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