Pa taxpayers subsidize King Coal, pull subsidies from new technologies

Posted by By at 30 December, at 12 : 44 PM Print

A report published this month says fossil fuels receive subsidies of about $2.9 billion a year from Pennsylvania taxpayers. It also says most of the assistance has been in exemptions, such as removing sales and use taxes from gasoline to make the fuel seem less expensive.

The result is state coffers take a hit while motor fuel producers maintain their profits. And hospital costs escalate, powered upward in part by kids and elderly with breathing problems – even those who don’t smoke tobacco.

Actually, the only reason tobacco use is noticeable is relatively few of us inhale cigarette smoke – way fewer than spend large portions of their days inhaling secondhand effluent from the clutter of rush hour people haulers, bumper to bumper, 5-10 mph, into and out of our nation’s large towns and cities.

But we have been trained to notice cigarette smoke. My mother, when I was more than a half-century younger than I am, regularly characterized cigarette use as “a dirty habit.” I wonder how many of us even notice the tiny signs on gasoline pumps saying that continued breathing of the fumes has been found to cause cancer.

Anyway, what is a body to do? Most everywhere we go needs a car to get there, whether the destination is work, grocery shopping or an evening out for dinner and a show.

Some examples of the fossil fuel subsidies include Coal purchase and use taxes, $119.5 million; Residential exemptions for electricity, fuel oil and natural gas, $435.4 million; and gasoline and motor fuels exemptions, $1.146 billion (with a b).

And those numbers (a more complete list is available at do not include federal subsidies which have the effect of reducing taxable income the companies are required to report to Pennsylvania.

So we save a little money at the pumps, helping motor fuel refiners “survive,” particularly in “these tough economic times,” and pay for it in some other part of our overall tax burden and health insurance premiums.

Gov. Tom Corbett did not include in his budget assistance to the many emerging renewable energy industries because, he said, they are showing every sign of maturing on their own. Unlike, apparently, the century-old coal industry.

Renewable source opponents claim fossil fuels are more economical than the new energy sources. Maybe if renewables got the same tax breaks, they would be more price competitive.

A 2010 report by the state Department of Labor and Industry says there were 13,506 coal miners employed in the state in 1991; by 2009, nearly 5,500 of the workers had been replaced by machines.

In contrast, L&I says energy efficiency and renewable energy industries have created more than 106,000 Pennsylvania jobs.

Meanwhile, China is trying to grow its economy, and we seem more than willing to help them do it. Arch Coal, the nation’s second largest coal producer, has purchased West Coast shipping terminals and Arch CEO Steven Leer has been quoted announcing plans to “service growing coal demand in Asia, the world’s largest and fastest-growing coal market.”

The U.S. government and several coal mining companies plan to make a considerable amount of money selling coal to Asian nations. The coal will come from the Powder River Basin of Montana and Wyoming, which currently supplies about 40 percent of U.S. coal needs.

The Bureau of Land Management controls about 14 million acres of land in the Powder River Basin, said to hold more coal than the U.S. can burn in 50 years, and plans to collect more than $21 billion selling leases over the next three years. Thus we will collect some temporary profit selling coal to Asian nations bent on improving their economic place in the world, unimpeded by environmental regulations about which our own industries so often complain.

Somehow the deal resembles South American drug cartels supplying poison to back street users in Philadelphia. To us, it’s a health problem; to the cartels, its just business.

I am 100 percent in favor of the profit motive. It provides me a dentist when I’ve insufficiently cared for my teeth, and a mechanic when my Jeep needs a new oil pump. And we humans have a long and well-diversified tradition of doing things we later learn were not good for us.

But it seems from here that when we learn what we are doing is harmful, we should change our ways. Soaking up tax breaks, laying off workers and telling us our energy is cheap while leaving us to wonder why our other costs are so high does not quite seem to fit the definition.

“Since many of  these subsidies were passed years or decades ago,” the report, published by the PennFuture Energy Center for Enterprise and the Environment, says, “Pennsylvania’s current policymakers may not all be aware that these subsidies exist or understand their cumulative impacts.”

Maybe we should get on the telephone, to Washington and Harrisburg, and ask whether they know what they are giving away on our behalf.

Photo by jason.stajich


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This post was written by:
- who has written 169 posts for Rock The Capital
John Messeder is an award winning journalist with more than 35 years experience writing about education, environment and local government issues. He has lived in Maine, Florida, California and Alaska, and, by temporary turns, numerous places in between. John also is an accomplished photographer, and avid hiker, conservationist, oral history buff, and author of several books he has not yet got 'round to writing. He lives in Adams County, Pa., just over a hill from Gettysburg, with his wife and Golden Retriever. He may be contacted at - Email jmesseder

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