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Biggest Corporate Welfare Scam of All Time

April 11, 2024

Biggest Corporate Welfare Scam of All Time

President Joe Biden keeps lecturing corporate America to “pay your fair share” of taxes. It turns out he’s right that some companies really are getting away scot-free from paying taxes.

But it isn’t Big Tech companies in Silicon Valley or the Wall Street financial company “fat cats” or big banks or Walmart. They pay billions in taxes.

The culprits here are the very companies that President Biden is in bed with: green-energy firms.

It turns out that despite all of the promises over the past decade about how renewable energy is the future of power production in the United States, by far the biggest tax dodgers in the country are the wind and solar power industries. Over the past several decades, the green-energy lobby—what I call the climate-change-industrial complex—hasn’t been paying its fair share. That’s because the vast majority of these companies pay nearly zero income taxes.

But they wade in rivers of federal direct and indirect subsidies that keep these zombie companies alive. Over the past two decades, the renewable energy lobby has collected more than $250 billion in subsidies—payments that we’ve been assured over and over would be temporary. The argument for these grants, loans, tax abatements, and other sweetheart kisses is that these were “infant industries” in need of a Head Start program for CEOs. Except that these companies have never even reached puberty after all these years.

What’s worse is that President Biden keeps spoiling the children with lavish gifts for bad performance. A new report by tax expert Adam Michel at the Cato Institute finds that the green-energy subsidies—mostly created by Biden policies such as the so-called Inflation Reduction Act—will drain the Treasury of as much as $1.8 trillion over 10 years.”

…click on the above link to read the rest of the article…

Days of reckoning

February 8, 2022

Days of reckoning

Here’s something which will likely be universally unpopular:  The government shouldn’t do anything to subsidise energy prices.  I say this in the face of a £700 or so increase on annual bills announced today.  And this is just the beginning, because, as Nils Pratley at the Guardian points out, when the price cap is raised again in October, it will add a further £300 to bills – just in time for next winter.

To be clear, I am not arguing that millions of households should be left to choose between heat and food; I am merely pointing out that there are better and more effective ways of alleviating poverty than bailing out a private energy industry which is the victim of its own past follies.  Rather, I agree with Torsten Bell from the Resolution Foundation, who told this morning’s Today programme that the best way of addressing poverty is through increases in the benefits system.  Restoring and adding to the £20 a week cut from Universal Credit and the triple lock on pensions would be by far the most effective way of alleviating fuel poverty.

The energy side of the crisis, however, requires sweeping restructuring which goes well beyond anything the government or the opposition are currently prepared to countenance – not least because the economic models they operate on are so out of step with the real world that they fail even to understand the problem, still less offer a workable solution.

Why the energy cap failed

The state-imposed energy cap, which is the focus of establishment media attention today, was always the wrong solution to the wrong problem.  As I explained four and a half years ago:

…click on the above link to read the rest of the article…

On Fossil Fuel Subsidies, the Facts Matter

December 5, 2021

On Fossil Fuel Subsidies, the Facts Matter

The BC Green leader responds to the energy minister’s Tyee op-ed on provincial subsidies.

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LNG Canada’s marine terminal under construction. Photo via LNG Canada.

In his Tyee op-ed on Monday titled “Let’s Talk Fossil Fuel Subsidies in BC,” Bruce Ralston, the provincial minister for energy, mines and low-carbon innovation, tried to distract from his government’s continued support for fossil fuel extraction.

In particular, he raised an issue over the numbers in a report from Stand.earth, which he says lumped together the fossil fuel industry’s exemptions with exemptions that regular British Columbians get on hydroelectricity.

He then used this to create a straw man argument about the BC Greens, suggesting that because we cited the Stand.earth report, we therefore consider PST exemptions for residential users a fossil fuel subsidy. This is, to say the least, a stretch.

In the appendix attached to Ralston’s article, it is pointed out by Stand.earth that “Note: does not provide a delineation between different fuel sources.” And so yes, some portion of those figures included PST exemptions for residential users of hydro power, and some included PST exemptions for residential users of natural gas. Because the government does not provide disaggregated data that shows how much goes to each, neither Stand.earth nor the public knows what the exact breakdown is.

Should those figures have been lumped in with the hundreds of millions of dollars that the provincial government gives away each year in fossil fuel subsidies? No, the PST exemption British Columbians enjoy on their hydro bill is not a fossil fuel subsidy.

But this does not change the fact that the BC NDP government is subsidizing the fossil fuel industry and has increased them beyond what the BC Liberals gave…

…click on the above link to read the rest of the article…

BC Spends More Subsidizing Fossil Fuels Than on Fighting Climate Change: Report

June 25, 2021

BC Spends More Subsidizing Fossil Fuels Than on Fighting Climate Change: Report

Government says its upcoming royalty review will ensure ‘a fair return on our resources.’

