The Energy Information Administration (EIA), a statistical and analytical arm of the U.S. Department of Energy, has released it latest report on subsidies to the energy sector, covering the 2007 fiscal year.

Total energy-specific subsidies and support to all energy forms are estimated at US$ 16 billion for 2007: about double the amount estimated in 1999 by the EIA. There has also been a redirection of subsidies over the last decade: while 17% of support went to renewable energy sources in 1999, the share has jumped to 29% in 2007 (much of that to corn-based ethanol).

The largest portion of support went to electricity production (US$ 6.7 billion), two-thirds of which came in the form of tax expenditures. Nuclear power, renewable energy and none-fuel specific subsidies each ranged from US$ 1 billion to US$ 1.3 billion.

The EIA reports have been criticized in the past for providing subsidy estimates that are too low. Commenting on the previous EIA reports on energy subsidies, energy-subsidy specialist Doug Koplow said "the primary reason that EIA numbers are so much lower than other organizations seems to be a narrower research mandate in terms of what programs they were authorized to examine."

The same problem persists with the most recent report, says Mr. Koplow. "Based on my preliminary review, it looks like the newest report contains the same general deficits as the last two EIA reports on this topic: inconsistent baselines, fairly arbitrary definitions of what they include and how it is valued, and the use of a point estimate rather than a range that better reflects the uncertainty of what they are doing," said Mr. Koplow.

The full report, "Federal Financial Interventions and Subsidies in the Energy Markets 2007", is available on-line by clicking here.