The Institute for Energy Research is a not-for-profit organization that conducts intensive research and analysis on the functions, operations, and government regulation of global energy markets.

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June 7, 2013

New Transparency Tool Exposes Waste, Promotes Smart Policy Decisions

June 7, 2013
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WASHINGTON D.C. – The Institute for Energy Research officially launches today a new online transparency tool – www.energysubsidies.org – designed to give policymakers, government officials, researchers, journalists, and the general public greater access to data about taxpayer-funded energy subsidies, including federal loan guarantees, grants, and various tax credits. For more than a year, IER analysts have worked closely with transparency and data technology experts to build a comprehensive database with the power to provide user-friendly, searchable, sortable and easy-to-find information about energy spending across all federal agencies, an increasingly complicated task due to duplication, opaque reporting, and inadequate data standards that keep taxpayers in the dark about how government uses their money.

“Taxpayers have a right to know how government is spending their money, and the ongoing debate over federal energy subsidies – whether the federal government should provide financial support to renewables, coal, oil, natural gas, or nuclear power – must be based on objective facts regarding current levels of government support,” IER President Thomas Pyle explained.

“Widespread misperceptions as to the nature and extent of government subsidies can lead to erroneous policy decisions. In recent years, the wind, solar and biofuels industries have been feeding generously at the federal trough, to the extent that green energy spending is 7 times greater under the current administration than the previous one. More and more, layers of duplicative programs provide opportunities for waste, fraud, and abuse. Today, we are left with a mishmash of subsidies, mandates, and set-asides for pet energy technologies that are more expensive and unreliable than the energy sources they are supposed to replace. The new IER database will be an important tool for Americans to decide what role the U.S. government should play in the energy sector.”

The IER database covers fiscal years 2009 to 2012, a period that has seen record growth in the size and scope of federal spending on energy subsidies, particularly for renewables that are favored by the current administration. In addition to the database, the new tool provides an interactive energy page that allows users to compare the value of various subsidies with the energy output of sources like coal, oil, natural gas, nuclear, and renewables.

IER also released a video to promote the database, entitled “Will You Pay For Justin Bieber’s Sports Car,” demonstrating how taxpayer money is being used by Washington to fund luxury items, boutique fuels, and underperforming energy ventures that rely on federal funds to exist.

Methodology

For the purposes of the database, IER defined federal energy subsidies as disbursements by the federal government in the form of grants, loans, loan guarantees, or direct reduction in tax liabilities that have an identifiable federal budget impact and are specifically targeted at energy production. The categories and definitions employed by IER are consistent with those used by other public and private databases. By utilizing existing government reports, many of which are difficult to find and integrate, IER has been able to create a single database without duplicative information that promotes a greater degree of transparency and user friendliness.
Four broad categories of activities that were not included in the database are: regulatory subsidies, tariffs/excise taxes, contracts for goods/services above fair market value, and certain indemnification laws/risks transfers. IER adhered strictly to the federal government’s published data, but cannot guarantee the underlying accuracy of the federal government’s data, which is often criticized by transparency watchdogs for incompleteness, inconsistency, and untimeliness.

For more about IER’s methodology, click here.

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