Published on November 11th, 2014 | by Joshua S Hill13
G20 Supporting Fossil Fuels To The Tune Of $88 Billion
November 11th, 2014 by Joshua S Hill
Governments of the G20 organisation are contributing approximately $88 billion towards the exploration of fossil fuels each year, despite the numerous cases against such a move, and despite numerous pledges to eliminate fossil fuel subsidies. This, according to a new report conducted by the Overseas Development Institute and Oil Change International.
The report is the first to contain a detailed analysis of fossil fuel exploration subsidies by all of the G20 nations, and comes to one unmistakable conclusion: with the rising costs necessary to acquire hard-to-reach reserves in tandem with falling coal and oil prices, government subsidies are “propping up fuel exploration which would otherwise be deemed uneconomic.”
“Despite the widespread perception that renewables are costly, our research reveals that finding new fossil fuel reserves is costing nearly $88 billion in exploration subsidies across the G20,” said Shelagh Whitley, of the Overseas Development Institute (ODI). “Scrapping these subsidies would begin to create a level playing field between renewables and fossil fuel energy.”
“Five years ago, G20 governments pledged to both phase out fossil fuel subsidies and take action to limit climate change,” added Oil Change International’s Director Stephen Kretzmann. “Immediately ending exploration subsidies is the clearest next step on both fronts.”
Hit the jump to take a look at the key findings from the report, as well as what the research has to say about Australia, the United Kingdom, and the United States.
Two key findings stand out from the report:
- The top 20 private oil and gas companies, globally, invested just $37 billion in exploration in 2013 – less than half of that being ploughed in annually by G20 governments – suggesting their exploration activities are highly dependent on public finance.
- Russia provides $2.4 billion in national subsidies for fossil fuel exploration annually, including on the Prirazlomnoe site in the Arctic, which has ‘dubious commercial viability’.
The authors of the report also mapped out where G20 governments are funding fossil fuel exploration overseas. Several key examples include:
- Russia is subsidising exploration in countries including Brazil, China, United Kingdom, Indonesia and Venezuela.
- China is subsidising exploration in countries including Australia, Brazil, Canada, Mexico, Russia and the US
- Brazil is subsidising exploration in Angola, Benin, Columbia, Gabon, Namibia, Nigeria, Peru, Portugal, Tanzania, US, Uruguay.
Of unending surprise to all of you who regularly follow my work on CleanTechnica, Australia is one of the countries worth highlighting from the report.
The number of subsidies that the Australian government is currently providing for the sole purpose of fossil fuel exploration beings to boggle the mind. The total annual national figure paid in subsidies amounts to $2.9 and $3.5 billion, not to mention those that are simply not addressed by the report.
This, despite the fact that Australia is one of the top polluters on the planet, and one of the worst in terms of political willingness to minimise said-pollution.
For the full report on Australia, click here (PDF).
The United Kingdom
Second on our list of countries is the United Kingdom, which is propping up its national fossil fuel exploration industry to the tune of $1.2 billion each year.
That figure includes generous tax breaks for North Sea exploration, worth $838 million to Total (HQ France), $407 million to Statoil (Norway), $229 million to Centrica (UK) and $72 million to Chevron (US) between 2009 and 2014.
The UK is also spending $663 million each year financing overseas exploration in Siberia, Brazil, India, Indonesia, Nigeria, Guinea, and Ghana.
As the authors of the report note, “the UK stands out as a major industrialised economy that, despite the G20 pledge, has expanded the scope of its national subsidies for oil and gas exploration dramatically, in particular for shale gas and offshore resources.”
For the full report on the United Kingdom, click here (PDF).
The United States
Last, but most definitely not least, is the grand old United States of America, which provided a whopping $5.1 in national subsidies for fossil fuel exploration in 2013, a figure almost double the 2009 level.
The US is currently spending $1.4 billion each year funding fossil fuel exploration in Colombia, Mexico, Nigeria, and everyone’s favourite, Russia.
For the full report on the United States, click here (PDF).
All in All …
When you consider that $88 billion annually is almost double what the International Energy Agency estimates as necessary to provide electricity and heat for all by 2030, the sheer scale of government subsidies directed towards the fossil fuel industry begins to become apparent. Unsurprisingly, the International Energy Agency therefore suggests that phasing out exploration subsidies should be a priority for G20 governments as they strive to meet their existing commitments.
But with G20 heads of state meeting in Brisbane this week, the home of one of the most prominent anti-environmental nations in the world, one wonders just what is going to be on the agenda. In all likelihood, this report — or anything like it — will be kept far, far away.