Fossil fuel subsidies shield us from the real price at the pump
2020 was a banner year for fossil fuel subsidies worldwide propping up the world’s oil companies with $5.9T in subsidies according to the International Monetary Fund. Conservative estimates put US subsidies to oil companies at around $20.5B annually.
Subsidies make fossil fuels cheaper for the consumer making it a tough sell to go green
Energy subsidies keep customers’ prices below actual market levels while rewarding oil companies with above-market prices so they remain profitable. Subsidies also offset the costs of continued oil exploration and help shield the oil companies from the costs incurred by pollution and global warming.
Fossil-fuel subsidies are one of the biggest financial barriers hampering the world’s shift to renewable energy sources. Each year, governments around the world pour around half a trillion dollars into artificially lowering the price of fossil fuels — more than triple what renewables receive — nature.
There are many articles written about what we as individuals can do to help in the fight against climate change, however, most Americans are not willing to make any sacrifices that hit them in the wallet — higher gas prices or higher home energy costs. But there will be costs involved as we move away from energy sources with a high Energy Return of Investment (EROI) like oil to renewable sources with much lower EROI. The higher the EROI the more bang for the buck.
Keeping fossil fuel energy prices artificially low makes them more attractive to consumers. Cost-conscious consumers are more likely to conserve and cut back on energy use when energy costs are expensive. We are recently experiencing a surge in natural gas prices so much that winter energy bills are coming in at three times normal…
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