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Environmental organization DogwoodBC put up a billboard at the Vancouver intersection of Main Street and 2nd Avenue to raise awareness about BC’s fossil fuel subsidies and the upcoming provincial review of its royalties. Photo by Michelle Gamage.

Over the past year, the BC NDP have given away $1.3 billion in fossil fuel subsidies, which is more than the $1.1 billion it pledged to fight climate change, according to a new analysis by Stand.earth.

The report looks at B.C.’s “runaway” fossil fuel subsidies, which have been on the rise since the new government took over in 2018.

The subsidies provided in 2020-21 ($1.3 billion) are more than double what they were the last year the BC Liberals were in power ($557 million), the report says. Stand.earth predicts subsidies will surpass $1.8 billion in the next three years, which would be triple what the Liberals spent in 2016–17.

B.C. is only outdone by Alberta when it comes to the “generosity” of subsidies given to the fossil fuel industry, the report says.

Some of these subsidies are leftover policies from the BC Liberals that have “exponentially grown” and others, like ones aimed at encouraging LNG Canada, are “conscious decisions” from the BC NDP government, according to Sven Biggs, Stand.earth Canadian oil and gas program director.

The Stand.earth report was calculated using the World Trade Organization’s definition of fossil fuel subsidies, which Biggs says includes “any kind of tax break, or direct incentive or direct subsidy to oil and gas producers that encourage fossil fuel growth.”

It found the largest source of rising subsidies is the Deep-Well Royalty Program, which the report calls a “loophole for fracking operators” that will cost taxpayers $421 million this year in lost royalty revenue.

…click on the above link to read the rest of the article…

BC’s Drilling and Fracking Credits a $1.2 Billion Subsidy in Recent Years, Researcher Finds

November 13, 2019

BC’s Drilling and Fracking Credits a $1.2 Billion Subsidy in Recent Years, Researcher Finds

Credits reduce future royalties that frackers owe the public for access to the resource.

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‘At almost every step of the way the government has refused to provide information on these subsidies,’ said Ben Parfitt, resource policy analyst with the BC office of the Canadian Centre for Policy Alternatives, of his investigation of the province’s deep well credit program.

“It’s been quite a battle to get to this stage,” said Ben Parfitt, a resource policy analyst with the B.C. office of the Canadian Centre for Policy Alternatives. “At almost every step of the way the government has refused to provide information on these subsidies.”

In a report released Nov. 13, Parfitt found that over the last two fiscal years the government has provided $1.2 billion in credits to companies drilling deep wells and fracking horizontal wells, a process that involves injecting liquids and chemicals under high pressure to break up rock and extract gas.

Companies including Petronas Energy Canada Ltd., Painted Pony Petroleum, Shell Canada Energy and Cutbank Dawson Gas Resources Ltd. have received hundreds of millions in credits that reduce the future royalty payments they owe to the provincial government for access to the publicly-owned resource.

“We’re out of pocket to the extent that if those credits did not exist, if the program did not exist, then the royalty revenues would be higher,” Parfitt said. Budget documents show that in total the government expects to collect about $250 million a year in natural gas royalties.The Tyee is supported by readers like you Join us and grow independent media in Canada

The deep well credit program dates back to 2003 when it was intended to help with the development of a type of drilling that has since become normal in the industry, Parfitt said.

 …click on the above link to read the rest of the article…

BC Government Frets Over Climate Change While Heavily Subsidizing Fracking Companies

August 13, 2019

BC Government Frets Over Climate Change While Heavily Subsidizing Fracking Companies

Worse, the giveaway probably isn’t needed, with the global industry desperate for new gas fields.

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Fracking does not need subsidies to be profitable. But we still hand ’em out. Photo via Shutterstock.

We’re in a climate crisis. So why did the B.C. government give oil and gas companies $663 million in subsidies last year so they would produce more fracked natural gas?

The NDP government hasn’t declared a climate emergency. But it commissioned a report that warns of more severe wildfire seasons, water shortages, heat waves, landslides and more.

Despite that, the government handed almost two-thirds of a billion dollars to fossil fuel companies — $130 per person in the province — so they’ll extract more methane, more quickly. (The numbers are all from the always-interesting Public Accounts released last month by the province’s auditor general.)

Which is perverse in a time when we’re warned of climate disaster.

British Columbians own the oil and gas under the ground. Companies pay royalties to the government for the right to extract and sell it

Since 2003, the B.C. government has been putting natural gas on sale. It has cut royalties to subsidize the industry’s road construction and reward any operators who drilled in the summer.

And most significantly, it started offering the gas at a deep discount for companies that drilled “deep wells.” The industry argument was that they were riskier and more expensive; the government had to sell the gas more cheaply to encourage companies to drill. It increased the discounts in 2009 and 2014, giving even bigger breaks to the fossil fuel companies. (Who were also big BC Liberal donors.)

The discounts — subsidies from taxpayers who have to pay more to make up for the lost revenue — have enriched fossil fuel companies for more than a decade.

