Research has shown that rich nations are still providing subsidies of $88 billion annually to oil, coal and gas companies. The British, American and Australian governments continue to offer tax breaks to exploration and production companies to investigate potential new reserves and to establish possibilities for fully extracting reserves from existing and marginal fields.
This has caused concern amongst green and environmental groups, who say that fossil fuels should be left underground to help the world avoid further damage from climate change. However, countries with access to oil and gas reserves are keen to realise the economic benefits and energy security of supply that come from further extracting remaining hydrocarbon reserves or from aiming to extend existing production sites to fully realise their potential.
An incredibly detailed breakdown of fossil-fuel subsidy schemes across the world has discovered that the American government offered oil and gas companies $5.2 billion to explore for fossil fuels last week. Australia offered $3.5 billion of subsidies, Russia offered $2.4 billion and the British government offered $1.2 billion. The vast majority of support took to the form of exploration tax breaks for the deep offshore hydrocarbon fields.
This subsidy money was directed towards large multinationals and smaller businesses with specialisms in exploration, according to the Overseas Development Institute, a British think-tank, and Oil Change International, an analyst firm based in Washington.
The British regime has been the most generous over the past three years, with the government having offered tax breaks of more than $4.5 billion to companies from America, France and the Middle East. The government is particularly keen to extract remaining reserves from existing sites and to employ innovative technologies and approaches to benefit from the remaining oil and gas in marginal fields.
Britain has also supported the industry in exploring for possibilities in countries such as Brazil, India, Guinea and Ghana, as well as Qatar, Russia and Uganda. The report was produced from data taken from government documents, the OECD, company reports and other data sources.
America is spending $1.4 billion annually to explore in Russia, Nigeria and Columbia, and Russia is actively subsidising exploration work in China and Venezuela.
However, although the report has been written with criticism about the use of public funds in mind, other analysts and commentators have pointed out that work to progress green and renewable technologies is moving ahead strongly alongside traditional oil and gas production. The pace of growth for new renewables capacity has out-performed expectations.
Many argue that there is a place for both energy sources in the modern world, and that it makes sense for existing reserves to be mined, particularly where existing fields can now be further developed thanks for new technologies. Alongside this work, renewable energies will continue their own development curve and become increasingly market-ready and competitive, with some big energy giants such as Shell and BP already developing dual business streams to maximise the broader potential for both hydrocarbon and renewable energy.Last updated on 10:12AM - 14/11/14