Facts, not bias, should drive energy policy
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The late Sen. Daniel Patrick Moynihan (D-N.Y.) once observed that we are all entitled to our own opinions — just not our own facts. Yet there are many interest groups, in pursuit of policy goals, that seem bound and determined to believe just the opposite, presenting distortions and opinions as facts not to be challenged. 

This most recent example is exemplified in the recently released reportTalk is Cheap: How G-20 Governments Are Financing a Climate Disaster.” Unfortunately for the groups behind this report, facts are stubborn and persist in spite of advocacy bias.


In their ongoing war against fossil fuels, the report’s authors distort the facts concerning subsidies and the energy industry. They claim that the U.S. government provides “over $5.7 billion in annual average public financing for oil and gas.” This is almost five times as much as they claim goes to renewables — $1.2 billion.


These figures are directly contradicted by the most recently available data from the Energy Information Administration which shows for fiscal 2013 renewable energy received $13.8 billion in subsidies compared with $2.8 billion in tax provisions related to the oil and gas. Significantly, the categorization of subsidies for oil and gas is misleading in that it includes heating assistance for low-income people and tax deductions that are available to all companies, not just oil and gas companies.

Earlier this year, Dr. Pinar Cebi Wilber, chief economist of the American Council for Capital Formation, wrote about attempts to conflate tax deductions available to all companies with subsidies. She was unambiguous in stating, “Traditional energy producers do not receive subsidies from the United States Government — they take tax deductions much like virtually all other manufacturers.”

 For example, the “dual capacity rule” applies to all companies so that they avoid double taxation on foreign earnings and the domestic manufacturer’s deduction applies to all U.S. manufacturing. The various allegations of subsidies for oil and gas exploration and development have been refuted over and over but environmental advocacy organizations keep making them in the hope that repeating an untruth over and over will someday make it a fact.

Development banks do not provide financing to oil and gas companies to enrich them, they make loans to developing countries to help them escape the devastation of energy poverty affecting over 1 billion people around the globe. Providing investment funds to bring energy to them is a way of providing potable water, refrigeration for drugs and energy to replace dung for cooking. 

Closer to home, the traditional energy sector has catapulted the United States into an era of energy abundance, contributing to the nation’s Gross Domestic Product (GDP), supporting millions of jobs and resulting in lower energy prices for Americans.

Subsidies, which represent special treatment for specific industries, should be eliminated. They distort investments and promote inefficiency and crony capitalism. What’s worse is that it puts the federal government in the game of picking economic winners and losers. And if debacles such as Solyndra have shown us anything, it’s that the bureaucrats in Washington don’t have the greatest track record on that front. As such, it’s best they stay on the sidelines.

It doesn’t escape notice that these same policy groups seem incapable — or unwilling — to gin up an equal amount of outrage over billions in actual subsidies that the renewable sector receives. Renewables are supposedly acceptable. Fossil fuels are not; hence their ire is solely aimed at the oil and gas industry as they propagate the false subsidies argument.

Fortunately, cooler heads appear to be prevailing in Washington as the head of the National Economic Council, Gary Cohn, said in a recent White House meeting that all “tax preferences” were on the table as part of tax reform. Keeping faith with that commitment will help make the tax code fairer and provide a level playing field, which is good news for Americans and the economy. At the end of the day, actual facts — not opinion disguised as fact — should rule the day.

William O'Keefe is the founder and president of Solutions Consulting. He formerly served as CEO of the George C. Marshall Institute, a nonprofit that conducted technical assessments of scientific issues with an impact on public policy.