Should We Ever Subsidize an Oil Company?

“Of course not!” might be the immediate reaction of most people. But doesn’t it depend on the objectives you are trying to achieve or the behaviors you wish to influence? Are there no cases in which it would be warranted? What if the end result was a reduction in our fossil fuel consumption?

I think most people would like to see us move away from fossil fuels. But fossil fuels are money-makers for the oil companies, and the cheapest option (strictly in terms of dollars at the pump) for consumers. So how do we wean off of fossil fuels?

I've been thinking about the many various off the shelf policy platforms that we could draw on to reduce our dependence on oil and our carbon footprint. I have not been particularly impressed after reading through the Senate or House Democrats existing energy platforms. While they mention many of the right things, it still seems more positioned around satisfying a wide variety of special interest groups than actually producing real reductions in oil consumption or carbon emissions. Furthermore I think some of their proposals around biofuels and tapping into the Strategic Petroleum Reserve when prices for gas rise (I'm talking about Sen. Schumer of course) are downright counterproductive to the goals.

A much better and more expansive list of policy recommendations can also be found at "Energize America" platform put together by the good folks at Daily Kos. But rather than debate all these specific proposals I thought I might start defining the key overarching principles that should guide policy makers in drafting legislation aimed at decreasing oil dependence and carbon emissions.

The first principle is "End All Subsidies of Fossil Fuels".