The Dernogalizer

September 19, 2009

US Tax Breaks Subsidize Foreign Oil Production

Filed under: Energy/Climate — Matt Dernoga @ 1:52 am
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The Environmental Law Institute has kindly issued a report all the US energy subsidies from 2002-2008, and compared those for fossil fuels to those for renewable energy.  The tax breaks we give for foreign oil production is the biggest standout.

U.S. Tax Breaks Subsidize Foreign Oil Production

(Washington, DC) — The largest U.S subsidies to fossil fuels are attributed to tax breaks that aid foreign oil production, according to research to be released on Friday by the Environmental Law Institute in partnership with the Woodrow Wilson International Center for Scholars. The study, which reviewed fossil fuel and energy subsidies for Fiscal Years 2002-2008, reveals that the lion’s share of energy subsidies supported energy sources that emit high levels of greenhouse gases.

The research demonstrates that the federal government provided substantially larger subsidies to fossil fuels than to renewables. Fossil fuels benefited from approximately $72 billion over the seven-year period, while subsidies for renewable fuels totaled only $29 billion. More than half the subsidies for renewables—$16.8 billion—are attributable to corn-based ethanol, the climate effects of which are hotly disputed. Of the fossil fuel subsidies, $70.2 billion went to traditional sources—such as coal and oil—and $2.3 billion went to carbon capture and storage, which is designed to reduce greenhouse gas emissions from coal-fired power plants. Thus, energy subsidies highly favored energy sources that emit high levels of greenhouse gases over sources that would decrease our climate footprint.

The U.S. energy market is shaped by a number of national and state policies that encourage the use of traditional energy sources. These policies range from royalty relief to the provision of tax incentives, direct payments, and other forms of support to the non-renewable energy industry. “The combination of subsidies—or ‘perverse incentives’— to develop fossil fuel energy sources, and a lack of sufficient incentives to develop renewable energy and promote energy efficiency, distorts energy policy in ways that have helped cause, and continue to exacerbate, our climate change problem,” notes ELI Senior Attorney John Pendergrass. “With climate change and energy legislation pending on Capitol Hill, our research suggests that more attention needs to be given to the existing perverse incentives for ‘dirty’ fuels in the U.S. Tax Code.”

The subsidies examined fall roughly into two categories: (1) foregone revenues (changes to the tax code to reduce the tax liabilities of particular entities), mostly in the form of tax breaks, and including reported lost government take from offshore leasing of oil and gas fields; and (2) direct spending, in the form of expenditures on research and development and other programs. Subsidies attributed to the Foreign Tax Credit totaled $15.3 billion, with those for the next-largest fossil fuel subsidy, the Credit for Production of Nonconventional Fuels, totaling $14.1 billion. The Foreign Tax Credit applies to the overseas production of oil through an obscure provision of the U.S. Tax Code, which allows energy companies to claim a tax credit for payments that would normally receive less-beneficial treatment under the tax code.

ELI researchers applied the conventional definitions of fossil fuels and renewable energy. Fossil fuels include petroleum and its byproducts, natural gas, and coal products, while renewable fuels include wind, solar, biofuels and biomass, hydropower, and geothermal energy production. A graphic chart (soon to be released) that will be released on Friday presents general conclusions about the overall subsidies for fossil fuels versus renewables other than corn-derived ethanol. Nuclear energy, which also falls outside the operating definition of fossil and renewable fuels, was not included.

The Environmental Law Institute® is an independent, non-profit research and educational organization based in Washington, DC. The Institute serves the environmental profession in business, government, the private bar, public interest organizations, academia, and the press. For further information from the Environmental Law Institute, please contact Brett Kitchen at 202-939-3833 or

April 30, 2009

100 days

Filed under: Energy/Climate,National Politics — Matt Dernoga @ 11:51 am
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I thought it would be a good idea to give my brief impression of President Obama’s first 100 days in office in respect to energy and environmental issues, and what still needs work.

I actually think the best part of Obams’s first 100 says has been the staff he has selected to deal with these issues. Carol Browner is special advisor on climate and energy, and she was the former head of Clinton’s environmental protection agency, and is known as a very tough regulator. I actually heard from Lisa Jackson, the head of the EPA at Powershift and she was very impressive in insisting the EPA return back to considering science in it’s methods for protection. I’ve also thought and still maintain that Nobel Prize Winner and Energy Secretary Steven Chu is Obama’s finest appointment. I’ve heard very smart and intelligent rhetoric coming out of Chu so far, and I have high confidence he will run the Department of Energy very successfully. On the great jobs front Labor Secretary Hilda Solis has voiced a strong commitment to green jobs, and recently green jobs adviser Van Jones, a terrific and vocal leader in the environmental and African American community. I think we will see very good things from this green team during this term.

