Tax breaks for Big Oil aren’t nearly as big a giveaway as tax breaks for renewable sources of energy like solar, wind, and ethanol, according to a new report by the Congressional Budget Office (Federal Financial Support for the Development and Production of Fuels and Energy Technologies, March 2012). Last week, President Obama called on Congress to end $4 billion worth of tax breaks for oil companies, saying: “These are the same companies making record profits – tens of billions of dollars a year. I don’t think oil companies need more corporate welfare.”
The CBO finds, however, that tax breaks for renewables cost more. In the chart below, the cost of tax breaks for fossil fuels are shown in light blue and those for renewables in dark blue.
“Provisions aimed at energy efficiency and renewable energy accounted for 78 percent of the budgetary cost of federal energy-related tax preferences in 2011,” reports CBO. Renewables provide only 8 percent of the country’s energy needs, according to the Energy Information Administration.