In light of surging oil and gas industry profits, Members of Congress and leaders of conservation groups Oceana and the Sierra Club today urged the Joint Select Committee on Deficit Reduction to end oil industry tax breaks and subsidies. Doing so now will protect vital economic programs for hard working, ordinary Americans and veterans, including Medicare, Social Security and Defense, while reducing the federal deficit. The Joint Select Committee on Deficit Reduction, often called "the Supercommittee," is charged with issuing a formal recommendation to reduce the deficit by at least $1.5 trillion over the next ten years. Their deadline for this recommendation is November 23, 2011.
The five biggest oil companies 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. U.S. policymakers have consistently voted to continue tax breaks and subsidies for the world’s most profitable oil and gas corporations, which include Chevron (Q3 net profit was $7.83B, more than doubling last year’s Q3 figure), Royal Dutch Shell (Q3 profit was $6.98B, doubling last year’s Q3 figure) and ExxonMobil (Q3 profit was $10.3B, up 41 percent from the prior year).
The Obama Administration has proposed cutting harmful oil and gas subsidies by $4 billion per year. That proposed $4 billion represents only a fraction of oil and gas subsidies, as it excludes approximately $6 billion more in economy-wide tax breaks that favor the oil industry. In addition, the U.S. Treasury gave up an estimated $14 billion,by allowing oil and gas companies to keep royalties that should go into the Treasury.
Senator Robert Menendez (D-NJ) has been a longtime leader in the fight to close tax loopholes for big oil and to ensure they pay their fair share to help reduce the nation’s deficit. Just last month, Sen. Menendez led a letter with 13 Senate colleagues to the Super Committee urging consideration of his “Close Big Oil Tax Loopholes Act” as part of a deficit reduction compromise. The bill calls for the elimination of more than $21 billion in oil subsidies for the five largest, most profitable private oil companies in the world. The bill received a majority vote in the Senate (52-48) but did not pass, due to a Republican filibuster.
“Big Oil’s super-profits should be a target of the Supercommittee,” said Sen. Menendez. “The Supercommittee doesn’t need to look far to find $21 billion to help reduce our deficit – just ask Big Oil to give back a fraction of their super-profits by ending super-subsidies. 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?” added Menendez.
“The notion that these subsidies lower the price of gasoline is pure fantasy. Tax breaks for oil companies do not deliver $2 a gallon gas because America’s fuel prices are set by global markets. They always have been and always will be,” said Oceana CEO Andrew Sharpless.
“Ending giveaways to oil companies is a no-brainer. Oil companies should pay their fair share of taxes like the rest of us – they doggone sure have the money,” Sharpless added.
The President’s proposal would restore more than $4 billion in annual taxes to the industry, netting over $40 billion over ten years.
“The world’s big five oil companies are gouging Americans at the pump, blocking clean energy jobs and benefitting from billions in tax breaks, all while raking in $101 billion in profits this year,” said Debbie Sease, Sierra Club legislative director. “There’s no possible justification for struggling taxpayers to pay their taxes year after year while Big Oil enjoys $40 billion in subsidies. It's time for Big Oil to start paying their fair share,” Sease added.
The group calling for an immediate end to tax breaks and subsidies for the oil and gas industry included Senators Menendez (D-NJ), Boxer (D-CA), Reed (D-RI), Merkley (D-OR), and Representatives Markey (D-MA), Keating (D-MA), Blumenauer (D-OR), Moran (D-VA), Garamendi (D-CA), Holt (D-NJ), and Ribble (R-WI), along with Oceana and the Sierra Club.
Pointing to recent oil company profit statements, Oceana and many policymakers urged the Supercommittee to eliminate tax loopholes to make the oil and gas industry pay its fair share of taxes. The Supercommittee deliberated Tuesday and is expected to report to Congress in just three weeks.
Oceana is the largest international advocacy group working solely to protect the world’s oceans. Oceana wins policy victories for the oceans using science-based campaigns. Since 2001, we have protected over 1.2 million square miles of ocean and innumerable sea turtles, sharks, dolphins and other sea creatures. More than 500,000 supporters have already joined Oceana. Global in scope, Oceana has offices in North, South and Central America and Europe. To learn more, please visit www.oceana.org.
The Sierra Club is the nation's oldest and largest grassroots environmental organization, with 1.4 million members and supporters and chapters in all 50 states. Since 1892, the Sierra Club has been working to protect communities, wild places, and the planet itself. www.sierraclub.org
 Assumes oil price at $100 per barrel.