Study: Oil & gas boost European government treasuries by over €400B annually

Posted on 18 June 2014

Oil and gas contribute hundreds of billions of euros to European government revenues every year, a new study shows, highlighting how the industry – far from being subsidized – crucially boosts public finances in the European Union and Norway.

Energy taxation and subsidies in Europe, a study commissioned by the International Association of Oil & Gas Producers (OGP) and carried out by independent consultant NERA Economic Consulting, sheds light on the financial contributions and subsidies in the European energy sector. “Far from being subsidized, the oil and gas industry is among the largest contributors to government revenues in the energy sector,” Roland Festor, OGP’s EU Affairs Director, explained.

OGP commissioned the research to show facts about European government subsidies to energy industries. The issue is often intensely debated, with conflicting numbers and complicated methodologies.

“Reliable figures are crucial now as the European Union looks at state aid, energy costs and consumer protection policies in a bid to protect household bills, preserve industrial competitiveness and ultimately define Europe’s long-term climate and energy policy,” Mr Festor said.

The consumption of one barrel of oil generates $124 (around €90) in government revenue. This contrasts with the consumption of an equivalent amount of energy generated by renewables, which in some cases can cost tax payers more than $700 (or more than €500), the study shows.

Oil and gas contributed €433 billion to the EU and Norwegian government treasuries in the reference year 2011, the latest year for which comprehensive data was available, and received €0.6 billion, making it a net contribution of €432 billion. These numbers are in contrast to the prevailing assertion that oil and gas received billions of euros in subsidies across the EU in 2011.

The full study “Energy Taxation and Subsidies in Europe: A Report on Government Revenues, Subsidies and Support Measures for Fossil Fuels and Renewables in the EU and Norway,” can be found here.

Leave a Reply

*

FEATURED MICROSITES


Recent Drilling News

  • 23 July 2014

    Halliburton promotes Jeff Miller to President

    Halliburton has promoted Jeff Miller to President and has appointed him to the Halliburton Board of Directors effective 1 August 2014. Mr Miller is currently the...

  • 23 July 2014

    Statoil resumes production on Njord A platform

    Statoil has resumed oil and gas production on the Njord A platform in the Norwegian Sea, after a major reinforcement of the platform structure. Production had been shut down...

  • 22 July 2014

    Petrobras’ domestic oil production tops 2 million bbl/day in June

    Petrobras’ June oil production in Brazil averaged 2 million bbl/day (bpd), a 1.7% increase from May’s production of 1.9 million bpd. In addition, the production operated...

  • 22 July 2014

    Precision, Schlumberger partner to boost industrialization of North American unconventional drilling

    Precision Drilling has entered into a strategic technology and service agreement and marketing alliance with Schlumberger. Utilizing Precision’s Tier 1 drilling rigs and...

  • 22 July 2014

    Easternwell to manage delivery of onshore servicing rig for Brunei

    Australia’s Easternwell, a subsidiary of Transfield Services, has expanded internationally through an agreement with Flux O.S. SDN BHD (Flux), a Bruneian oil and gas company...

  • Read more news