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Federal bill would allow clean energy companies to structure themselves as oil companies

Wind turbines near Palm Springs, California.
Enlarge / Wind turbines near Palm Springs, California.

Last week, senators and US officials introduced bills and bills in the Senate and House to create a kind of corporate structure that was originally reserved for oil, gas and coal companies for clean energy companies. .

This structure, called the Master LP (MLP), currently allows fossil fuel companies to take advantage of the lower taxes imposed on limited partnerships while also allowing them to issue publicly traded stocks and bonds. If recently reintroduced bills – which benefit from bipartite support from both the House and the Senate – vote, clean energy companies will have the opportunity to structure their businesses as MLPs and to take advantage of tax and financial benefits.

According to the sponsoring website of Senator Chris Coons (D-Del.), "The newly eligible energy sources would be solar, wind, marine and hydrokinetic, fuel cells, energy storage, combined heating and electricity, biomass, waste heat, renewable fuel, biorefineries, energy efficient buildings, and carbon capture, use and storage. "

The structuring of MLP is one of many motivations that fossil fuel companies can leverage to make their business more profitable. In 2017, a Nature Energy newspaper announced $ 2 billion in annual US and federal tax breaks to boost domestic oil production.

The International Energy Agency (IEA) has recently shone the spotlight on fossil fuel subsidies worldwide. Last week, the agency released a report that, despite the progress made in recent years, the overall value of fossil fuel subsidies has returned to 2014 levels by 2018, "highlighting the incomplete nature of price companies in recent years ". The value of fossil fuel subsidies has increased in 2018 to nearly $ 400 billion worldwide.

Fossil fuel subsidies are ineffective in developed countries because they abnormally maintain the price of carbon dioxide-emitting energy. "The persistent prevalence of these subsidies – more than double the estimated subsidies for renewable energy – greatly complicates the task of achieving a rapid peak in global emissions," the IEA wrote.

Unfortunately, the removal of incentives and subsidies from politically powerful energy companies is an unpopular move for many politicians, especially because it tends to drive up energy prices for consumers.

In the United States, politicians seem more comfortable with simply placing renewable and zero emission sources of energy by offering incentives and subsidies to these industries. For example, the US Senate last week presented the law on jobs and opportunities in offshore wind. The bill will provide federal grants to colleges, governments, unions and other organizations that will train American workers in offshore wind-related jobs. If it is adopted, such a fund would reduce the costs of training workers in the offshore wind industry.

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