Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2013

Full report

Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2013

Release date: March 12, 2015
Revised: March 23, 2015 (revision)

Executive Summary

This report responds to a September 2014 request to the U.S. Energy Information Administration (EIA) from U.S. Representative Fred Upton, Chairman of the House Committee on Energy and Commerce, and U.S. Representative Ed Whitfield, Chairman of its Subcommittee on Energy and Power, for an update reflecting Fiscal Year (FY) 2013 data of two earlier EIA reports on direct federal financial interventions and subsidies in energy markets covering FY 2007 and FY 2010.
As in the prior EIA reports on this subject, the scope of the present report is limited to direct federal financial interventions and subsidies that are provided by the federal government, provide a financial benefit with an identifiable federal budget impact, and are specifically targeted at energy markets. As requested, the report focuses on subsidies to electricity production and also includes subsidies to federal electric utilities in the form of financial support.
Given its scope, the report does not encompass all subsidies beneficial to energy sector activities (see text entitled “Not All Subsidies Impacting the Energy Sector Are Included in this Report”), which should be kept in mind when comparing this report to other studies that may use narrower or more expansive inclusion criteria. Consistent with EIA's role and mission, this study focuses on developing data rather than drawing conclusions or discussing policy issues related to subsidies, and in that regard differs from some other reports that address energy subsidies (see text entitled "A Wide Variety of Definitions, Methods and Estimates Occur in Other Energy Subsidy Studies").

Subsidy categories

Energy subsidies and interventions discussed in this report are divided into five separate program categories:
Direct expenditures to producers or consumers. These are federal programs that provide direct cash outlays which provide a financial benefit to producers or consumers of energy.¹
Tax expenditures. These are largely provisions found in the Internal Revenue Code (IRC, or Tax Code)—Title 26 of the United States Code—that reduce the tax liability of firms or individuals who take specified actions that affect energy production, distribution, transmission, consumption, or conservation.
Research and development. The federal government has an extensive program of funding energy research and development (R&D) activities aimed at a variety of goals, such as increasing U.S. energy supplies or improving the efficiency of various energy consumption, production, transformation, and end-use technologies. R&D programs generally do not directly affect current energy consumption, production, and prices, but if successful, they could affect future consumption, production, and prices.


http://www.eia.gov/analysis/requests/subsidy/