The report shows that the oil industry has benefited from $335 billion in combined incentives, with natural gas receiving $100 billion.
The MISI study also shows that, contrary to some claims, federal energy incentives have not gone to nuclear energy technologies at the expense of renewable energy sources, such as wind and solar. Of the total incentives provided since 1950, nuclear energy has received nine percent ($65 billion), while renewable energy has received six percent ($45 billion). Coal and hydroelectric energy sources, meanwhile, have received 13 percent($94 billion) and 11 percent ($80 billion) of the total respectively.
The report identifies six categories of incentives: tax policy, regulation, research and development funding, market activity, government services and disbursements.
"Tax policy has been, by far, the most widely used form of incentive mechanism, accounting for $325 billion (45 percent) of all federal expenditures since 1950," the report states. "The oil and gas industries, for example, receive percentage depletion and intangible drilling provisions as an incentive for exploration and development. Federal tax credits and deductions have also been utilized to encourage the use of renewable energy."
Federally funded regulation and R&D funding, at about 20 percent each, are the second- and third-largest incentives.
Each energy type benefits from a mix of federal incentives. Federal tax concessions for oil and gas are the largest of all incentives, amounting to about 80 percent of all tax-related allowances for energy. Regulation of prices on oil from stripper wells or new wells comprises the second largest amount of incentives aimed at a particular energy type.
The federal government's primary incentive to nuclear energy has been in the form of R&D programs. Of the incentives benefiting nuclear energy, 85 percent ($67 billion) has come in the form of R&D funding. Total incentives for nuclear energy are $2 billion less than that because the industry pays more than it receives in disbursements as the result of contributions industry has made to the federal Nuclear Waste Fund. According to MISI's analysis, expenditures on nuclear waste disbursements were approximately $14 billion less than receipts to the Nuclear Waste Fund.
Only eight percent ($5.3 billion) of the nuclear energy R&D funding has been for the light water reactor technology used in the 104 reactors that supply nearly 20 percent of U.S. electricity.
Renewable R&D Funding Outpaces Nuclear Energy Since 1994
Since 1988, federal spending on nuclear energy R&D has been less than spending on coal research and, since 1994, has been less than spending on renewable energy research. Coal produces about half of U.S. electricity, and wind and solar together less than 2 percent.
Research and development expenditures for nuclear, coal and renewables expanded greatly after 1975, but this increase was especially marked for coal and renewables. Between 1976 and 2006, the federal government spent more than five times as much on coal R&D ($26.1 billion) as it had in the previous quarter century, and more than 10 times as much on wind and solar R&D ($17.3 billion.)
"The common perception that federal energy incentives have favored nuclear energy at the expense of renewable energy such as wind and solar is not supported by the findings of this study," said Roger Bezdek, president at MISI.
