How Fossil Fuel Subsidies Affect the Environment - Doug Koplow

Doug founded Earth Track to more effectively integrate information on energy subsidies. For the past three decades, he has written extensively on natural resource subsidies for organizations such as the International Institute for Sustainable Development, the Organization for Economic Cooperation and Development, United Nations Environment Programme (UNEP), Sierra Club, the Natural Resources Defense Council, and the Stockholm Environment Institute.  He has analyzed scores of government programs and made important developments in subsidy valuation techniques.  He has provided input on subsidy reform legislation, served as a peer reviewer on subsidy papers from all over the world, and has published his own work in major journals and as book chapters.  In recent years, his work has focused on subsidies to fossil fuels, nuclear power, and the impact of multi-sector natural resource subsidies on biodiversity and critical habitats.

Working collaboratively with other organizations, Earth Track focuses on ways to more effectively align the incentives of key stakeholder groups and to leverage market forces to help address complex environmental challenges.

He holds an MBA from the Harvard Business School and a BA in economics from Wesleyan University.

Topics Discussed Include:

•  Government subsidies - why they are important to think about as we try to decarbonize our economy.  
• How oil and gas subsides work in general and why they are outdated and harmful to climate goals. 
• How taxpayers’ subsidies distort the market for oil and gas produced in Permian Basin.
• The role of different levels of government in supporting oil and gas and whether there are specific challenges trying to reform state-level policies.
• How some subsides were passed in the 1920s when oil extraction was a new industry and haven’t been changed to match the times.
• How three quarters of the subsides support exploration and production, potentially creating a disincentive to phasing out fossil fuel energy.
• How transparency of information on costs and how is paid is often lacking
• Particularly egregious subsidies in the federal realm, in Texas, and New Mexico.
• Examples of federal and state regulations and environmental exemptions that allow the fossil fuel production pollution to walk away from their production pollution and how that is affecting the Permian Basin’s environment for the people.

Further Reading: 

·      The High Cost Well subsidy

·      The Good Jobs First organization

Transcript

Gregory A. Williams: 0:09

Thanks for joining us for another episode of climate money watchdog where we investigate and report on how federal dollars are being spent on mitigating climate change and protecting the environment. We are a private, nonpartisan, nonprofit organization that does not accept advertisers or sponsors. So we can only do this work with your support. Please visit us at climate money watchdog.org To learn more about us and consider making a donation. My name is Greg Williams, and I learned to investigate and report on waste, fraud and abuse in federal spending. While working at the project on government oversight, or Pogo 30 years ago, I learned to do independent research as well as to work with confidential informants or whistleblowers to uncover things like overpriced spare parts like the infamous $435 hammers, and expensive military weapons systems that didn't work as advertised. I was taught by my co host, Dean eraser, who founded Pogo in 1981, and founded claim money watchdog with me in 2022. Dena has spent 40 years investigating and sometimes recovering millions of dollars wasted by the Defense Department and other branches of government. While it Pogo as an independent journalist, as an author, and as a professional investigator. Our guest tonight is Doug Kopp Lau, Doug founded Earth track to more effectively integrate information on energy subsidies. For the past three decades, he's written extensively on natural resource subsidies for organizations such as the International Institute for Sustainable Development, the Organisation for Economic Cooperation and Development, United Nations Environmental Program, Sierra Club, the Natural Resources Defense Council, and the Stockholm Environment Institute. He's analyzed scores of government programs, and made important developments in subsidy valuation techniques. He has provided input on subsidy reform legislation served as a peer reviewer on subsidy papers from all over the world, and has published his own work and major journals and his book chapters. In recent years, his work is focused on subsidies to fossil fuels, nuclear power, and the impact of multisection or multisector natural resource subsidies on biodiversity and critical habitats. Working collaboratively, collaboratively with other organizations, earthcraft focuses on ways to more effectively align incentives of key stakeholder groups, and to leverage market forces to help address complex environmental challenges. He holds an MBA from the Harvard Business School, and a BA in economics from Wesleyan University. Dean, is there anything else you'd like to share about why we're excited to have Doug with us? Yes, I

