Fossil Fuels Grip on the Modern World: False Subsidies?

Politicians tell us that we are dependent on oil because there is alternative.  Oil is what makes the world go round.  If that is the case why does the industry receive so much in subsidies?

“If you put together tax breaks, feed-in tariffs and other forms of government support, the renewable energy industry received between $43 and $46 billion last year, according to Bloomberg. If you add up similar support for oil and gas projects, the total comes to $577 billion.”

Make Wealth History goes on to refer to a study from Princeton that shows that military spending and protection of oil interests may push this figure up to $7.3 trillion dollars.

Image Courtesy of Make Wealth History

Although renewables receive only a slither of the total energy subsidies given out; they are starting to make headway in some countries in transforming the energy mix. 10 years after feed-in-tariffs were introduced in Germany the country is sitting pretty on 500,000 green jobs and 16.1% green electricity (German Agency for Renewable Energy, 2009).  In Portugal it is even more dramatic, as cited by the New York Times:

Nearly 45 percent of the electricity in Portugal’s grid will come from renewable sources this year [2010], up from 17 percent just five years ago.

So why do we continue to poor money into a dieing, poisonous, and murderous industry that in theory should be able to stand on its own feet due to our sheer dependence?  Could it be that this dependence is manufactured?

The World Wars forced countries to look inwards to fuel the fight against outside evils (that almost sounded as if it came from a terrorism speech by George W. Bush).  Fossil Fuel subsidies began in the early 1900s and were designed to encourage local production. The power oil got from beating fascism in the 40s and  then creating massive wealth in the 50s and 60s meant that oil dependence was institutionalised.  It also became tied with capitalism and the fight against communism.  This makes it of course harder for environmentalism.  Environmentalism is seen as a communist plan because it suggests that we need to change the structure that beat the communists.

Image Courtesy of

So why do we need the subsidies?

Without fuel subsidies the argument states that growth will slacken as the price of oil rises and we will become even more dependent on outside forces.  That is the argument anyway!

Our democracies weakness is that the stockholding rich are the same people that walk the corridors of power.  The lobbyists know how to speak to stockholders and people reliant on growth for re-election.  “How could we possibly cut back on fuel subsidies?!  The economy will come crashing down around us and your stocks will also be worthless.”  Oil is instutuionalised but its evils are externalised.

Renewable energy, when supported by governments and the massive subsidies that they have at their disposal, can dramatically change the way we create our energy.  Portugal shows how renewable energy growth can be explosive when the government fully supports the industry.  We just need to remove the oilmen from the corridors of power (and science) so that public opinion and the politicians that are supposed to look out for our interests start doing that again.  The years of mindless growth cannot carry and the power that oil has over us needs to be handed over to the renewable energy sector.

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4 Responses to “Fossil Fuels Grip on the Modern World: False Subsidies?”

  1. [...] have written about many of the schemes that “those eco hippies” are trying to bring in from scrapping fuel subsidies to introducing personal carbon allowances. Such schemes are meant to save us from ourselves, but [...]

  2. [...] driving innovation forward at impressive rate. Other industries notably nuclear and oil have seen massive subsidies for decades with little improvements in either their cost or energy [...]

    • Roderick S. Beck says:

      Nuclear power has not received massive subsidies in the US. In fact, it is under 2 billion USD per year. Mostly on the research and development side. In fact, solar power and ethanol are two biggest recipients of Federal dollars.

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