For Immediate Release
Contact: Jared Stonesifer, 412-443-4466
Buried Out of Sight: PennFuture Releases New Report that Shines Light on Massive Fossil Fuel Subsidies Doled out in Pennsylvania
Harrisburg, Pa. (Feb. 22, 2021) – If our elected officials had a chance to inject billions of dollars back into Pennsylvania’s annual state budget, why wouldn’t they act immediately?
The answer is simple: because they continue to coddle the fossil fuel industry with massive subsidies that incentivize dirty energy and extraction at a time when we need exactly the opposite.
To that end, a recent months-long analysis from PennFuture shows just how much support the industry receives in Pennsylvania: $3.8 billion in fossil fuel subsidies for Fiscal Year 2019, or about $296 per Pennsylvania resident. This represents a 14 percent increase from previous analyses conducted by PennFuture in 2015, which means our fossil fuel subsidy problem in Pennsylvania is getting worse, not better.
This new report, titled “Buried Out of Sight: Uncovering Pennsylvania’s Hidden Fossil Fuel Subsidies,” is intended to shine a light on the preferential treatment received by the fossil fuel industry in Pennsylvania, while offering solutions to chart a better future.
The consequences of these subsidies are too large to be ignored. Despite a scientific consensus regarding the climate crisis, Pennsylvania remains as one of the largest fossil fuel states in the nation and our elected officials have refused to move away from supporting the industry at every turn.
“It is our responsibility to act on climate and to provide a stable world for future generations,” said PennFuture President and CEO Jacquelyn Bonomo. “We need to move away from fossil fuels and that means ending the massive subsidies that prop up these industries that foul our air and water, and damage our climate on a daily basis. This report offers alternatives that level the playing field between dirty energy and other deserving sectors, and we offer solutions that could restore $2 billion to state and local budgets while also preparing Pennsylvania for the inevitable shift to a clean energy economy. Now is the time for state policymakers to act.”
PennFuture was able to identify over 50 ways that our state and local governments subsidize fossil fuels. Of the $3.8 billion total, the shale gas industry captured 52.1 percent, or $2.0 billion.
Pennsylvania’s unconventional gas industry also caused at least $11.1 billion in external damages in FY 2019, including water well contamination, negative health impacts like asthma and cancers, and damages to public infrastructure. These damages cost an average of $867 per resident, yet the per resident value belies the inequitable distribution of impacts, with residents living closest to shale gas development paying the highest price of all. As research has shown over and over, heavily impacted residents are more likely to be black, brown, or poor.
“Fossil fuel subsidies distort Pennsylvania’s economy in favor of an industry which degrades the environment, threatens public health, and destabilizes the climate, all while robbing our state and local governments of resources to pursue core functions including, ironically, the regulation of fossil fuel companies,” said PennFuture Policy Analyst Emily Persico, the co-author of the 80-page report. “The federal government is now stepping in to address these historic wrongs on the national level, and Pennsylvania legislators must do the same.”
Sean O’Leary, a senior researcher at the Ohio River Valley Institute and an external reviewer of the report, agreed with that sentiment and said the general public needs to know how much it's paying to subsidize dirty industry and energy.
"Markets aren’t perfect. Industries that extract and use fossil fuels impose major health and environmental costs for which the rest of us pay,” O’Leary said. “The problem is only compounded by fossil fuel subsidies. Studies like these that uncover misdirected and counterproductive incentives are critical to identifying and righting these harmful policies."
For Doug Koplow, the founder of an organization called Earth Track that monitors subsidies for dirty energy, the enormity of these fossil fuel subsidies creates an uneven playing field that disadvantages renewable and clean sources of energy.
"While most discussion of subsidies to fossil fuels has focused on the federal level, PennFuture has continued to call attention to the significant harm that state-level support to the industry does to Pennsylvania’s finances and environmental quality,” said Koplow, who also served as an external reviewer of the report. “Its third detailed look at state subsidies to oil, gas, and coal since 2011 again demonstrates that eliminating existing tax breaks to fossil fuel production and consumption would bring in billions of dollars of additional revenue to the Commonwealth while also creating a level playing field on which renewable energy could better compete."
Finally, external reviewer Will Delavan, who is also an associate professor of economics at Lebanon Valley College, said PennFuture’s report “provides a detailed description of corporate welfare at its worst.”
“Before I read this report, I had no idea how much and in how many ways the fossil fuel industry bilks taxpayers, and I imagine citizens don’t either,” he said. “The massive subsidies and tax breaks result in higher prices for consumers and ultimately higher taxes, resulting in less public spending on things we truly care about like schools, public health and defense. For an industry that likes to think of itself as competitive and the product of free markets, it is ironic that it survives and prospers because of a reliance on taxpayer dollars that could be used for things we care about. There is little reason in a competitive market that any subsidies be given to this industry.”
PennFuture’s report doesn’t just shine a light on the depths Pennsylvania goes to subsidize dirty energy, it also offers solutions to move our Commonwealth in a different direction. Specifically, we recommend our elected officials:
To read our report, please click here.