Dina Rasor: 3:02

really appreciate it. We're on a committee that works together. And I was glad he was willing to take his time to do this. I am I know this from pawing through the Pentagon investigating the Pentagon for years and stuff, rules, regulations, subsidies, and agreements with private companies is in the federal government and state government is visiting and everything else, but that's where the mischief can happen. So I'm really glad that Doug has dedicated himself to talk about how there are some subsidies that and other programs buy back and pay back kind of programs that just aren't well regulated, and have been purposely put in to help them make the oil, fossil and fossil fuel make a lot of money. And so it's what drives me nuts about some subsidies and these other all these other things is and regulations I saw in there to where they can walk, oil company comes in, doesn't do what they're supposed to do. And they're drilling, and walk away from it and leave the mess of the federal government or state governments to clean up. And that's really, yeah, yet they make huge amounts of profit out of it, and nobody goes back and forces them to clean it up. And they give them a waiver. And that's when I my favorite one of my favorite phrases that I found with working with companies that work for government is and in general, the United States they want to privatize the profits but socialized losses. In other words, we made a lot of profit out of pumping this oil out. And now we're going to walk away and leave the federal government state government holding the bag. So anyway, I'm Doug, I'm very glad you're here. And maybe we you want to say a few things before we get into the questions.

Doug Koplow: 5:15

First of all, very happy to be here. I've been a consumer of pogos work for a long time. And some of the work that they've done on natural resource leasing has, I think, has been amazing. So I'm happy to be here. And the world of subsidies is Byzantine arcane, but that's also what makes it fascinating. I think humans are at their most creative when they figure out ways to direct cash flow back to themselves. So it's often quite an interesting puzzle to try and tease out.

Dina Rasor: 5:49

Okay, good. Well, I'm, you know, I'm glad that, you know, I have a thing I we all have our expertise in various forms, when we're investigators and have the ability to look up that kind of stuff is really worth I think the hidden gold is whether a company is doing what they should do. So can you provide us a little more background on government subsidies in general and why they're important, as we recognize,

Doug Koplow: 6:17

I think it's good to start kind of at a really high level. And basically, what governments do think they have three main things that they do, they can raise and allocate revenue, they can establish and run entities themselves to provide goods and services to their population. And they set rules for economic and other activity in the marketplace. And in all these areas, you can have extensive subsidization. It's useful. Remember that not all subsidies are bad. So if you know we're having government programs that are identifying and developing cures for cancer, and they're doing more of it, that's a great thing. My focus is really on environmentally harmful subsidies. And, you know, roughly these are government actions, that either by design or effect, accelerate the production or consumption of natural resources or undermine the ecosystems that support planetary health. A lot of times when people think about subsidies, they're thinking about cash grants, I wish it were that easy cash grants, you can usually see how big they are and where they're going. But we also see critical and much more complicated mechanisms that governments use, such as tax breaks credit markets, giving below market access to publicly owned natural resources, and shifting risks that should be borne by private businesses onto taxpayers. And that last one, is hugely important. From the perspective of the politicians and the recipients of the subsidies, it's actually better. If these things are hard to see, the more obscure they are, the harder it is for other people to value them, the harder it is for other people to get rid of them. And the lower the political cost to the grantor. So to them, this is a feature and not a bug. And also, they will lobby hard to protect and expand the subsidy. So there there's a lot of impediments to getting rid of it. But if you can see them, and you can get rid of them. It's a very powerful lever to accomplish goals that we're all working for around the world in terms of decarbonisation, or protecting our natural resources in general.

Dina Rasor: 8:33

Okay, good. Well, that's you just your you and natural workforce Resources Defense Fund just came out with a report on subsidies in the NG for the oil and gas market in the in the Permian Basin, which is where people don't know it's, it's hot. It's one of the biggest oil producers areas in the world have driven through it. It's abysmal. And it's part of the lower south southeast part of Mexico and in the basically a big portion in western Texas. So you decided to take a look at the tax subsidies and programs that we're going to use for that area, because it's the big one of the biggest polluters biggest problems and, and the workers are pretty unhappy with the big one of those things they call the sacrifice zones. So maybe you can explain how they distort the process.