The next positive development I would point to is the green part of the economic stimulus. This stimulus had 62.2 billion dollars in specific spending on green initiatives, and there was an additional 20 billion in green tax initiatives. This will lead to notable improvements in renewable energy, energy efficiency, improved energy transmission, the smart grid, low income housing retrofits, green jobs training, and rail transit. On top of all this, 15 billion is going to be committed to these initiatives in the upcoming budget.

One other tentatively positive development has been the EPA officially declaring carbon dioxide pollution a major health hazard. Other noteworthy trends in the right direction were calling on the EPA to revisit requests by 13 states to regulate their car emissions, directing the EPA to raise fuel economy standards, cutting off funding nuclear waste disposal for Yucca Mountain, announcing plans to finally regulate coal ash, and create a Clean Energy Service Corps as an expansion of the current Americorp Program.

There have been some letdowns, and some things I want to see more of. For one, while the EPA is moving to regulate coal ash, there has not been a move to stop permits for the destructive mountaintop removal, too much talk of clean coal technology, Secretary of the Interior Ken Salazar is talking too positively of offshore drilling, and last I have not seen Obama push the climate bill through Congress as hard as he should to this point. I wrote about this recently, and I think he needs to be more aggressive.

All in all though, the last 100 days have been a LOT better than the last 8 years for green issues. I’m optimistic we’re moving in the right direction, I just think we need to move faster.

December 11, 2008

Obama Picks Energy+Environmental Posts

Filed under: Energy/Climate,National Politics — Matt Dernoga @ 2:44 am
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So Obama has selected people for the top positions dealing with energy+environment. All that’s left is Interior Dept. You can find the link about who Obama has selected here, but I wanted to specifically shine a light upon the new energy secretary Dr. Steve Chu. Not only is this guy a Nobel Prize winner for work in Physics, but he’s been working on the frontlines of research into new technological breakthroughs when it comes to energy. This is in my opinion Obama’s finest pick. Here is a video of Chu, which gives a very good idea of how much you should be looking forward to this administration when it comes to renewable energy and fighting climate change.

December 8, 2008

I Just Got Served—> Kool-aid

My most recent comment about me getting served made me think I was finally getting that long-overdue restraining order, or lemonade…but instead it was a joyful response to one of my columns. Here’s the link to it, and my response to the dude.

column that doesn’t like me

my response is below

Hey Stephen, I just read your response to my column, I just wanted to give you my input here

#1. I actually did use sources, in fact the fact check people at the Diamondback are very rigorous about preventing the columnists from using poor facts and unfounded information, they actually have in the past e-mailed and/or called me to double check what I put, and the sources I cite.

#2. The sources and facts that you use are straight from the PR website of the company building the lines. They're just there to feed you flowers and sunshine.

#3. As I stated in my column, I'm not necessarily opposed to power lines feeding Maryland power, my oppostion is importing coal electricity. I think it's disingenuous for our Governor to talk big about cutting emissions and "going green" and then do that. If we're going to import coal power, then we should be more forthright about the direction we're taking the state. You and I probably have a disagreement about coal power that we can't resolve, but I am not opposed to powerlines importing renewable energy.

#4. There isn't time to add any additional energy sources by the time we're expected to face rolling blackouts, the only way is to employ conservation measures. Unfortunately I only have a limited word count in my column, but I did want to point out that the Calvert Cliffs Nuclear Plant is expected to be done by 2015, so quick deployment of energy efficiency in the short term until that plant comes online in my opinion makes it unnecessary to import coal power. We may have a disagreement over that, but it's certainly not because I'm twisting facts in the wind.

#5. As far as my claim about people being brushed to the side. The reason I ended up having my attention drawn to this issue was because people who lived in West Virginia were e-mailing me and telling me that the public forums you cited were a joke to make it look like they were receptive to public opinion. I actually double checked it as best I could by finding numerous other complaints online from people in WV who had found the way by which they were being ignored troubling. In fact, after I wrote the column last week, I had numerous people from WV e-mail me and tell me I was spot on about this.

#6. You should learn to be more respectful when you respond to something someone else wrote. Don't get me wrong, I'm not bothered by it, when you're as loud and annoying as myself,I put myself out there for that stuff. Still, you should be able to disagree with me without insulting me in the opening paragraph.

Good luck with finals and the rest of the semester, and to countering my columns in the future.


December 7, 2008

Economic Stimulus into Green Tech.

