Sacrificing the Future to Subsidize Fossil Fuels

2013 map courtesy of the Ocean Conservancy website

According to lead researcher Steven Murawski, a professor at the University of South Florida’s College of Marine Science in Tampa, the oil found in the bodies of sickened fish from the Gulf Coast region match the 2010 Deepwater Horizon spill. Murawski and his team of Florida scientist studied the oil’s chemical composition in order to debunk the argument that fish abnormalities were to blame and not oil in coastal runoff and oil from naturally occurring seeps in the Gulf could be to blame,  reports Rueters’ Barbara Liston. In her article, BP Oil Spill Caused Sickness In Fish, Researchers Find, she reports that the findings by the researchers argues that the fish in the study had to have been exposed recently enough in order to identify the chemical signature of the oil in their bodies. However, BP, whose rig caused the spill rejects the findings stating in a email response that it is “not possible to accurately identify the source of oil based on chemical traces found in fish livers or tissue.” In addition, Liston reports that in a statement from BP: “vertebrates such as fish very quickly metabolize and eliminate oil compounds. Once metabolized, the sources of those compounds are no longer discernible after a period of a few days.” The research team included scientists from USF, the Florida Institute of Oceanography and the Florida Fish and Wildlife Research Institute. The work was published in the current edition of the online journal of Transactions of the American Fisheries Society.

Thousands of claims for damages against BP continue to be process since the April 2010 explosion of the oil and gas producer’s Gulf rig which killed 11 oil workers and spilled millions of barrels of oil into the Gulf of Mexico for 87 days. In the winter of 2010-2011, fisherman in the area where the blow out well was located have noticed a spike in abnormal looking fish, many with unusual skin lesions. Murawski said his team compared the chemical signatures of oil found in fish livers and flesh to the signatures of the Deepwater well and other oil sources. As Liston reports, Murawski explained, “The closest match was directly to Deepwater Horizon and had a very poor match to these other sources. So what we’ve done is eliminated some of these other potential sources.” In addition, his team also ruled out pathogens and other oceanographic conditions. By 2012, the frequency of fish lesions declined 53 percent.

Even with BP’s blatant disregard for the environment and the years of fall out to come from such an egregious crime, the federal government still spends billions of dollars to subsidize the fossil fuel industry. U.S. today reported back in 2010 after the BP spill that the number of spills from offshore oil rigs and pipelines in the U.S. had quadrupled in the last 10 years and could of served as a warning for the massive leak that occurred in the Gulf of Mexico, according to government data and safety experts. The spills and amount of oil leaked grew worse when production increased, reports USA Today, even after oil companies claimed it was never safer to drill. In Alan Levin’s USA Today article, Oil spills escalated in this decade, the average annual spill increased by more than 17 from 2000 to 2009 and from 2005 to 2009 spilled averaged 22 a year. The company with the most spills from 2000 to 2009 was BP who leased the well that blew out in April 2010, according to data. In addition, the oil giant and its affiliated companies reported 23 spills of 50 barrels or more not including the April 2010 event. Oil firm Shell was next with 21, according to MMS spill reports. Over the past five years, the Obama administration has called for cutting fossil fuels subsidies in the form of tax breaks and other incentives, however, the federal governments has increased the amount of money forfeited through subsidies over that period of time with $18.5 billion last year, according to the environmental group Oil Change International. According to Kate Sheppard, Federal Government Still Spending Billions To Subsidize Fossil Fuels, the total is up from $12.7 billion in 2009 as oil and gas production has increased in the United States. Next year, domestic production will reach the highest since 1972 partly due to the Obama administration’s “all of the above” energy strategy which includes increasing oil and gas production. The Oil Change report includes a variety of subsidies in its accounting i.e. tax breaks, incentives for production on federal lands like royalty fees and tax deductions for clean up costs like the BP Deepwater oil spill. In addition, when states subsidies for oil, gas and coal production are included, the total climbs to $21.6 billion for 2013. In September 2009, Obama and other G20 leaders pledged to phase out fossil fuel subsidies to curb global warming with Obama calling for elimination of subsidies in 2012 and 2013 with the administration’s 2015 budget proposal again calling for major cuts to fossil fuel subsidies. However, Congress has yet to cut these subsidies. The report argues that as long as these incentives stay in place, the federal government is “essentially rewarding companies for accelerating climate change.” Steve Kretzmann, executive director of Oil Change International, explains: “We’re spending more taxpayer dollars every year to fund fossil fuels that we can’t afford to burn, according to climate science. Subsidizing fossil fuels at this point is climate denial.”