Gregory A. Williams: 9:41

Sure, and maybe just by means of introduction, I the Permian Basin has a particular timetable in history, you know, it's very different from, you know, the early oil exploration in the northeast and even you know, the oil export exploration. We associated With Texas and oil derricks everywhere, it's it's a much more recent development, if I understand correctly.

Doug Koplow: 10:07

So a couple of things, I think before I get into the Permian, I just want to give your listeners an overview of the scale of these things. So subsidies to oil and gas are kind of like an anti carbon tax. So you know, economists always want to price carbon subsidies that actually do the opposite. We do see carbon pricing around the world, the World Bank estimates, maybe we're getting$95 billion in revenues from carbon taxes and permits. And that's actually doubled over the last few years. So that seems good. But actually, the subsidies are 15 times higher. So we're subsidizing oil and gas around the world at a level of about $1.4 trillion a year. So we've got a really big hole to dig out of. And, and we're seeing this at federal governments and state, state and provincial governments all over the world. The Permian, there's been oil there for a while, but the development of fracking kind of reinvigorated production in that area. And we were interested in looking at it. Because there's been so much production that's pouring out of that region. And we wanted to know, if governments were doing things that were were subsidizing it. And in fact, they are, I wanted to highlight just a couple of the general ways that they do it. And maybe later on, we'll talk about some of the specifics. But I think the, the flaring issue is an interesting one. So if you have a market that's driven by demand for oil, a lot of times you'll have gas that comes up, as well. And, and in the beginning, these fields didn't have good connections to pipelines to move the natural gas out. And even though Texas in particular had rules, saying you could only flare for a certain amount of time before you had to get the pipelines in place. They were generous with the exceptions on that. So these exceptions and also the ability to flare gas without having to pay royalties on it resulted in a lot of these fields being able to open much more quickly than they otherwise would have been able to do. And it really boosted the returns to them in important ways. The Permian also has a lot of different subsidies that protect the oil and gas developers, if prices are low, if their production levels are low, then they start cutting deals on, on reductions and other taxes that they're supposed to pay. And, you know, we in every single industry, there's business cycles, there's new companies that come in and undercut the old ones, there's factories that are less productive when they age, and we don't have governments coming in and cutting deals to keep them open. But all throughout the Permian Basin, there are these subsidies that help the wells stay operating. Go ahead. Well, I

Gregory A. Williams: 13:21

just wanted to take a moment, if you would explain to our listeners what flaring is, and, and how, you know, at some point, I think it was a safety measure used by old fashioned oil drilling, but it's, and it's often I think, excused in that fashion. But it involves burning tremendous amounts of natural gas without any sort of environmental mitigation.

Doug Koplow: 13:47

Yeah, I mean, flaring it, and you're burning it off is definitely better than just releasing it for sure. And there's definitely a safety element to it. But but you're wasting a valuable natural resource. And, you know, in North Dakota, for example, the flaring was so high that you could see it from space, the Permian Basin is similar. So even when you successfully burn it to reduce the methane, you are you're wasting a finite resource that often the companies don't need to pay for their loss. They don't have to pay the severance taxes. They don't have to pay the royalties, because it's, it's, quote, not reaching market, but they're destroying the resource that could reach market and they're doing it out of expediency so that they can get get it to market. They can't get it to market faster. So that's really a big problem. Dean also mentioned the whole issue of leaving messages behind. So you know, in a lot of the natural resource extraction industries at the end of life and throughout the process, you have more mines that need to be closed up, you have oil and gas wells that need to be properly plugged. Otherwise, you've got environmental problems all over. And the economics of these are that in the beginning, you make a lot of money towards the end of life, production is lower, and the time that you have to pay the cost to properly shut it are rapidly approaching. So under the Resource Conservation and Recovery Act, at least for some industries, the US government said, Hey, this is a common problem in these types of industries. And we need to have financial bonds and financial insurance to make sure that if the company goes under, we can clean it up. The problem is that in oil and gas, even though we have bonding, the levels are just dramatically too low. So New Mexico has bonds for well closure that are about 1% Of the estimated cost. Texas doesn't even publish the data on what their face value of bonds is relative to the liability. But there's there's great work that another group Carbon Tracker did trying to map out state by state, how big these liabilities are they and they estimated for Texas and New Mexico, there's about $110 billion of liability costs associated with these wells. Now, not all of them will end up on the state. But if you are bonding at such a low level, a lot of them well. And that's a problem, because they ought to be incurring those insurance costs at the outset. And it shouldn't be reflected in the economics of their production.

