EIA Calls Its Skewed Data Garbage

"Garbage" is how US Energy Information Administration Acting Administrator Howard Gruenspecht described their recent report on 2010 US energy subsidies according to those present at the time. Written in response to a request from Congress, the report comparing subsidies for renewable energy sources to traditional energy source's support has resulted in a Freedom of Information Request to the EIA to determine the extent to which it knew its report was inappropriately limited or influenced. Charges of "skewed" data have been leveled at the EIA which is now caught between its role as provider of objective energy analysis and its responsibility to fulfill research requests from Congress.

The report, "Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2010" updates a 2008 report at the request of three Republican Congress members; Jason Chaffetz (UT), Roscoe Barlett (MD) and Marsha Blackburn (TN). The 2008 report looking at 2007 subsidies, showed renewables receiving more government support than fossil fuel sources. But at that time the EIA cautioned that "Some electricity sources, such as nuclear, coal, oil, and natural gas, have received varying levels of subsidies and support in the past which may have aided them in reaching their current role in energy production." The Senator's current research request said the study should be "limited to subsidies provided by the federal government...that provide a financial benefit with an identifiable federal budget impact."

According to several sources, the EIA's Acting Administrator became visibly angry when he learned of the assumptions and requirements limiting the report, calling the report "garbage” and reminding his staff of the EIA's responsibility to impartial analysis. Though he moved to halt distribution of the report it was ultimately provided to the requesting Congress members.

Renewables have no fuel input costs, making their subsidies proportionally lower when measured over the life of the renewable power source. The current study faced the same limitation - the Senators requested a study of the subsidies over one year, ignoring the life-cycle benefits of a renewable subsidy dollar versus a fossil fuel subsidy. Great concern has been expressed that the EIA is providing political talking points to the requesting Senators rather than performing a neutral analysis.

The EIA delayed releasing the report citing concerns about quality assurance and whether it provided a full picture of the subsidy situation. In the executive summary it included a qualifying explanation stating that "this report only includes subsidies meeting the following criteria: they are provided by the federal government, they provide a financial benefit with an identifiable 2010 federal budget impact, and they are specifically targeted at energy." It proceeds to list some of the subsidies excluded from the analysis due to "the difficulty in determining the sufficiency of trust funds to meet potential liabilities and the fact that the excluded subsidies have no direct federal budgetary impact in FY 2010" (to which the study was limited). EIA’s list of excluded but acknowledged subsidies includes:

: America Jobs Creation Act reductions in taxable income for manufacturers including domestic oil and gas producers, a $3 billion benefit

: Subsidized credit for energy infrastructure projects provided by export credit agencies and multilateral development banks

: The lower interest rates available from tax-exempt municipal bonds supporting oil, gas and nuclear projects

: Foreign tax credit for income taxes paid to foreign countries - "major oil companies are significant beneficiaries of this provision”

: The subsidy associated with energy-related trust funds - the Black Lung Disability Trust, the Leaking Underground Storage Tank Trust Fund, the Oil Spill Liability Trust Fund, the Pipeline Safety Fund, the Aquatic Resources Trust Fund, the Abandoned Mine Reclamation Fund, the Nuclear Waste Fund and the Uranium Enrichment Decontamination and Decommissioning Fund

The limitations on this study placed by the requesting Congress members raise questions about the EIA’s role in responding to requests from Congress. Does its responsibility to accurate and thorough analysis confer a responsibility to alter, widen, or otherwise change the scope of the congressional request? Is the EIA obligated to release a report with the limitation of the 2010 subsidy study? Should the EIA be in a negotiating position with Congress when fielding or interpreting requests for research?

Some say the EIA's responsibility to rigorous analysis requires such interaction. The Freedom of Information Request is filed by the Checks and Balances Project, which made public the report prior to its official release. It asks to EIA to provide records of communication between the requesting Senators and the EIA, to determine whether "there was any budgetary pressure applied by members of the House” to get the EIA to release the report during the time when the EIA was delaying it. The EIA is required to respond to the request by August 20.

A snapshot of a year does not reveal the true subsidies being received by each energy sector. The exclusion of a variety of sources of federal support to non-renewable energy sectors results in a skewed report, a use of statistics that any government agency should be wary of. Implicit subsidies, though hard to measure, provide real advantages to the fossil fuel and nuclear industries. When ignored while comparing FY2010 explicit renewables subsidy dollars for traditional and renewable energy sources the result is a false, even manipulative reading of the true state of energy subsidies.