 …click on the above link to read the rest of the article…

LNG Canada project called a ‘tax giveaway’ as B.C. approves massive subsidies

October 4, 2018

B.C. Premier John Horgan and Prime Minister Justin Trudeau

LNG Canada project called a ‘tax giveaway’ as B.C. approves massive subsidies

Fracked gas export project will be B.C.’s largest carbon polluter

There was a telling comment from Shell Global’s Maarten Wetselaar — representing five multinational investors in a $40 billion project to ship B.C. liquefied natural gas to Asia — amidst the hoopla that accompanied Tuesday’s LNG announcement.

“The governments of Canada and British Columbia have helped to ensure that the right fiscal framework is in place to make sure that the pie is divided in a just and fair way,” Wetselaar told a Vancouver news conference hosted by LNG Canada, which will oversee construction of a 670-kilometre pipeline carrying natural gas from northeastern B.C. to a processing plant in Kitimat, where it will be liquefied for transport in ocean tankers.

“And that fiscal framework leads to why we believe LNG Canada is in the right place.”

The “right” fiscal framework amounts to a bouquet of government subsidies for B.C.’s largest carbon polluter, including tax reprieves, tax exemptions and cheaper electricity rates for some of the largest and most profitable multinationals in the world — the LNG Canada quintet of Royal Dutch Shell, Mitsubishi Corp., Malaysian-owned Petronas, PetroChina Co. and Korean Gas Corp.

At a technical briefing for media, a B.C. senior government official pegged the province’s total financial incentives for the project at $5.35 billion.

The first of the incentives, a break on provincial sales tax during project construction, was approved Tuesday by the B.C. Cabinet.

…click on the above link to read the rest of the article…

We Subsidize the Wrong Kind of Agriculture

June 23, 2018

We Subsidize the Wrong Kind of Agriculture

Summer: the season of barbecues, baseball games, and backyard fun. It’s also the time of year when the American farming industry comes into full swing producing the crops we hold near and dear.

The pastoral ideal of golden fields of corn and wheat is what comes to mind for most people, and they’d be on the right track. Corn, soybeans, and wheat are the three biggest crops grown in this country, and — along with cows, pigs, and chicken — make up the bulk of our farming output.

There’s a reason for this: The federal government heavily subsidizes those products. In fact, the bulk of U.S. farming subsidies go to only 4 percent of farms — overwhelmingly large and corporate operations — that grow these few crops.

For the most part, that corn, soy, and wheat doesn’t even go to feed our populace. More of it goes into the production of ethanol — which is also heavily subsidized — and into the mouths of those cows, pigs, and chickens stuffed into feedlots. Those grains purchased by the feedlots are also federally subsidized, allowing producers to buy grains at below market prices.

When we do eat these foods, they’re sold back to us in unhealthy forms, pumped full of high fructose corn syrup and growth hormones. Large corporate farms and feedlots also poison waterways, drain aquifers, and pollute the air.

Meanwhile, small farmers continue to go broke, thanks to the low cost of foods subsidized by the government for corporate buyers. Even the few companies that provide seeds and equipment for farmers receive their own tax breaks from state governments, while farmers are stuck with the bill of goods sold to them from companies like John Deere and Monsanto.

Does this help feed America? Not really: We still buy most of our foodfrom far-flung places. So why is our government subsidizing this production model?

…click on the above link to read the rest of the article…

The Real Cost of Offshore Wind

September 26, 2017

The Real Cost of Offshore Wind

A couple of weeks ago (I think September 11) I was watching BBC news mid morning, following the Hurricane Irma story and I happened to catch an editorial on the recent CfD auction where the lowest bids for offshore wind came in at £57.50 / MWh, well below the bids in the first round where £120 per MWh were the norm. The young female presenter interviewed the CEO of Renewables UK and a number of untrue statements were made. I put this down to ignorance on the part of the BBC and duplicity on the part of Emma Pinchbeck from Renewable UK. Every time I see a report like this I want to send a complaint to the BBC – but I just don’t have the time. And there are encouraging signs that the BBC are trying to get their act together. In the Web version of the story they do interview EDF and get the opinion from the nuclear side of the tracks.

[Inset image is one of the sub-stations on the Beauly-Denny power line. Politicians tend to look at projects like this and see jobs and prosperity. The alternative view that tends to be overlooked are additional capital and maintenace costs that have to be added to electricity bills.]

Let me begin with some of the errors made in the BBC news piece which I am recounting from memory.

Government Subsidy

Contracts for difference (CfD) were referred to as a government subsidy paid for by the tax payer which they are not (this mistake is repeated in the web version of the report). They are instead a price guarantee to the generating company legislated for by the government and paid for by the BILL PAYER. If the prevailing price for wholesale electricity is £45 / MWh the bill payer still has to pay £57.50. The “subsidy” element is the £12.50 additional payment.

…click on the above link to read the rest of the article…

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