Myth Busting: Democrats Want to End Subsidies for Fossil Fuels

The reality that Democrats refuse to acknowledge: the “renewable” and “green” energy industries get FAR more in subsidies from the government.

In their recently concluded national convention, the Democratic National Committee (DNC) nominated a presidential candidate and her running mate who hadn’t received a single vote in a primary election. Similarly, Kamala Harris and Tim Walz have spent weeks campaigning as the presumptive nominees while avoiding interviews or definitive policy stances. The Democrats hope the campaign against Donald Trump, “defending democracy,” and “joy and vibes” will shield their candidates from hard questions. Questions like, “What do you intend to do as president, Ms. Harris?”

Despite their efforts to hide their true intentions, Democrats published a document on policy statements. Readers can be forgiven for not realizing this, as the corporate media spent almost zero time covering the DNC’s official party platform. On page 16 of their party platform, Democrats trot out the old saw about ending “tens of billions of dollars in subsidies for oil and gas companies:”

Democrats oppose unfair loopholes and wasteful subsidies that benefit special interests at everyone else’s expense. We will fight to get rid of them. That starts by eliminating tens of billions of dollars in subsidies for oil and gas companies. It means ending special tax breaks for corporate jets, and boosting fuel taxes on corporate and private jet travel, saving taxpayers $4 billion over 10 years. And we’ll no longer permit companies to deduct the cost of paying executives more than $1 million a year. Corporations shouldn’t get a tax break for giving huge pay packages to CEOs.

(Read more: Harris-Walz Plan to Destroy Our Energy Production)

Democrats Can’t Explain the Failures of Green Energy

Ask any member of The Squad, or any other “progressive” officeholder, and they’ll likely tell you green energy has failed to succeed in the marketplace because of these subsidies. The game is rigged, they cry. If only they could strike a kill shot against Big Oil, we could achieve our green dreams and get rid of evil carbon dioxide once and for all.

In fact, the platform says just that, on Page 34:

Throughout, we’ll keep standing up to Big Oil, as our clean energy boom breaks the industry’s monopoly hold on energy markets. For the first time in 100 years, we’ve increased the royalties that oil and gas companies have to pay to drill or mine on public lands; and we’re charging at least 10 times more for the bonds that are required to hold companies accountable for cleaning up drilling sites or capping their abandoned wells, which have been left to spew methane. States and private landowners have for years charged more than the federal government does to lease their lands; it’s time the taxpayers got a similar return.

Going forward, we’ll also eliminate tens of billions of dollars in other unfair oil and gas subsidies. When windfall profiteering causes prices to spike at the pump, we’ll release our own supplies to keep costs down for American families. And, when we hear of potential collusion or price-gouging, we’ll hold oil and gas executives accountable.

In their minds, increasing red tape and creating skyrocketing costs for producers and consumers in the dirty energy industries will finally unshackle green energy.

Too Many Holes in Their Claims

There are so many holes in these tired old arguments, it’s hard to know where to start. Radical leftists have specialized for decades in “otherizing” people who engage in behaviors they don’t like. Nobody likes the rich guy, so it’s easy for them to demonize him. Tax breaks on corporate jets? Feed him to the sharks! Let’s tax that luxury jet fuel! CEO earns a lot of money for running a huge corporation? Burn the witch! Tax him, too!

Before we know it, they’ll want to control everybody’s behavior to create their green utopia.

The class warfare and demagoguery gets tiring after a while. But that’s their stock in trade, and the Democrats are masterful at deploying logical fallacies as weapons in that war. They specialize in relying on mixed terms that confuse voters while deliberately misrepresenting the scope of a particular problem. For instance, “saving taxpayers $4 billion over ten years” is a nonsense term that represents a drop in the ocean of the federal budget while mis-defining the term “savings.” They want to charge more in a specialized tax and call it savings.

What is a Subsidy?

The Left deliberately lumps everything they don’t like into the term “subsidy,” while simultaneously explaining away the incentives they want to give to “green” energy. For Big Oil, they don’t just mean direct payments, grants, government backed loans, or other forms of federal and state funding. When defining “government subsidies for Big Oil,” they include tax breaks, tax write-offs, and any other incentive—both at the federal and the state level—that allows a corporation to pay less in taxes than the big government spenders think they should pay.

For something called “subsidies,” they sure look a lot like penalties.

The Left fundamentally believes in picking winners and losers in the private sector. That’s why they believe so fervently in controlling who gets funding and tax breaks.

As the New York Times wrote in March 2024:

Oil executives reject the term “subsidy” to describe the tax policies. They argue that most industries enjoy tax deductions and oil companies write off just a sliver of what they pay in federal taxes.

