Ending U.S. Oil Subsidies Would Have Minimal Impact, Study Says

Eliminating the U.S. government’s $4 billion in annual petroleum industry subsidies would have only a minor impact on American oil and natural gas production and consumption, but would strengthen the country’s influence in pushing for global action to slow climate change, according to a report by the Council on Foreign Relations. The report said that ending the three major federal petroleum subsidies would cut domestic production by 5 percent by 2030, which would increase international oil processing by just one percent. U.S. natural gas prices could go up by as much as 10 percent, and natural gas consumption and production would likely fall about 4 percent, the study found. Petroleum industry subsidies are a political flashpoint, with many Democrats arguing for their elimination and Republicans saying they are vital to U.S. energy security. But the study’s author concluded that “U.S. energy security would neither increase nor decrease substantially” if the subsidies are ended.