CBO – “The federal government provides financial support for the development, production, and use of fuels and energy technologies both through tax preferences and through spending programs administered by the Department of Energy (DOE). Policymakers have provided that support with several goals in mind, including increasing domestic energy production, reducing greenhouse gas emissions, and encouraging research that might benefit society but that would not be profitable for private firms to undertake without government funding. In fiscal year 2015, tax preferences provided the bulk of federal support for energy development, production, and use. Whereas tax preferences are estimated to have resulted in $15.8 billion in forgone revenues, lawmakers appropriated funds equal to about one-third of that amount—$5.4 billion—for DOE to fund the relevant spending programs. How Does the Federal Government Support the Development, Production, and Use of Fuels and Energy Technologies? One way in which federal support is provided is through tax preferences—special provisions of tax law that reduce tax liabilities for certain activities, entities, or groups of people—for both producers and users of certain fuels and energy technologies. Preferences aimed at producers increase the profitability of investing in a particular technology (tax credits for generators that produce electricity from wind, for example) or lower the cost of producing certain fuels (depletion allowances for producing oil and natural gas, for example). Preferences aimed at users lower their after-tax cost of purchasing certain products; for instance, tax credits subsidize homeowners’ investments in energy-efficient windows. Federal assistance is also provided through DOE in the form of funding for basic research and technology development. In particular, DOE funds research that furthers the understanding of the basic science underlying energy or that supports the development of new energy technologies. It provides funding for universities and government laboratories, demonstration projects, and loans or loan guarantees for energy technologies. Other federal programs (both within and outside DOE) affect energy markets and the supply of energy resources; for example, the government’s leasing of federal lands for oil production boosts the supply of oil. This report, however, examines only federal spending that encourages either basic research or the development of new energy technologies…”