While science on a global scale has examined the environmental cost of the global fossil fuel habit, the economic costs have yet to be fully realized. According to the article, Fossil Fuel Subsidies Cost ~$2 Trillion Annually, According To IMF on CleanTechnica’s website published May 1,2014, the IPCC recently reported that CO2 emissions from fossil fuel combustion and industrial processes contributes around 78 percent of the total increase in greenhouse gas emissions between 1970 and 2010. The combined value of global fossil fuel subsidies are difficult to calculate with recent estimates ranging from $500 billion to $1.9 trillion a year. However, according to the International Monetary Fund, factoring in implicit subsidies from the failure to charge for pollution, climate change and other externalities, the post tax cost is closer to $2 trillion equivalent to 2.9 percent of the global GDP or 8.5 percent of government revenues. In addition, the IMF believes simply removing fossil fuel subsidies could decrease fossil fuel emissions by 13 percent. Experts say by reducing or eliminating subsidies to fossil fuel and properly pricing energy to account for environmental impacts, governments can effectively foster a low carbon transition as global subsidies to renewable energy were $88 billion in 2011. According to the article: “UNEP (United Nations Environment Programme) argues that subsidies to fossil fuel producers often support inefficient state-owned energy companies and stifle incentives for greater efficiencies and innovation, while subsidies to consumers often encourage excessive consumption, which has knock-on effects for pollution, human health and greenhouse gas emissions.” UN Under Secretary General and UNEP Executive Director, Achim Steiner, had this to add: “Fiscal policies are of particular importance in a green economy transition. Confronted by a fiscally constrained world, government reforms might appear to be a daunting challenge. However, it is important to note that fossil fuel subsidies cost countries precious funds. For example, they divert government resources from pro-poor spending in Africa, where governments spend an estimated 3 per cent of GDP – equivalent to their total health care allocation – on fossil fuel subsidies.” UNEP has undertaken green economy fiscal policies studies in various developing countries including Ghana, Namibia, the Philippines and Turkey and have shown that reforming energy subsidies and prices is possible. In addition, the UNEP believes,”Tax incentives could make investments in clean technologies more attractive, while government funds could reduce the risk profile of capital intensive new technologies.” In Australia, the Clean Energy Finance Corporation has financed $2.5 billion in renewable projects since starting in July 2013, but has not dissuaded the current Abbott government from trying to dismantle it.

According to Tom Revell’s article, a new study published in the journal Climate Change Economics, researchers from the International Institute for Applied Systems Analysis tried to put a price tag on efforts to limit the global temperature rise to 2 degrees Celsius. David McCollum, the study’s lead author, states, “Many countries say that they’re on board with the a target of 2C global mean temperature stabilization by 2100; some have even made commitments to reduce their greenhouse gas emissions. But until now, it hasn’t been very clear how to get to that point, at least from an investment point of view. It’s high time we think about how much capital is needed for new power plants, biofuel refineries, efficient vehicles, and other technologies – and where those dollars need to flow – so that we get the emissions reductions we want.” Revell’s article, Much-needed $800bn renewable energy investment can come from fossil fuel subsidies, sums up the study by saying that the hundred of billions of dollars needs to invest in renewable energy and prevent the worst effects of climate change could come from the enormous amount of subsidies given to fossil fuels, approximately $800 billion annually between now and 2050 on top of the $400 billion raised by existing policies increasing existing investments from $200-300 billion annually. According to the International Energy Agency, in 2012 direct fossil fuels subsidies totaled $544 billion which researchers point out could be shifted into supporting renewables and meet the investment gap. The study does not account for potential saving gained by switching from fossil fuels to cleaner energy. The study does warn that the transition needs to happen soon as energy infrastructures have  a lifespan of 30 to 60 years. In April, the Intergovernmental Panel on Climate Change warned that investments in fossil fuels like oil and coal need to drop by $30 billion a year and renewable energy’s share of global production must increase from 17% in 2010 to 50% in 2050. Without aggressive action, scientist estimate global temperatures will rise by 3.7 to 4.8 degree Celsius by 2100 with devastating consequences around the world, Revell reports.