly owned utilities and rural electric cooperatives."
EIA said, "It is regulation and not subsidization that has had the greatest impact on energy markets. In recent years, government regulation of the private sector has been used to accomplish what could have been done through direct or indirect government subsidization.
"Regulation produces results that are similar to subsidies. By requiring that certain procedures or practices be followed, costs are increased in the same manner as if a tax were levied.
"Regulation involves no outlay by the government or direct loss of income to the federal treasury, but it does involve costs to some producers and benefits to others."
Expensing tertiary injectants cost the government $20 million in fiscal 1992, the passive loss limitation for working interests in oil and gas properties $100 million, and the deduction for the excess of percentage over cost depletion $1.025 billion.
In the area of energy tax credits, the solar/geothermal tax credit cost $65 million, alternative fuels production credit (mostly tight or coal seam gas) $670 million, and the alcohol fuel credit $80 million in fiscal 1992.
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