Gregory A. Williams: 16:41

So my understanding, is this a problem that, that affects the energy sector, across the board, and particularly in the context of nuclear power plants, you wind up with this sort of artificial economy of companies that specialize in decommissioning, and they come in, they buy up old nuclear power plants, and then try to decommission them at the least cost possible, which normally is a great economic incentive. But in this case, they're cutting all kinds of corners in order to have as much of that initial bonding left over for them to just pocket his profit. Does that affect the you know, the extractive industry as well?

Doug Koplow: 17:23

I mean, Greg, you raise a very interesting point, I spent a lot of time this past summer looking at that specific issue. Before the private companies came in as decommissioning contractors, the US system for plant decommissioning was actually one of the best in the world. So we had funds that were collected for the whole life of the reactors. And they were held outside independent of the companies. So even if they went bankrupt, there were funds there. Once the private companies came in, there were all these problems, oil and gas, and, and old refineries and things in, you know, a variety of facilities like that. We don't even have the funding adequacy in place that it hasn't been adequately bonded, it hasn't been adequately insured. So we have a deficit right from the outset. That's likely to be massive.

Gregory A. Williams: 18:21

You had your hand up?

Dina Rasor: 18:22

Yeah. So just so the listeners can realize that this isn't something new. Why did I was surprised as I read your report, of course, new stuff has been put in, but a lot of this stuff was, was basically there when they in the 20s and 30s, when they actually started the industry up in the automobile and everything else. And so I'm really surprised that after all these years, you know, I can see subsidizing a new industry, but I think they're past their past new industry. Now. What do you what do you think why, you know, is it just because these rules get entrenched and started to change them?

Doug Koplow: 19:05

That's, that's absolutely the case. There's a concentrated set of beneficiaries, and they get significant financial benefit, and they organize to protect their benefits. And that's, that's what happened. So, you know, you do have states that recognize their bonding levels are too low. And then they try to increase the levels. And, and they run into a lot of political headwinds when they tried to do it. Now, one other thing I did want to just mention about the Permian is there's a lot of stuff coming down the pike. So this is this is not as you don't have a set of subsidies and they're just there. There's continually new stuff that comes in and the that part of the country is likely to be the largest location for sequestering captured carbon, and there's going to be really large subsidies primarily through 45. Q and the tax credit that's going to flow to that sector. And it's going to have all sorts of problems. And I know you had a guest on one of your early shows who went into detail about that, but this is going to be really, really a significant subsidy to oil and gas in the Permian area.

Dina Rasor: 20:21

Okay, well, in the end, that leads me the next time, one of the things that also that we're fine finding out in other areas, but of course, finding it here is transparency of the information on costs, and how much should be paid? Because some of this is federal, federal land, and, you know, and plus what the prices of whatever has that effect, you know, exactly, because it says your comments, your costs, didn't know how much money you spend is go to with their subsidies. And so I I'm just seeing that in this other areas, like pipelines and things like that. They are not keeping track. It's hard to track the federal government and and know how much to pay.

Doug Koplow: 21:10

Yeah, so I mean, there's a few elements that I think what you're saying, number one is that you're dealing with probabilistic events, right? So you've got a bunch of facilities, a bunch of oil and gas wells, you don't really know how much each one's going to cost. And it makes it harder to set to estimate the subsidies or set the requirements. And, you know, I think in that situation, it's useful to look at like our car insurance, right? We don't know exactly how much we're going to cause in an accident. But there's a distribution of it and our insurance isn't at the average cost. We don't have to just get insured for the average cost of an accident, we have to be insured at a much higher level. So that overall, if there's an accident that a higher level, we're still insured, and that's the approach that should be used in oil and gas as well. But isn't. And I think the second element is the issue of transparency. states and the federal government can do a much better job identifying how much money they're spending, what other types of subsidies they're providing, and how much they're worth. But they don't really have an incentive to do it, because it's politically difficult. But, you know, there's a lot of people, regardless of their views on climate change, or clean energy, they want the governments to be more fiscally prudent. And so there's a natural overlap, he tried to be between trying to get rid of environmentally harmful subsidies and try to have more efficient government.

