[danielharan]

An easy way to favour an industry is to allow them to write off assets faster than they're actually used up.

So while the amortization itself seems fair, many oil companies have lobbied for these types of changes, which together amount to hidden subsidies worth billions every year.

[pas]

Why does accelerated depreciation help a company? (It helps that they pay less tax initially, because they can offset more revenue, but then they are left with less expenses to offset revenue later, how does it help them? Or again the explanation is time value of money?)

Also oil wells' production curve should match the depreciation curve, no? (You can extract more initially and it drops off, especially as the pressure lowers, you then have to inject extraction fluids, CO2 or brine or whatever, crack the surrounding rocks, and eventually it gets abandoned as a production well.)

[danielharan]

Yeah, it's time value of money. There are many kinds of subsidies, including direct to consumer. If you're interested, the IEA's old reports mentioned here would be the best place to start (many countries have since cut their subsidies, so there's progress):

https://en.wikipedia.org/wiki/Energy_subsidies#IEA_position_...