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Report: State Gives $2.9 Billion in Subsidies to Energy Industry Annually

The environmental watchdog group PennFuture is reporting that Pennsylvania gives the oil, gas, and coal industry around $2.9 billion in subsidies every year. Most of those subsidies come in the form of tax exemptions, tax credits, and grants. Christina Simeone heads PennFuture's Center for Enterprise and the Environment, and said that figure is probably low, because many line items do not disclose a monetary value. She says that lawmakers talk about letting the free market determine industry winners and losers, but state policy says otherwise.

"With respect to energy, there really is no free market, especially in Pennsylvania," she said.

The largest exemption — $1.1 billion — goes to gasoline and motor fuels industries, which do not have to pay state sales and use taxes. Simeone notes the irony that Pennsylvania subsidizes industries that heavily pollute, and also subsidizes pollution controls for those same industries.

"It's like we're almost paying twice," she said.

She said that the state should more heavily subsidize renewable energy which makes up a small fraction of the market, rather than established fossil fuel industries. The entire report [PDF] can be found on PennFuture's website.