The oil and natural gas industries have been the primary beneficiaries of more than $800 billion in federal energy incentives over the past six decades, according to an updated study by a Washington, DC-based research and consulting firm.

Oil and gas combined garnered 60% of the federal incentives between 1950 and 2010, with 44% of the roughly $837 billion in federal support going to the oil sector, said the study by Management Information Services Inc. (MISI), which was commissioned by the Nuclear Energy Institute.

The report concluded that the oil industry received three times more in combined federal incentives ($369 billion) than the natural gas sector ($121 billion) during the past six decades. The study updates an earlier report, which analyzed federal energy incentives between 1950 and 2006.

MISI said its study revealed that nuclear energy technologies received about the same amount of federal energy incentives as renewable energy resources. “In fact, they’re roughly equal. Of the total incentives provided since 1950, nuclear energy has received 9% ($73 billion), while renewable energy also…received 9% ($74 billion). Coal and hydroelectric energy sources, meanwhile, have received 12% ($104 billion) and 11% ($90 billion) of the total, respectively,” the report said.

The report identifies six categories of incentives, including tax policy; regulation; research and development (R&D) funding; market activity; government services; and disbursement.

“Tax policy has been, by far, the most widely used form of incentive mechanism, accounting for $325 billion (45%) of all federal expenditures since 1960,” the report said. The oil and gas industries receive percentage depletion and intangible drilling cost deductions, among other tax breaks, incentives to spur exploration and development. Federal tax credits and deductions also have been used to promote the use of renewable energy, according to MISI.

Federally funded regulation and R&D funding, at about 20% each, are the second and third largest incentives for the energy industry, the report said.

President Obama has proposed scaling back $40 billion-plus in oil and natural gas tax breaks as part of his jobs stimulus bill (see Daily GPI, Sept. 13). However, it remains to be seen whether the joint House-Senate select committee, or super-committee, will strip producers of the tax breaks as part of its legislation identifying an additional $1.2 trillion in cuts to the federal deficit by Nov. 23, with Congress to vote on it by Dec. 23.

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