In the 20-year timeframe that would be great (a decarbonized economy), but short-term, it's really important that the US doesn't depend on Saudi Arabia as a sole oil producer, and that means maintaining some level of oil pumping infrastructure

SA, Russia, and Venezuela are not the international players you want to have leverage over US foreign policy. If we let a weird unexpected market rout (like covid) wipe the shale producers out entirely, we really screw ourselves into letting SA call the shots on the world stage. Cuz you know SA and Russia are NOT going to let their pumping capacity collapse.

(To be clear I'm not arguing for a bailout to prevent banks or investors from taking haircuts on the investments — those haircuts have to happen. But "letting all the jobs go" means letting the companies dissolve, vs reorganize, and that's not a good idea, IMO).

It's important to note that energy subsidies aren't inherently pro fossil fuels or anti green energy.

Their only priority is to ensure that a given percentage of energy demand is met by domestic (or closely allied) suppliers. There are both National Security and Economic reasons for this. Not only does it prevent war by insuring no enemy thinks they can quickly force a surrender by cutting off energy supplied, but it also helps guard against things such as the OPEC oil shock of the '70s.

What energy subsidies are trying to avoid is a scenario where the majority of fossil fuel is produced in the countries where it is cheapest, such as the Middle East or Russia. Such a scenario would give those countries a massive amount of economic power.

If you want energy subsidies to not go to fossil fuels, you simply need to eliminate demand for fossil fuels.

As fossil fuel demand drops, the energy subsidies assigned to them will also drop. They are only trying to maintain a domestic percentage. So cut domestic demand by 50% and fossil fuel subsidies will also drop by roughly half.