Gregory A. Williams: 22:51

Yeah, maybe gonna take a moment to explain how government leases work and how mineral extraction companies rely on leasing public land to do their business.

Doug Koplow: 23:03

Sure. So in in onshore, the federal government owns a lot of oil and gas lands with oil and gas that it leases out, and they have lease options to do it. States also own land with oil and gas, and sometimes their joint leases and sometimes their state leases. But there's a couple of elements in terms of the subsidies that are relevant here. Number one is if the government is charging a lower royalty lower percentage share of the production than what a private market party would pay. And the second element is if you have not enough bidders for the for the leases, then you're not going to get a fair market price. So this is a significant problem in the United States, and pogo has done work, certainly on the offshore looking at the small number of bidders. But globally, it's an even bigger problem, because national oil companies control about 90% of the oil and gas reserves. So the the degree to which they're leasing it below market is generating a lot of production that's going on to the global markets.

Gregory A. Williams: 24:27

So in other words, the the citizens of governments around the world, citizens of countries around the world own most of these mineral resources. Yes. And through our governments, we lease those we lease access to those mineral resources to these very wealthy multinational companies.

Doug Koplow: 24:49

Yes, and sometimes the companies are actually national oil companies. So they're the government itself. And on the one hand, you'd say well, then the government itself has an incentive. To make sure their citizens get enough money and get a fair deal, but that isn't always what happens. There's a lot of differing objectives that they have. And there's corruption in some of these companies, even if they're state owned. So you end up with not great outcomes.

Dina Rasor: 25:21

Yeah, okay. And then another part of this is that we're supposed to be what we're, what our government is saying to other people in the world, you got to start pulling back, pumping the oil, keep it in the ground, you know, defending, and there's been, you know, conferences and everything else. And yet, the United States is just pumping as fast as they can. But I saw on your report, it said, three quarters of the subsidies, support exploration and production. And so here we are three quarters of the subsidies to make these oil companies and gas companies whole. And they're putting it into making more, I thought, Wait, aren't we supposed to be trying to have subsidies to encourage them to make less? So what was your comment on that?

Doug Koplow: 26:15

It's a big problem. We do see tremendous subsidies to exploration and production. And, and it does make it much more difficult to move off of oil. A couple of years ago, I worked on a really interesting study with the Stockholm Environment Institute, where we actually had oil field level data from ricette energy for 1000s of fields across the country. And we simulated how removal of the subsidies would affect the rate of return on those fields, and basically found that over half of the fields were dependent on the subsidies to hit their return their hurdle, the hurdle rates, the minimum return, that their investors needed for those projects to move forward. But that's, that's a pretty stunning finding, because those fields wouldn't have come online. If you didn't have the subsidies, and now you have situations with like 45 Q, and most of the carbon capture money is going to go to support. Basically, co2 coming off of oil and gas production sites that's reinjected for enhanced oil recovery, and it's going to monetize the co2 streams instead of taxing it. And that's gonna make fields that wouldn't have been economic without this carbon capture subsidy, economic and it's going to have the exact perverse effect that you talked about Dana.

Dina Rasor: 27:53

So we're making it we're giving them money. And the, the best subsidies you can get is in production and exploration. So you make more make more make more meanwhile, like carbon capture, they're saying, Oh, we had a cat burn when we burn it, we got to capture the carbon. So then they turn around, and now we're doing billions of dollars trying to capture the carbon and put it back in the ground. And so it just seems like this sort of full errand and on going round around but of course, it what has to do with is it's tough to make money. And so could you give us some examples of some of the most egregious subsidies that the federal taxes in New Mexico something that when you looked at it, like when I looked at it about, you know how much you can wave cleaning up and walk away from these terrible fracking sites and oil pumping sites, and then federal government, Uncle sucker will come and clean it up. And that mean that thing right from the beginning, jumped out at me, but what other ones see? What did you have that feel like horror stories?

