World oil subsidies hit $312 billion

Oil Subsidies Reached $312 Billion in 2009, IEA
By Renewable Fuels Association

Toronto – – The International Energy Agency World Energy Outlook today revealed that global fossil-fuel subsidies amounted to US $312 billion in 2009. The US $312 billion included subsidies to fossil fuels used in final consumption and to fossil fuel inputs to power generation but, did not include direct producer subsidies which topped US $100 billion last year according to the Global Renewable Fuels Alliance.

According to the IEA these consumption subsidies were down from US $558 billion in 2008 largely because oil prices declined in 2009. Conversely, these oil subsidies are set to climb in 2010 with increasing oil prices.

“As we strive to develop alternatives to oil we must recognize that we are not competing on a level playing field,” said Bliss Baker, spokesperson for the Global Renewable Fuels Alliance. “Massive multi-billion dollar oil subsides are a serious obstacle to the development of cleaner greener alternatives. Oil has a huge competitive advantage financed by global taxpayers,” added Mr. Baker

Next week the G20 will meet in Korea and the issue of oil subsidies is on the agenda following a commitment made at the G20 meeting in Pittsburg in September 2009.

“Despite the IEA’s optimism that there is momentum for reducing subsidies, not one country has eliminated an oil subsidy program since signing on to the pledge in 2009,“ said Mr. Baker

In addition to the consumption subsidies, several countries continue to provide domestic producer subsidies to oil companies at alarming rates. According to a November 2010 study done by Earth Track, many countries continue to provide direct producer subsidies to oil companies including;

• Canada provides over US $2 billion per year to oil companies
• U.S. producer subsidies reached US $52 billion in 2009
• European Union provided US $8 billion in subsidies to oil companies in 2009

“It is time for the G20 to show leadership and reverse this practice of never ending subsidies to big oil. It is time to move beyond oil to a world with sustainable alternatives to crude oil such as biofuels and other renewable forms of energy,” concluded Mr. Baker.

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