Blog Tags: Oil Subsidies
Yesterday Oceana CEO Andy Sharpless joined members of Congress and other clean energy advocates in urging an end to oil industry tax breaks and subsidies.
The five biggest oil companies – including Chevron, Shell and ExxonMobil -- took in 70 percent more profit this quarter than they did in the same quarter in 2010, and their earnings for 2011 are projected to go up by 74 percent to $132 billion. And yet U.S. policymakers have consistently voted to continue tax breaks and subsidies for these corporations.
In other words, we are essentially paying these companies to take big risks in our oceans. What’s wrong with this picture?
As Sharpless noted, ending these tax breaks will protect vital economic programs for hard working Americans and veterans, while reducing the federal deficit. “Ending giveaways to oil companies is a no-brainer,” Sharpless said. “Oil companies should pay their fair share of taxes like the rest of us – they doggone sure have the money.”
Senator Robert Menendez (D-NJ), one of the speakers at yesterday’s press conference, has been a longtime leader in the fight to close tax loopholes for Big Oil. Just last month, Sen. Menendez led a letter with 13 Senate colleagues to the The Joint Select Committee on Deficit Reduction, often called "the Supercommittee," urging consideration of his “Close Big Oil Tax Loopholes Act.” The bill calls for the elimination of more than $21 billion in oil subsidies. The bill received a majority vote in the Senate but did not pass due to a Republican filibuster.
“Isn’t it time we asked Big Oil – the folks who made $100 billion in profits so far this year – to pay their fair share?” Menendez said.
We couldn’t agree more.
The Obama Administration has proposed cutting harmful oil and gas subsidies by $4 billion per year. The President’s proposal would net over $40 billion over 10 years.
We’ll continue the fight to end these harmful subsidies and promote investment in clean energy. Thanks as always for your support and stay tuned! (In the meantime, you can check out more photos from yesterday's presser.)
Last night in his speech before the joint session of Congress, President Obama asked this important question:
“Should we keep tax loopholes for oil companies? Or should we use that money to give small business owners a tax credit when they hire new workers?”
The stakes are significant. The multi-national oil companies receive more than $4 billion in tax breaks every year from the United States, according to The New York Times.
And of course international companies like Exxon, BP, and Shell spend hundreds of millions of dollars on lobbyists and political campaigns in the United States to ensure that they keep those American tax breaks.
Earlier this year, President Obama tried to reduce the tax breaks handed out to oil multinationals, but Congress refused to consider it in this spring’s budget talks.
And all the while, oil companies continued to spend some of their record profits on perpetrating the falsehood that Americans need them to keep drilling in the American ocean and the American Arctic in order to save us money at the pump.
I’ve said it before, and I’ll repeat it. Increased domestic drilling will have little to no effect on your gas prices, because the price of oil is set on the international market. Surging international demand, or reductions in international production, has a much bigger effect on your gas prices than do slow and incremental changes in domestic production.
Moreover, when we expand domestic drilling and allow hazardous actions like BP took last year in the deep waters of the Gulf of Mexico, we take all the environmental risk at home, but share any oil finds with the international market. Does that seem smart to you?
The international oil companies want Americans to believe that if we let them drill enough, and give them big enough tax breaks, the American price of gas will drop. The facts show that’s not true.
Offering oil companies tax breaks in the hopes they’ll lower your gas price is like offering your teenager a bigger allowance in the hope they’ll take smaller portions at dinner.
Editor's note: This post originally appeared at The National Journal. If you agree with Jackie, go to the article and click “agree”!
For decades, the oil and gas industry has benefited from a long list of financial boons totaling billions of dollars each year. In an economy where we have to make tough choices about continuing important programs – whether its paying down the debt, protecting social security or providing for a national defense – we simply can’t keep letting Big Oil, possibly the biggest player in our economy, off the hook. They should have to pay taxes just like we do.
The industry is quibbling over semantic arguments about whether a tax break is a subsidy, or whether they are being singled out. In fact, the President has not singled the oil industry out. Many of the President’s proposed changes are economy-wide, and those that aren’t pertain to oil and gas industry activities that simply don’t apply to other industries. In fact, it’s the petroleum industry that has singled itself out by building a network of tax loopholes, and then gaming them in a way that allows benefits that few, if any, other industries could even imagine. And whether the funds come in a check after taxes, or as a break on taxes, the result is the same. More money in the oil industry’s pockets and less funds in the Treasury.