The federal government is providing extensive support for fossil fuel production on public lands and waters offshore, through a combination of direct subsidies, enforcement loopholes, lax royalty collection, stagnant lease rates and other advantages to the industry, a report released Wednesday found.
The government is contributing at least $7 billion per year in subsidies to support fossil fuel production on federally held lands and offshore waters alone, and is holding some $35 billion in public liabilities for drilling in public waters of the Gulf of Mexico. These subsidies support increased fossil fuel production on U.S. lands and waters out of step with efforts to meet international climate objectives.
The report, released by Oil Change International in partnership with 350.org, WildEarth Guardians, Center for Biological Diversity, Clean Water Action, Food & Water Watch and Public Citizen, for the first time outlines in detail the subsidies and other public support being provided in the U.S. to the fossil fuel industry for its activities on public lands.
The report, Unequal Exchange: How Taxpayers Shoulder the Burden of Fossil Fuel Development on Federal Lands, presents an accounting of the minimum amounts of direct taxpayer dollars going to support fossil fuels on public lands, not including externalities such as climate and health impacts, which would bring the totals even higher. If those factors are taken into account, for example, mining coal in the Powder River Basin alone would have a net cost to the U.S. public of some $17.8 billion per year as of 2015.
"Rex Tillerson and other members of the Trump administration deny that these subsidies even exist just like they deny climate change. The reason is clear—in both cases, if you admit the truth, the only answer is a managed decline of the fossil fuel industry," said Stephen Kretzmann, executive director of Oil Change International.
"The first step towards that is to stop supporting the industry with our public dollars. These subsidies are a raw deal for American taxpayers, and a disaster for our climate."
Particularly notable is a finding that some royalty and lease rates for fossil fuel development on public lands have remained unchanged since the 1920s.
"As if simply allowing the toxic, climate-killing extraction of fossil fuels on our sensitive public lands isn't shameful enough, that the federal government actually subsidizes this foolish activity with taxpayer money is downright absurd," said Wenonah Hauter, executive director at Food & Water Watch.
"For the sake of climate stability, the transition to a clean energy future must begin immediately. An ideal place to kick-start the transition is with a ban on fossil fuel extraction on our precious public lands, and most certainly, a halt to the underhanded propping-up of this antiquated industry with our precious public dollars."
The report makes a number of key recommendations, starting with a basic determination that the fossil fuel leasing program on public lands should be phased out in line with climate science. Until that become reality, the report finds immediate action to reduce large, unfunded liabilities for U.S. taxpayer money associated with fossil fuel production on public lands should be reduced and royalty and lease rates should be increased to better reflect the full costs to the public of these activities.
"This report makes it clear as day that the Trump agenda is the fossil fuel billionaire agenda," said Jason Kowalski, policy director at 350.org.
"The industry finances corrupt politicians, who in turn help them keep fossil fuels economically viable at a time when the science suggests most oil, gas and coal needs to be kept in the ground. They set out to rig the system and they succeeded. History will judge them harshly."
"Now that we are spending more time at home, we are noticing the large number of delivery vans and lorries driving through cities," said Netherlands environment minister Stientje van Veldhoven, announcing plans to ban all but zero-emission deliveries in 14 cities.
"The agreements we are setting down will ensure that it will be a matter of course that within a few years, supermarket shelves will be stocked, waste will be collected, and packages will arrive on time, yet without any exhaust fumes and CO2 emissions," she added.
She expects 30 cities to announce zero emission urban logistics by this summer. City councils must give four years' notice before imposing bans as part of government plans for emission-free road traffic by 2050. The city bans aim to save 1 megaton of CO2 each year by 2030.
Help to Change
To encourage transport organizations to go carbon-free, the government is offering grants of more than US$5,900 to help businesses buy or lease electric vehicles. There will be additional measures to help small businesses make the change.
The Netherlands claims it is the first country in the world to give its cities the freedom to implement zero-emission zones. Amsterdam, Rotterdam and Utrecht already have "milieuzones" where some types of vehicles are banned.
Tilburg, one of the first wave of cities imposing the Dutch ban, will not allow fossil-fuelled vehicles on streets within its outer ring road and plans to roll out a network of city-wide electric vehicle charging stations before the ban comes into effect in 2025.
"Such initiatives are imperative to improve air quality. The transport of the future must be emission-free, sustainable, and clean," said Tilburg city alderman Oscar Dusschooten.
Europe Takes Action
Research by Renault shows that many other European cities are heading in the same direction as the Netherlands, starting with Low Emission Zones of which Germany's "Umweltzone" were pioneers. More than 100 communes in Italy have introduced "Zonas a traffico limitato."
Madrid's "zona de baja emisión" bans diesel vehicles built before 2006 and petrol vehicles from before 2000 from central areas of the city. Barcelona has similar restrictions and the law will require all towns of more than 50,000 inhabitants to follow suit.
Perhaps the most stringent restrictions apply in London's Ultra Low Emission Zone (ULEZ), which charges trucks and large vehicles up to US$137 a day to enter the central area if they do not comply with Euro 6 emissions standards. From October, the ULEZ is being expanded.
Cities are responsible for around 75% of CO2 emissions from global final energy use, according to the green thinktank REN21 - and much of these come from transport. Globally, transport accounts for 24% of world CO2 emissions.
The Rise of Online Shopping
Part of the reason for traffic in urban areas is the increase in delivery vehicles, as online shopping continues to grow. Retailer ecommerce sales are expected to pass $5billion in 2022, according to eMarketer.
The World Economic Forum's report The Future of the Last-Mile Ecosystem, published in January 2020, estimates that e-commerce will increase the number of delivery vehicles on the roads of the world's 100 largest cities by 36% by 2030.
If all those vehicles burn fossil fuels, the report says emissions will increase by 32%. But switching to all-electric delivery vehicles would cut emissions by 30% from current levels as well as reducing costs by 25%, the report says.
Other solutions explored in the report include introducing goods trams to handle deliveries alongside their passenger-carrying counterparts and increased use of parcel lockers to reduce the number of doorstep deliveries.
Reposted with permission from the World Economic Forum.