A new Pew Charitable Trust analysis of U.S. government spending data found that the federal role in the energy sector is significant, although smaller in comparison to other sectors, such as transportation. Total federal spending in the energy sector on tax expenditures and grant programs likely to contain a subsidy was about $25 billion for the fiscal year 2009, which equates to $212 per household.
“The United States spends billions of dollars a year attempting to make energy more affordable, cleaner and to reduce our dependence on foreign sources of oil,” said Marcus Peacock, Pew project director. “As legislators in Washington consider decisions that will affect how our nation consumes and produces energy, this data provides a clearer view of how our government shapes energy policy through its use of subsidies.”
Highlights of the analysis include the following:
• In fiscal year 2009, $3.2 billion in federal tax expenditures supported fossil fuels while $1.5 billion went to assist renewable and alternative fuels. However, renewable-energy sources have been receiving an increasing share of tax subsidies, and according to Department of Treasury estimates, these subsidies will increase sharply above the level of fossil fuels over the next few years before trailing off.
• The American Recovery and Reinvestment Act had a significant effect on energy-sector programs. Federal grants to the energy sector quadrupled in fiscal year 2009 to more than $18 billion, due, in large part, to stimulus spending. Tax expenditures are also expected to increase from $6.3 billion in fiscal year 2009 to $21.2 billion in fiscal year 2012.
• Stimulus funds to the energy sector have also boosted energy conservation and efficiency programs. One such program, the Department of Energy’s Weatherization Assistance for Low-Income Persons program, received $5.6 billion in fiscal year 2009, more than a 20-fold increase from 2008.
Pew collected and aggregated data from USAspending.gov and other sources to populate two searchable databases of federal energy spending that enable users to query grant or contract information within the sector. The databases include information from the 2000–2009 fiscal years and contain some stimulus data. However, due to significant gaps in federal data, the size and scope of the total federal subsidy to the sector may be underestimated.