Subsidies: Propping Up Oil Profits & Polluting the Climate

Oil Change International & Sierra Club

January 2017



Almost half of all oil production expected to come online in the United States is only economic if the public props up private investments with taxpayer handouts.

The other half of oil production would happen even without subsidies. That means our government is handing out billions of dollars in subsidies that simply line oil company pockets.

This infographic compares the economic viability of oil production in discovered but undeveloped U.S. fields with and without subsidies. It shows that at current prices, almost half of all oil production is dependent on federal and state subsidies.

That equates to 19.6 billion barrels of artificially economic oil that, once burned, would emit 8.1 billion tonnes of CO2. That’s about 1% of the world’s remaining carbon budget, or equal to 100 coal-fired power plants operating for 23 years.

Click here to download the infographic.


  • The same old story… forget Democrat / Republican. What we have today is the corporatocracy vs the democracy. Which do you suppose will win all votes on oil subsdies? It ain’t us folks. The corporatocracy must be evicted from our government and the power returned to the people. Start with overturning Citizens United. End all government subsidies. Fire all congressmen who take money from corporations. Term limits. And on and on.

  • It is time to eliminate all oil and gas subsidies and provide and maintain subsidies for wind, solar, and other renewable energy sources.
    We should promote jobs and communities through the development of climate-friendly renewable transportation as well as developing energy efficient buildings.

  • Governments have lost track of the connection between subsidies, national debt, and the immediate (<20 yr timeframe) effects of emissions such as methane.

    The alternatives are lobbied out of funding. And the battery vs hydrogen rhetoric further clouds the argument; it is both – but what is most needed now is to decarbonise natural gas.

    The answer is power-to-gas and fuel cells. If the US government put a fraction of the $270 billion in loans awarded to the shale oil and gas industry (that will never be paid back) into fuel cell and P2G technology, we would already have domestic synthetic fuel production at a much lower cost than todays fossil fuel industry. Of course a lot more renewable energy is needed to provide power for electrolysers; but this is what is going to happen. If we consider the pitiful $3 million awarded to FuelCell Energy for commercialisation of its reversible fuel cell/electrolyser units, we can see why the technology is not generating the revenue of fossil energy technologies.

    The reality is that methane emissions from fracking will guarantee any profit made in the long-term is lost. $100 billion per year is already spent on outages per year due to climate-related damages to grid infrastructure alone in the US; this will only increase as America becomes more dependent on shale oil and gas. It is a particularly vicious circle; and the only way out is to diversify gas production with the virtually unlimited potential of biomethane (from wastewater, agriculture, municiple waste, food waste, forestry waste etc) and hydrogen from renewables. Fuel cell efficiencies further reduce required energy inputs.

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