Fair and Equal Energy, GOP Proposes Ending All Tax Breaks

Senator Mike Lee (R-UT) recently proposed new legislation that would end all $16 billion dollars in subsidies on energy, restoring a free market energy sector.

Ordinarily, when legislation such as this is mentioned it is directed at the renewable sector only, allowing oil companies to retain the billions they receive. However, this bill will end all oil and gas subsidies as well, allowing competition to return to the sector. Now the government will be unable to pick winners and losers in the market.

60 years of energy

Source: “60 Years Of Energy Incentives,” Management Information Services for the Nuclear Energy Institute

Credit: Alyson Hurt/NPR

Since 1950, the U.S. government has provided and astonishing $837 billion for energy development, over half of that being oil and natural gas. However, his bill also reduces taxes for these companies which could prove balanced out in the long run.

This is not the first time something like this has been tried. In 2012, Congressman Mike Pompeo of Kansas attempted the same plan and ultimately was referred to the House Subcommittee on Energy and Power. Senator Mike Lee has quite a few more tricks up his sleeve as he currently has 34 sponsors on the bill. He does have opposition however in that many senate democrats and republicans want to extend biofuel subsidies for at least one more year. In order to have a truly effective bill, all government assistance has to be cut.

While renewables were once viewed as the future of U.S. energy, the recent oil and gas boom has taken over the economy. In 5 years alone, oil production on state and private lands has soared an astonishing 61 percent, and natural gas production has risen 33 percent.

Comments (5)

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  1. Energy Curmudgeon says:

    Now if only the political energy experts, oops that is actually an oxymoron, would realize that providing subsidies to build expensive non firm energy production makes no sense to power inefficient systems, we might get someone.
    Jimmy Carter organized the Department of Energy to move the US off its dependence on foreign oil.
    16,000 employees later and $Billions wasted here we are moving back to our dependence on oil and natural gas.
    With that being said, give this direction we should be able to save tax payers money and reduce government by dismantling the DOE.
    PS Try really reducing wasteful energy use then building generation as a plan, it’s a novel idea.

    • David says:

      Energy Curmudgeon,

      What direction do you believe our government should be taking on energy in the coming years?


  2. Lloyd says:

    I do not think we ever really moved away from any dependency on oil and gas. Yes, I agree, if that was the original purpose of the DOE, then it has failed.

  3. Energy Curmudgeon says:

    Hi David,
    Being a fan of reducing waste because it is wasteful, I believe we place our emphasis on reducing wasteful energy use first, and then look to providing cost effective environmentally responsible generation.
    I’ll try not to ramble but to approach this topic I could write for days, but here goes some basics.
    Strategic Energy Integrated Plan including but not limited to:
    • Energy efficiency first, it makes no sense to build generation to serve inefficient equipment, processes or systems.
    • Demand reduction and peak load management, this has been effective in resolving capacity constraints.
    • Distributed generation where costs defray the expense of transmission or distribution replacement or upgrades. This is one that needs special attention due to the complexity of costs vs. returns.
    Where do we waste energy? Commercial and Residential energy account for 40% of all energy consumed in the US.
    Commercial Office buildings account for 25% of the energy used in the US.
    Heating and cooling at the same time is often done primarily to resolve tenant complaints. It is much easier to kick in the chiller when heating rather than investigate the source and troubleshoot from the source.
    Server rooms are another area that contributes to waste. Many times they are located after the building is constructed and rather than installing isolated cooling to keep the room at proper operating temperature for servers, the entire building is cooled. There are viable solutions for Server rooms, hot and cold aisles if new construction, ductless heat pumps if after the fact cooling is needed.
    I could go on about Commercial office buildings including design, but this would not provide space and time for Generation.
    Nuclear has had a bad rap since 3 mile Island and Chernobyl. The Russian facility should never have been built due to its poor design, and 3 mile Island was fall out from political press, no pun intended!
    Now of course we have the Japan Tsunami to contend with, again another plant in a high risk area that arguably should not have been located in that area.
    Nuclear should be considered in our resource mix as it provides firm power that renewables such as wind, and solar cannot. The difference between higher costs for renewables and the fact the generation is non-firm, meaning not available 24X7X365 as thermal generation is given little consideration when discussing the mix of reducing energy use and providing generation.
    I am all about renewable energy, but the firm non-firm consideration must move to the forefront.
    Hydro, what a political nightmare we have made regarding Hydro-Generation. IN the PNW we enjoy abundant, clean hydro generation, but because Politicians consider externalities over common sense, it is not considered renewable except for certain circumstances. This is a separate topic that I could ramble on for hours about having done battle with Fish and Wildlife for years, but until we settle that complex issue we are overlooking one of our greatest clean assets and form of Power generation.
    Lastly, we need to get the Politicians out of the energy business. They are all about sound bites and what sounds and looks good to further there politician career. This is not and never has been in the interest of the consumer. The DOE lost its direction many years ago and has been an expensive tax payer burden for the past 20 years which is why I say re-focus or dismantle. This too is another topic for paragraphs at a later date.
    This is just the tip of my iceberg, I will comment more on future articles and be more specific now that after 36 years in the energy biz, I am retired, and it’s the bomb!

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