Oil & Gas Subsidies Artificially Lower Fossil Energy Prices and Hurt Renewable Energy Competitiveness

American taxpayer funding of oil and gas exploration keeps the price of fossil energy artificially low, a study conducted by Wood Mackenzie for the American Petroleum Institute shows.

According to an article in the Oil & Gas Journal, the study found that eliminating tax deductions for intangible drilling costs and for US oil and gas production expenses would "shift the average break-even points for US oil and gas development from $47/bbl and $5.40/Mcf, respectively, to $52/bbl and $6/Mcf."

In other words, by subsidizing the oil and gas industry, American taxpayers are picking up a portion of the real cost of those fossil energy sources. In turn, that discourages conservation and makes it harder for renewable energy sources to compete on price.

It's important to note that this still doesn't get us anywhere near the real price of fossil energy. To do that, you'd still have to look at the tax breaks that subsidize foreign oil production, the hundreds of billions spent around the world subsidizing fossil energy and the trillions the U.S. spends on the Ministry of Oil Defense.

If we want renewable energies to compete without government support, shouldn't we ask fossil energies to do the same?