Filed under: Uncategorized — Matt Dernoga @ 3:08 am
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There was a good article in the NY Times a few days ago about how the economic stimulus package Obama is considering will largely be tied to investment in green technologies. Sounds good to me.

December 2, 2008

Column on PATH

Filed under: Dernoga,Energy/Climate,MD Politics — Matt Dernoga @ 12:36 pm
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So my column is out today. It’s about a project called PATH, where coal power is going to be imported into our state through environmentally destructive powerlines. Enjoy!

November 25, 2008

John Dingell Ousted!

Filed under: Energy/Climate,National Politics — Matt Dernoga @ 2:19 am
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I’m a couple days behind the news on this one, but it’s certainly worth mentioning. Here’s an interesting article in case you want more background

For anyone who doesn’t know, Democrat John Dingell of Michigan has been one of the most powerful members of Congress, and held his seat for well over half a century. He used to be the chair of the Energy and Commerce Committee. Dingell is one of the main reasons why environmental and climate legislation has been so difficult to pass in the House. He “protected” the auto industries fro decades from improved CAFE standards, and emissions standards. Ironically enough, he’s probably one of the main reasons why the auto industry has been driven into the ground. Dingell’s chairmanship was challenged by Henry Waxman of California, a Congressman who has been much more proactive on energy and environmental legislation. Just having Democrats in control of Congress isn’t enough. We need to have the right Democrats in charge of the right committees. I’m looking forward to seeing how things change in 2009 with Henry Waxman as the new chair of the Energy and Commerce Committee.

It’s about time John Dingell got what he deserved.

November 1, 2008

Vote for Andrew Rice

I wanted to take a moment to write a post to encourage all those who live in Oklahoma to vote for Andrew Rice as your US Senator. This is a race I have been monitoring quite intently. Andrew Rice is a terrific person, he graduated with a religious studies degree, and a masters in theologic studies. In the 1990’s, he traveled to Asia to do missionary work. Over there, he worked on constructing schools, as an AIDS hospice, and substance abuse treatment homes.

However, his brother was killed in the 9/11 attacks, and this was a game-changer for him. He decided to focus on public service to try to better his country. Andrew has been a State Senator since 2006, and has already amassed a fantastic resume, particularly in expanding health insurance for children, pushing to pass a tremendous bill called stephanie’s law, and he has a solid environmental record of pushing for energy conservation, efficiency, and cleaner burning fuels into vehicles.

I’ve paid a lot of attention to the rhetoric coming from Andrew Rice, because he is running in one of the most conservative states in the country. I wanted to see how his positions when it came to energy/environmental issues would change as the days wore on. To my pleasant surprise, he hasn’t backed down a bit. Andrew constantly talks about how climate change is a real serious, urgent problem that we must confront. He refers to the future of his children as a reason he’s running for office- so that he can work to ensure they don’t have live with the effects. He gets it when it comes to green jobs and clean energy. He understands that investing in clean alternatives isn’t only good for the economy, but creates an economic boom with millions of new good paying green jobs. The kinds of jobs that are going to put America’s economy back into contention with the rest of the world. Andrew Rice also recognizes the severe limitations that come with offshore drilling and how little it can address our energy crisis.

This is not to say Andrew and I agree on everything. Coming from a conservative states, he has staked out some moderate to right-leaning positions which you can read about on his website. Additionally, even when it comes to energy he is a strong proponent of natural gas. While I recognize natural gas is cleaner than coal and oil, to me it’s still a dirty fuel, and economically is not our best option. But I can live with that disagreement.

What makes this race even more important is the opponent Rice is facing. James Inhofe, the man who is infamously known for saying on television “global warming is the greatest hoax perpetrated on the American people” back in 2003. Up until 2006 when the Democrats took over the Senate, Inhofe towered over the Senate’s Environment Committee, doing everything in his power to block any kind of legislation that would serve positively towards the environment, moving away from dirty fuels, or fight climate change. He has a 0% score from the League of Conservation Voters.

If you would like to read an interview with Andrew Rice conducted earlier in the year, go here

I am a realist, Rice is trying to defeat what has been considered a seemingly invincible opponent. The closest poll I’ve seen from this race is Inhofe leading Rice by 9% points. But there was ever a year for it to happen, this is it. Republicans are extremely unpopular, Inhofe has pretty much been lock step with Bush, and people are hungry for a change. There’s also the Obama Factor, as I call it, where it’s likely there will be a massive surge in youth and African American turnout all around the country which will affect races all down the ticket.

Regardless of the outcome, I sense Rice will be a star in American politics in the years to come. But if you live in Oklahoma, vote him into the Senate.

