U.S. Spends Ten Times More on Fossil Fuel Subsidies than Education


Image courtesy of Treehugger

According to a recent report released by the International Monetary Fund, the United States spends around $649 billion on subsidies to the fossil fuel industry. That is more than the entire defense budget ($617 billion), and more than 10 times the federal spending on education ($59 billion).

Fossil Fuels Are No Longer Cost Effective

In spite of the fact that the prices of fossil-fuel power generation have continued to rise, the United States still largely relies on natural gas and petroleum. In New Orleans, a highly controversial natural gas plant scheduled for construction in New Orleans East despite heavy local opposition.

At the same time, the price of renewable energy production has plummeted, making fossil fuel subsidies even less cost-effective. According to the International Renewable Energy Agency, the cost of solar power declined 26 percent in 2018, the cost of bioenergy 14 percent, solar photovoltaic (solar PV) and onshore wind 13 percent, hydropower 12 percent, and geothermal and offshore wind by 1 percent.

What’s more, their study found that over more than three-quarters of onshore wind and four-fifths of utility-scale solar PV capacity will provide lower cost electricity than the cheapest coal, oil, or natural gas options. Onshore wind and solar PV power are frequently less expensive than any fossil fuel option without subsidies. Finally, the study found that even new solar and wind installations are cheaper than the operating costs of currently existing coal-fired power plants.

As Simon Buckle, the head of climate change, biodiversity, and water division at the Organization for Economic Co-operation and Development told Forbes: “Subsidies tend to stay in the system and they can become very costly as the cost of new technologies falls. Cost reductions like this were not envisageable even 10 years ago. They have transformed the situation and many renewables are now cost competitive in different locations with coal.”

Much of the U.S. Could Rely On Renewable

According to another recent study, as much as 80 percent of the United States could be powered by renewable energy sources such as wind, water, geothermal, and solar power. Locally, New Orleans is an excellent candidate for transitioning to solar energy.

In spite of that, Louisiana still gets 60 percent of its electricity from natural gas. “Louisiana has for about a century made a decision that we are an ‘energy state,'” said Logan Atkinson Burke, the Executive Director of the Alliance for Affordable Energy, “and that is very narrowly defined.”

“Right now, we’re rich in natural gas,” says Dr. Anjali Sheffrin, a professor at Tulane who worked with electric utilities for 30 years before beginning her teaching career. “Look at how many liquified natural gas terminals are being built, and people expect that we may be awash in natural gas, but for how long? Two years? Five years?”

Money Better Spent

At a time when the U.S. is now ranked 27th in the world for education and healthcare, it’s safe to say that the $649 billion spent on corporate socialism subsidizing the fossil fuels (which rakes in over $257 million in profit each year, according to Bloomberg) is money better spent elsewhere.


Jenn Bentley is a freelance journalist and editor whose work has been featured in publications such as The High Tech Society, FansShare, Yahoo News, Examiner.com, and others. Follow her on Twitter: @JennBentley_

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2 thoughts on “U.S. Spends Ten Times More on Fossil Fuel Subsidies than Education

  1. Where does this number come from?

    Is there a budget item in the Congressional Budget to pay oil companies?

    1. The International Monetary Fund study that found the number is linked in the article.

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