Doug Koplow: 29:04

Now, one of the ones I thought was very interesting was something called a high cost well, subsidy in Texas. So this gives reduced severance tax. If you are a, quote, high cost natural gas well, and this the rules on it have to do with how deep the oil is, and whether it's coming from specific formations. It doesn't have to do with whether or not the well is profitable without the subsidy, because often often they are. And so this is this is a state level subsidy. I guess. One general point is that most of the studies that have been done on fossil fuel subsidies tend to focus on the national level. But there's a lot of stuff going on at the States and in other countries at the provincial levels. And these are sometimes very large. This one is is very large. The state itself estimates that between 2009 and and their projections for 2028. This will be about $17 billion in subsidies to natural gas industry. Another really kind of interesting thing and frustrating thing is that Texas has arcane rules on what tax breaks need to be reported. And because they divide natural gas and oil subsidies, even if they're coming from the same well under different statutory codes, it's resulted in some years where this particular subsidy was a billion dollars, but didn't show up in their tax expenditure budget. The Well, plugging that I mentioned earlier is all across the country. It also applies to old coal mines. And it's really hundreds of billions of dollars and very frustrating that nothing has been done in order to internalize those costs. So we talked mostly about the work that I did for NRDC on the Permian Basin, I also did a review of subsidies in California. Because you know, California is the clean energy state, but they do have oil production as well. And they also have oil subsidies. And one of the interesting things is that there's only two states in the country with no tax on oil and gas extraction, Pennsylvania and California. And it makes really no sense. California claims that they have a property tax instead, but the amounts are lower. So they're still generating a very significant subsidy to the oil industry there. Another interesting thing about California is that they have oil and gas wells that are located sometimes very close to people's homes and schools and hospitals. And they finally put in a rule that you have to have a buffer zone of 3200 feet between your well and these buildings. The industry fought back hard, and and it's now in a referendum. So it's been delayed at least two years. But what I was interested in is who's insuring for environmental and health damages from these wells? And I contacted probably 20 Different organizations to say, what's required of them? Do they have to have insurance? And no one could give me an answer. I think that was pretty stunning. Yeah, well, I,

Dina Rasor: 32:24

you know, just a lot of these subsidies, things, we're looking at the subsidies and everything else. And I have one complaint that I have when I talk to activists, like, like Trump, you know, they're trying to shut down a coal plant and replace it with something environmentally friendly, is that even though the national, federal government is saying, yes, yes, we want to help everybody's in a disadvantaged area, we're going to cut through the paperwork, we're going to make sure there's people hired locally, and blah, blah, blah. They're finding out that the local federal officials who have to live with the pressure from the oil companies and politicians and everything, are not giving the local advocates kind of information, they need to be able to try to make an informed thing with the old canard which is very popular on the Pentagon have. This is proprietary information. So the local people need to realize that they're, you know, you, if you're having trouble getting information, they should give us a call because we're we're working on trying to get the local, federal people to abide by the law. So

Doug Koplow: 33:41

super important. I just want to touch on one other thing that you mentioned, which was environmental exemptions. And, you know, this is something that my NRDC co authors did a bunch of the work on, but there's very widespread exemptions for most of the environmental laws for oil and gas production sites. So stormwater runoff permit requirements are waived under the Clean Water Act, Superfund if substances occur naturally in oil and gas and cause pollution, but if they're naturally an oil and gas, you can take action under Superfund fracking chemicals, which are all over the map. Lots of toxics add additives, you don't have to disclose them under the emergency planning and right to know act, although, interestingly, Pennsylvania is just putting in the first regulations at the state level that's going to force them to do that. So, you know, we have a lot of these exemptions, and, like with subsidies, they tend to come into play slowly over time, one by one by one and in the end, you have a situation where there's a lot of things that are supporting the industry and very hard to get rid of.

Dina Rasor: 34:50

Okay, well, your report also has a bunch of recommendations. And maybe you could, you know, I always want I always don't want to not do Just what you call it eight an awful story, you know, everything's bad, isn't that okay? Let's talk about what can be done and implemented. You feel that it realistically to be implemented it and then also the problems to get that done.

