Oil industry subsidies are being curtailed as more financial help goes to renewables as stated in action vy President Biden Wednesday.
The pull-back on subsidies is another setback for the oil and gas industry in Louisiana, which is already reeling from low oil prices and the economic recession, and hit earlier this week by Biden with a moratorium on new federal leases offshore in the Gulf of Mexico that was highly criticized by the industry. The moratorium also affected federal lands, which aren’t being drilled as much in Louisiana as in other areas of the country.
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Wednesday’s speech focused on climate change initiatives designed to move from fossil fuels to cleaner and/or energy. Currently, the federal government gives $40 billion to oil and gas companies which appears to include tax breaks.
“With this executive order, environmental justice will be at the center of all we do addressing the disproportionate health, and environmental and economic impacts on communities of color, so-called fenceline communities,” he said, “especially those communities, brown, black and Native American, poor whites, those hard and haunting areas like Cancer Alley in Louisiana or the Route 9 corridor in the state of Delaware,” Biden said. “Lifting up these communities makes us all stronger as a nation and increases the health of everybody.”
Instead the federal government will give support to renewable energy. In what could be a trade off, loss of oil industry personnel could be made up in building and staffing renewable energy sites as both wind and solar plants have been discussed for Louisiana. There will also be jobs in capping abandoned oil wells.
Louisiana benefits from a revenue-sharing model for Gulf of Mexico wells. Thus any ban on federal land and water that affects the Gulf of Mexico has financial repercussions for Louisiana. The state and 19 parishes received $155 million from these revenue sharing programs.
“Every lease sale in the Gulf of Mexico that doesn’t happen prevents tens of millions of dollars from going to Louisiana’s coastal work,” said Marc Ehrhardt, executive director of the Grow Louisiana Coalition.
The question raised is do we use more renewable energy and help the climate or do we stay with oil. I think the tide is shifting to renewables.