What the History of Oil Can Tell Us About a Renewable Future

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A brief look at oil’s subsidized history in order to understand that government influence is necessary for a renewable energy future.


Transcript Provided by YouTube:

 

 

00:02
[Music]
00:06
these days oil is everywhere it fuels
00:09
our cars
00:10
it heats our apartments it’s in our bike
00:12
tires and it’s even needed to make our
00:15
Tupperware containers petroleum is
00:17
firmly established in the global energy
00:20
system but that might not be the case in
00:23
the future
00:24
within the next 20 or 30 years there
00:26
could very well be a turning of the tide
00:28
an energy transition that will heavily
00:31
depend on federal and public support of
00:34
a renewable energy future in order to
00:37
understand how and why federal influence
00:39
is necessary to alter the current task
00:42
of our energy landscape let’s take a
00:44
look at the history of petroleum oil
00:48
wasn’t always a foundational fuel and
00:50
the American economy before there was
00:52
oil there was coal before there was cold
00:55
air is kerosene and before there is
00:57
kerosene there is whale oil rapid
01:00
transitions to and from energy systems
01:02
have happened in the past
01:04
but more recently federal level support
01:06
has been necessary to entrench certain
01:08
fuel sources in American culture 101
01:12
years ago in 1916 oil drilling was
01:15
invigorated with the introduction of a
01:17
tax incentive for expensive chemical
01:20
drilling and dry hole costs the
01:22
provision allowed the intangible cost of
01:25
drilling well such as wages fuel and
01:28
ground clearing to be written off and
01:30
deducted within the first year of the
01:32
wells life it was being capitalized and
01:35
depreciated over time this essentially
01:38
meant that it was cheaper and much more
01:40
appealing to drill new oil wells because
01:42
corporations could get immediate and
01:44
full tax write-offs and they drill
01:46
instead of having to spread the amount
01:49
deducted from their taxes over the life
01:51
of the well in conjunction with this tax
01:53
incentive and oil depletion allowance
01:55
was introduced into law in nineteen
01:59
which allowed companies to treat a
02:01
certain percentage of the oil they
02:03
pulled from the ground as capital
02:04
equipment and thus get a tax break from
02:06
it as a result oil companies could
02:09
deduct 27.5% from the gross revenues
02:12
Texas Senator Tom Connolly who sponsored
02:16
the tax break even emitted we could have
02:18
taken a five or ten percent figure but
02:21
we grabbed 27.5% because we are not only
02:24
hogs but the odd failure made it appear
02:26
as though it was scientifically arrived
02:29
at both these tax incentives mental
02:31
large boom for oil the drug gun is cost
02:34
and made drilling new wells tantalizing
02:36
over the course of the century oil and
02:38
gas benefited from four hundred and
02:40
forty six point nine eight billion
02:42
dollars in government funded incentives
02:45
so oiled in just sprout up as a result
02:48
of new technologies and ambitions
02:50
although new facts definitely did help
02:52
instead became entrenched in the
02:55
American energy market large part
02:57
because of government influence
02:59
alongside the massive tax breaks that
03:01
provided a strong foundation for cheap
03:03
oil federal government indirectly
03:05
influenced oils importance through large
03:08
infrastructure projects like the federal
03:10
aid Highway Act of 1956 publicly
03:13
sponsored roads cemented a car reliant
03:16
culture ultimately meant reliance on oil
03:19
even further the united states who
03:22
sponsored military and diplomatic
03:23
missions into an oil-rich persian gulf
03:26
in order to safeguard a steady supply of
03:29
fuel overall it would not be reached to
03:31
say that the united states government
03:33
has spent over 1 trillion dollars on oil
03:36
and gas in the last century the
03:38
important lesson here is that government
03:41
action is necessary to influence energy
03:43
markets when it comes to energy there is
03:46
no such thing as a free market while
03:48
other sources of energy like coal wind
03:51
and solar have definitely benefited from
03:53
subsidies in the latter half of the 20th
03:55
century the overall amount pales in
03:58
comparison to
03:59
benefits received by oil and gas
04:01
companies Trillian subsidized history
04:03
makes it clear that we need strong and
04:06
steady government incentives in order to
04:08
make a swift transition to renewable
04:10
energy in the case of wind government
04:12
influence has come in the form of the
04:15
PCT or production tax credit since its
04:18
implementation in 1992 however the
04:21
incentive has been allowed to expire
04:23
multiple times which has led to a boom
04:25
and bust cycle instead of a steady rise
04:27
of investments in wind farms
04:30
technologically renewables have advanced
04:32
the point where they can compete
04:34
toe-to-toe with coal or other energy
04:36
forms however in order for sustainable
04:38
energy systems to truly take hold
04:41
we need substantial subsidies that lock
04:44
them into American culture much like how
04:46
oil was a century before
04:48
[Music]
04:52
hey I’m currently travelling right now
04:54
so that’s why I’m in a different
04:55
location but if you liked the video
04:57
please share it on reddit or Facebook or
05:00
Twitter also if you’re interested you
05:03
can go over to my patreon page where you
05:05
can support me financially other than
05:08
that thanks for watching and I will see
05:10
you next Friday
05:14
[Music]


This post was previously published on YouTube.



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What the History of Oil Can Tell Us About a Renewable Future