Doug Koplow: 35:19

So I think there's been positive movement and in a few areas, I think that the federal activity on methane emissions, where they are now regulating it and charging for it, even though it's not a perfect system, I think are really important. And I think that that will make a difference. They are being supported in their work by the rise of satellite monitoring. So there's a bunch of satellites that are now able to see methane and nitrous oxide and pinpoint where it's coming from. And I'm sure you'll be surprised to hear that the levels that were reported by the companies don't actually match what was coming off their their sites. And in some cases, they didn't even seem to know that there were big leaks from their sites. So I think on remote, more remote monitoring and the emissions controls in this area, I think that there's a lot of opportunity, I think New Mexico had some significant potential subsidies associated with how they calculate severance taxes, and that they would allow companies to deduct the transport and processing costs to go from the wellhead to the market. It's in their interest to do this, well, it's not clear that they have enough auditing firepower to do it. It's a common issue of cost across a lot of oil and gas producing states. But I think that's an area as well with maybe some improved clarity and definitions from some national environmental groups that a lot of state governments would find attractive to pursue. And, you know, a couple of other areas, you know, a lot of our recommendations had to do with transparency. And transparency unfortunately, runs into the beneficiaries not really wanting the information to come out. But, you know, as you mentioned, Dean, I think, if you can get people on the ground to start asking questions, I think it does make a difference. So if you live near a polluting facility, if you live near an oil well, and you want to know, what is their insurance, ask them. And if they don't tell you ask the regulator, and if they don't, if the regulator still doesn't tell you make it public, that they're not telling you. And I think, you know, particularly if you're a school or a hospital, and you want to know what emissions are, and you want to know what insurance is, it looks pretty bad if the facility doesn't give you basic information. Same thing for if you are in an area with lots of fracking and lots of heavy trucks, and you're noticing that your roads are getting damaged, because they are getting damaged. Ask your government who's paying to fix it. Ask them whether they have special road use management agreements with the with the companies that are sending heavy trucks on the road. So the damage is have to be repaid by them as opposed to you. And I guess, the last really important area of transparency is who are the people behind these oil and gas operations near your home, trying to ask their LLCs. But a lot of times what can happen is someone will have an LLC, they'll abandon a well and some of the partners of that LLC will start a new one. And then they'll have another production site. And they never are held responsible for the first well that they abandoned. So I think that there's a lot of work that can be done on a local level, to try to bring these things to the fore and increase the leverage to get rid of subsidies and also achieve better environmental and health outcomes.

Dina Rasor: 39:07

Yeah, and I think that's one of the things that you have to realize is that because they are claiming that they want to make activists and advocates involved us that is a thing to try to get in here and to you know, with fracking, it's just ridiculous. You can't you know, what they're putting into the ground goes proprietary, you know, a lot of that stuff can be challenged. And I think that it's it, now's the time for the lope for local people to get up and say, you know, we want to find out exactly what's going on.

Doug Koplow: 39:43

So one of the things we're doing at the national level is looking at, are there ways to make your tax returns not quite as confidential as they are now. So there's there's definitely a need for people's time. Tax Returns not to be made public. But if you're claiming tax credits, and there are lots of states that make tax credits public, and they tell how much specific companies are getting, and those companies have not gone out of business, and they have not suffered at the federal level, that's not possible right now. But we're talking about tax credits under the inflation Reduction Act, that are going to be 10s, or hundreds of billions of dollars and money coming from the federal treasury. So in those types of situation, and some of it is refundable, which means that if you don't have enough tax liability, the Treasury will pay you. So it's really not very different from budget spending, it makes no sense that, that taxpayers are unable to see the patterns and who's getting those credits, to see the scale to see whether they're actually accomplishing what they were supposed to accomplish when they were put in place. So that's we're trying to look for leverage points to do it in a way that gets this transparency while also protecting the privacy, the core elements of tax privacy.

Dina Rasor: 41:09

So that Okay, so that's one of your name, big next pushes, is there a subject area, you're starting to look into that if anybody has any information, they should send it to you?

Doug Koplow: 41:23

My general finding is that anytime I look longer at a geographic area, I see more subsidies. So I have no belief that my work in California or Texas, or New Mexico has actually uncovered all that's there. And if you are in one of those states, or you're in another oil and gas production producing state where you know that there's significant subsidies, even if they seem arcane, send me an email, I would love to hear about them. And sometimes you just see something that just looks strange. And that's the initial thread that you start following. And all of a sudden, it turns out that it's hundreds of millions or billions of dollars of subsidies that people weren't aware of before.

