We’re paying gas money for Iranians

(article “IEA warns of ballooning world fossil fuel subsidies” by Muriel Boselli, Reuters)

PARIS, (Reuters) – Global subsidies for fossil fuel consumption are set to reach $660 billion in 2020 unless reforms are passed to effectively eliminate this form of state aid, the International Energy Agency (IEA) said on last week.

“Governments and taxpayers spent about half a trillion dollars last year supporting the production and consumption of fossil fuels,” the energy watchdog to 28 industrialized countries said.

“In a period of persistently high energy prices, subsidies represent a significant economic liability,” it said in an extract of its annual World Energy Outlook, which is due to be published in full on Nov. 9.

The IEA estimated such subsidies at $409 billion in 2010, compared to $312 billion in 2009. Oil products had the largest subsidies at $193 billion in 2010 while $91 billion went to natural gas. Iran and Saudi Arabia had the biggest subsidies.

“It’s a huge amount of money,” the IEA’s Chief Economist Fatih Birol told reporters at a joint press briefing with the Organization for Economic Co-operation and Development (OECD), which also presented a report on the issue.

“Without further reform, spending on fossil fuel consumption subsidies is set to reach $660 billion in 2020, or 0.7 percent of global gross domestic product,” Birol added.

In 2010, Birol had forecast that fossil fuel subsidies would reach $600 billion as early as 2015 without further reforms. He said the slower rate of growth was partly due to efforts in certain major countries including China and India.

“This is thanks to the improvements in India, China, Russia. They have made significant efforts. We have to be fair,” he said, adding that only 8 percent of those subsidies reached the poorest population.

Leaders of the Group of 20 (G20) major economies committed in Pittsburgh in 2009 to phase out, over the medium-term, inefficient fossil fuel subsidies that encourage wasteful consumption.

OECD Secretary General Angel Gurria urged developing and rich nations to phase out the subsidies urgently.

“As they (nations) look for policy responses to the worst economic crisis of our lifetimes, phasing out subsidies is an obvious way to help governments meet their economic, environmental and social goals,” Gurria said at the press briefing.

Eliminating fossil fuel consumption subsidies by 2020 would cut global energy demand by 4 percent and considerably reduce carbon emissions growth, the IEA said on last week.       

Our Take:
While we are hearing from the Federal Reserve that our economy is in danger of faltering, the International Energy Agency reports that the Iranians subsidized their petroleum products for their own citizens to the tune of $409 billion dollars in the past year. Where did that money come from? From the Europeans and Japanese who buy the rest of the oil product Iran produces. Our dependence on OPEC helps support the highway robbery prices we must pay, no matter which pusher serves as our source.

Can we afford to be in any way helping a country that holds our citizens hostage and, in defiance of peace treaties are actively developing nuclear weapons capability (Guess where the money for that expensive hobby comes from?). Why are we buying gasoline from the country that produced the terrorists who flew into the World Trade Center and the Pentagon?

We pay through the nose so Iranians and Saudis can have cheap gasoline?

And the $660 billion figure most likely does not include the huge military expenditures made by the US, in large part to keep global sea lanes open, so everyone can enjoy a free flow of overpriced oil.

The documentary film “Freedom” estimates that America gives away $150 billion a year in oil subsidies. Congress could not summon the will to touch those subsidies even while it came close to eliminating the subsidies for ethanol, piddling in comparison, at $6 billion a year. Those subsidies come to an end on December 31, and don’t look to Congress to raise a finger to do anything to boost the job-creating renewable energy industry, while oil fat cats collect money that can’t even be called pork–it’s bacon fat. And it’s pushing our economy to the brink again.

Time to wake up and switch over ASAP to cleaner burning renewable energy that will build jobs and economic opportunity in America, instead of financing the high-flying lifestyles of rogue nations like Iran and totalitarian states like Saudi Arabia.

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