They also point out that federal subsidies for wind, solar and other forms of clean energy are rapidly expanding. The Energy Information Administration found that about 46 percent of federal energy subsidies between 2016 and 2022 were associated with renewable energy.

Those evil oil executives have a point, though. The energy industry as a whole generates around $800 billion in annual economic activity, reinvesting over half a trillion into drilling, research, development, etc. How much do tax breaks amount to? Meanwhile, how much direct subsidizing does the industry receive in the form of funding and cash injections? We’ll examine that in the next section.

Of course, the New York Times environmental reporter above calls this a “semantic argument.”

How Much Does Big Oil Get?

According to the environmentalist page 350.org, founded by radical Bill McKibben, “fossil fuels” receive around $15 billion annually, as of 2020. They said this in response to a bill filed to “end fossil fuel subsidies:”

Today, Representative Ilhan Omar and Senator Bernie Sanders introduced a bill that would effectively end subsidies provided by the federal government to fossil fuel corporations. Currently, oil, coal, and gas companies receive up to $15 billion in taxpayer-funded federal subsidies annually. This bill would abolish loopholes in the tax code that benefit fossil fuel corporations and prevent them from taking advantage of COVID-19 relief funds, among other measures.

Did you notice that? They refer to tax “loopholes” as “funding pollution.” They then raise the specter of these corporations taking advantage of COVID-19 relief funds, like every other legal business was eligible to do during the pandemic.

The Huffington Post chastised pro-energy lawmakers in 2020 for writing a letter to President Trump, urging him to reduce royalty payments for fossil fuel extraction projects on public lands. HuffPo described these royalty payments, saying, “Drillers pay a percentage of the resource’s value, with the money going to fund schools, roads, conservation projects and more.” The article quoted an extremist environmental group that said Big Oil gets more than $20 billion in subsidies.

Apparently, paying less in fees also amounts to a subsidy.

Are Those Estimates Realistic?

Not really. Whether it’s $15 billion or $20 billion annually, those estimates appear to be grossly inflated. The Texas Public Policy Foundation (TPPF), employing several economists, released a detailed report showing the total amount at around $25 billion for the ten-year period 2010-19 for oil and gas, $13 billion for coal, and $15 billion for nuclear. For those scoring at home, that’s far less than even the low estimate by the radicals of $15 billion per year—more like $5.3 billion annually. Take out nuclear, and that amounts to around $4 billion for “fossil fuels.” Still a large number, but remember the industry produces over $800 billion annually in economic activity.

The TPPF “fossil fuel” subsidies calculations contrasted with MORE subsidies over the same period for renewables, which produced far less total electricity. In that ten-year period, TPPF calculated a total of $34 billion in subsidies for solar, and another $37 billion for wind. As the report notes:

It is important to look beyond the dollar values and consider the nature of different energy subsidies and their effects on markets. Wind and solar subsidies are primarily focused on the installation of generation assets using current technologies rather than on new technology development. Conversely, most energy subsidies for nuclear and fossil fuels are focused on research and specific aspects of exploration and development. The wind and solar industries depend on subsidies for a far greater portion of their revenue than other forms of energy production.

So there you have it. Renewables, which produce around 21 percent of the electricity in the U.S., receive over $7 billion annually in subsidies—a little less than double those enjoyed by “fossil fuels.”

All of this before we even scratch the surface of the Inflation Reduction Act (IRA), which Al Gore called the biggest green energy funding bill in human history. Some estimates put IRA funding of environmental projects and green energy into the trillions. That many extra zeros will dwarf the amount of all the current “subsidies” both for conventional energy and green energy. But who’s counting?

The Democrats Should Embrace Flatter Taxes for Everyone

Ok, everyone knows this is a pipe dream. Progressives rely on the progressive tax code to progressively penalize progressively more people and industries they don’t like. They really like using the levers of government to pick winners and losers, instead of butting out and letting the free market do what it does best.

But let’s think about this rationally.

Progressives say they loathe corporate welfare, but they also contradict themselves by justifying truly massive subsidies for green energy. They obfuscate the point by hiding behind shifting numbers, and say we must do all we can to invest in the green energy transition. They would prefer to spend untold trillions in taxpayer money on their radical priorities than on securing our borders, maintaining a deterrent military that strikes fear in our global adversaries, solving the mental health crisis in our city streets, fighting crime, maintaining individual liberty as enshrined in our Constitution, or any other priorities most Americans hold dear. And they’ll use the very corporate welfare they decry to do it.

All built on easily debunked myths, the myths they tell themselves to justify their insane priorities.

Learn more about the radical climate agenda: How the Left’s Global Warming Ideology Wrecked Science—And How to Stop It)