Gregory A. Williams: 42:13

And so is that fundamentally, what motivates this difference on on behalf of governments is the traditional pursuit of of tax revenues, they would rather have, you know, revenue producing company in their district and in an adjacent district, or is it something more nefarious than that?

Doug Koplow: 42:32

Yeah, it's a great question. There is absolutely tax competition. And there's a DC group called good jobs first. And what it does is it tracks government subsidies across all sectors that are being thrown out there to try and get job creation. And they're saying, Well, you ought to try and get good jobs first, not just the ones dependent on subsidies. But there's a bunch of other things, too. So sometimes it's you have a natural resource endowment, or you had a need in 1920, or 1940. That led you to pursue certain policies. And maybe those policies make no sense anymore. But they're entrenched. And there's a group that's dependent on them. And there's a group that's lobbying to protect them. And so they stay. I mean, to bring in a defense example, isn't it the case data that the military sometimes wants to get rid of weapon systems, but the politicians won't stop doing them? Because it's got all the all the jobs in their districts? Yeah,

Dina Rasor: 43:30

yeah. In fact, that used to be one of the things we used to do regularly in the 1980s is find maps and lobby plan, wait a lobby plan, did various lobby plans. And, you know, we'd like the divid anti aircraft gun. And they actually would have the picture of where the plant was, but then they had a map of the United States and how many jobs were in each one. So they were like, you can't cancel this, because, you know, it's this that we did get it cancelled, but not in a good way. It was because it was, government had to pick up most of the funding on it. But yeah, it's, it was way it is with the government. And I quite frankly, think when you look at Biden passing one of the best laws ever. But on the other hand, it seems like we had to pay off the wolves. And to pay so much of the money's going to fossil fuel industry, we should be running down rather than running up. And even though there's a huge amount of stuff that's never been funded before, I still find that we're almost like hostage to pay various subsidies and extra money to these people. To be able to even start getting a clean economy. It's frustrating.

Doug Koplow: 44:50

Yeah, the challenge is that you know, it would have been much more efficient to have a tax on the pollution and it would have sent a much better price signal. And that when you start subsidize Using people in the non polluting business, then lots and lots of people go into the non polluting business and it's pretty hard to measure what they're actually providing.

Dina Rasor: 45:13

Well, is there any other any other subjects, you want us to talk about projects you're working on it, you want to talk about,

Doug Koplow: 45:20

I'll say a brief mention about the environmentally harmful subsidies more broadly, I did a big assessment looking at kind of global trends across subsidies to water and agriculture and forestry and energy. came out about a year and a half ago. The the, the key point here is these things are additive. So if you if you have a bunch of subsidies coming from different levels of government that are all flowing to a particular region or a particular industry, a lot of times only that factory owner or that producer knows the full take that they're getting from the federal government. But you need to look not nationally, you need to look locally, and you need to look across multiple sectors in order to see how these things are really affecting critical ecosystems around the world. And I, you know, I do worry about habitat loss from from climate change, and also from depletion from a lot of driven by a lot of these subsidies. So that's an area that I've been focusing on, and one that I hope will continue to get a lot more attention going forward. Well,

Dina Rasor: 46:39

when you're ready, come back. And we'll do another show just on that, because I know that's ever like literally important set of things to I think the agriculture thing is really been overlooked. And it's going to be the thing that causes some most panic. And we can't get beyond it's the very basis of life. Oh, we're gonna have a food shortage. We have a toilet paper shortage in this country, people stuck up for two years or the toilet papers. I can't imagine what happens when this if that food system breaks down from climate change.

Gregory A. Williams: 47:10

Alright, well, thank you very much for joining us here tonight. We hope to see you again soon. And in the meantime, we invite our listeners to check out the links that we're going to include in this podcast and learn what you can about your state and local energy subsidies. Anything else you'd like to say in closing?

Doug Koplow: 47:33

Thank you for the opportunity to be here.

Dina Rasor: 47:36

And thank you for what you do.