United States Subsidies

United States–$8.157 billion in 2015

The US Federal Government paid a total of USD 4.757 billion in 2015 subsidies to the fossil fuel industry, as well as USD 3.4 billion to the Low-Income Home Energy Assistance Program (LIHEAP) to subsidize fossil fuels in the residential sector. According to a G20 report in 2016, “Fossil-fuel subsidies are also often granted in order to avoid producers shutting down operating wells in response to sudden price drops.” However, the report continues, “Hedging producers against market-price volatility, however, reduces incentives to innovate and develop productivity-enhancing technologies.” Reliable, comparable statistics are not available for the amount paid in fossil fuel subsidies in 2010, but reports indicate a trend of decreasing subsidies over time as the US aims to meet the G20 goal of eliminating fossil fuel subsidies by 2025. Any change in subsidies to the industry will need to be passed by Congress, which currently leans toward supporting fossil fuels more than reducing subsidies to them. US energy-related carbon emissions have been falling gradually over time due to the expanded use of natural gas over oil and coal.

Under the current administration, and President Trump’s continued assertions that he will “bring back coal,” it is unlikely that fossil fuel subsidies will be reduced over the next three years. However, with decreasing costs of natural gas and increased technological capabilities to extract it, it is likely that fossil fuel-related emissions will continue to fall gradually due to the reduced emissions of natural gas relative to oil and coal.

Learn More

OECD (2016): “A report on the G20 peer review of inefficient fossil-fuel subsidies that encourage wasteful consumption in the United States”
https://www.oecd.org/site/tadffss/publication/United%20States%20Peer%20review_G20_FFS_Review_final_of_20160902.pdf
U.S. Energy Information Administration’s report on carbon emissions in 2016:
https://www.eia.gov/todayinenergy/detail.php?id=30712
White House “An America First Energy Plan”
https://www.whitehouse.gov/america-first-energy