By the way, I just tracked down Inhofe’s contributions from Big Oil and Big Coal over the years. Sicccck

Senator James Inhofe (R-OK)

Accepted $607,406 from the oil and gas industry since 2000. $300,548 of those dollars were from industry PACS. Supported the industry in 100% of selected votes.

Senator James Inhofe (R-OK)

Accepted $321,000 from the coal industry since 2000. $253,750 of those dollars were from industry PACS.

October 21, 2008

Nuclear Power

So I broke down the free market economics of nuclear power today. You can read my column at the link, or what I pasted below.

For as long as I can remember, allegedly rational people have been pushing for the most overhyped energy source there is – nuclear power. Just look at Maryland – we’re on the verge of adding a third reactor to our Calvert Cliffs Plant as a way to address our rising energy demand. Nationally, Sen. John McCain (R-Ariz.) is on his way to glowing green, as a major part of his energy plan consists of building 45 new nuclear reactors by the year 2030. Where do I begin?

Nuclear power plants take a long time to build. Take the Calvert Cliffs reactor, for instance. Under the best-case scenario, it will be up and running by 2015. Consider that against the fact that Maryland may be experiencing rolling blackouts in 2011. Maybe we should build a time machine while we’re at it?

Imagine trying to build 45 of these by 2030. Assuming we started in 2010, that would be an average of two-and-a-half nuclear reactors every single year. It’d be like trying to write a term paper the night before it’s due and starting at midnight. You’d need very fast fingers, a lot of coffee, divine intervention and … can somebody get me that time machine?

Nuclear plants need to be located near a water source for cooling, and there simply aren’t enough locations in the U.S. that are safe from natural disasters or drought. A few of our reactors are in danger of being shut down because of the water shortages we’ve been facing in the Southeast due to drought.

This ties into another critical problem with nuclear power, which is that the cost of building and operating a nuclear power plant actually increases as you build more plants. You’ve got limited space to put them, and with fewer choices, the bidding for remaining spaces goes up. Cost also rises because the increased demand for uranium, used as nuclear fuel, causes its price to go up. These rising costs would be passed directly on to the consumer’s energy bill, just as we’ve seen happen with coal and natural gas.

It’s a sharp contrast with alternative sources such as solar panels and wind turbines, which get cheaper as you buy more. This is a key reason why in 2007 renewables got $71 billion of private investment, while nuclear got none. Subsidies for nuclear power are now approaching and, in some cases even exceeding, its costs. Guess who pays for those subsidies? The taxpayer; I’m surprised to hear McCain pushing an agenda that requires so much government support.

How much of an impact would 45 new nuclear reactors have? They would supply 1.2 percent of our energy needs in 2030. Oh, and the Calvert Cliffs reactor we’re building is projected to cost between $7.2 and $9.6 billion. Assuming the low end of these projections, the 45 reactors we’re building to meet 1.2 percent of our energy needs will carry construction costs of $270 billion, most of which is going to come from government subsidies.

I always hear politicians talk about supporting an “all of the above” energy policy. Why? That means you’re for all of our good ideas, and all of our bad ideas. How about the smart, cost-effective energy policy with the right priorities? Nuclear should be at the bottom of the list, not the top. McCain’s silver bullet is a blank.

Matt Dernoga is a junior government and politics major. He can be reached at

October 19, 2008

Powervote Efforts

I just wanted to give an update on some of the activities going on in Maryland with Powervote. For those who don’t know about Powervote, it’s a nationwide campaign being headed up by the Energy Action Coalition. The goal is to get as many youth around the country as possible to sign a pledge to vote for politicians in this election that champion clean energy policies as a solution to our environmental, economic, and national security challenges. Hundreds of schools across the country are participating.

But beyond just getting pledges, we’re holding rallies to make a statement and attract media, holding educational events about issues, and having lobby meetings with our national leaders. Importantly, after the election we’ll have a large base to use to hold people who are elected accountable and make sure they push clean energy and climate change solutions hard.

If you want to read more about Powervote, check out the website Here. I also wrote a column not long ago promoting it Here. The University of Maryland group I’m part of Clean Energy for UMD also got The Diamondback to mention us in a column of their paper Here.

So the pictures I’m including below are from a rally we had on our University Mall promoting Powervote where we constructed wind turbines out of wood and put them in the grass. They actually worked like the should when the wind blew. The 2nd picture was taken after a meeting some of us had with Senator Ben Cardin’s staff where we talked about our Powervote campaign, and discussed Cardin’s positions on the issues we care about(I’m the one with the suit..)

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