Big Oil Lobbies to Keep Its Tax Breaks Off the Table in Debt Talks
Posted July 14, 2011 in Moving Beyond Oil
As debt negotiations continue in Congress, President Obama appears to be sticking to his guns on repealing the enormous tax breaks enjoyed by the oil and gas industry. The industry takes advantage of tax breaks dating back to the dawn of the oil age – the kind of fiscal encouragement intended to support nascent businesses, not consistently profitable ventures.
Getting rid of tax breaks for the multi-billion dollar oil industry is one of the few debt-reduction schemes that people can cheer about. Even George W. Bush suggested rolling back tax breaks for the oil industry in 2006. Why has Congress not managed to follow through on a popular idea that would create billions of dollars of yearly revenue for the government (and that could be sensibly plowed into the underfunded transportation program)? In part because of the efforts of The American Petroleum Institute (API), the powerful trade association that lobbies on behalf of the oil and natural gas industry.
API’s job, like that of any trade association, is to cater to the lowest common denominator – to protect lagging companies and maintain the status quo that will allow them to stay in business, no matter how outdated their business model is.
In this way, associations are even more deadly than individual companies. Under API President Jack Gerard’s leadership, for example, API no longer considers research into alternative energy a priority. The group is focused today on opening every inch of American soil and coastal waters to drilling, and ensuring that Big Oil hangs on to its precious subsidies.
API claims that losing the subsidies will put Americans’ retirement savings at risk, because many 401(k) plans hold stock in oil and gas companies. This argument is sheer nonsense. Pension funds hold stock in many blue-chip companies. Is API suggesting, as Steve Ellis of Taxpayers for Common Sense asked, that the government should make a practice of subsidizing profitable companies in order to bolster pension funds? If I may quote Joe Biden: C’mon man. Let’s get real.
API isn’t concerned about America’s future any more than they are concerned about the pension plans of those poor, hard-working teachers and police officers they mention in their ads. Their goal is to lock in immediate payoffs for their clients – oil and gas billionaires.
Retaining massive subsidies for a mature industry while slashing funding for programs that will define our future -- education, health care and transportation – is a short-sighted way to govern. What does America gain by handing over billions of taxpayer dollars to the oil and gas industry? A continued, dangerous dependence on a commodity we cannot control.
Comments are closed for this post.
Comments
Bioblogger — Jul 15 2011 10:20 AM
Without question, fossil energy solutions are starting with dirtier materials that are extracted using more environmentally dangerous processes - and both are getting more expensive. However the economic plight of regions like Ohio are real and the heralded alternative energy systems of solar and wind aren't relevant here. Without alternatives, these regions aren't socially and economically sustainable.
There are plenty of biomass resources in this region as there are in many economically depressed areas that represent sustainable, renewable resources. Best practices are leading to higher yields per acre, better protection of resources, and energy available at smaller and smaller carbon footprints as the power and fuels they produce replace fossil fuels. Bioenergy production is not only getting cleaner, it is getting cheaper and it is nurturing the development of more energy self-reliance, jobs, and community security.
I applaud NRDC articles like this one that challenge the fossil status quo. But by simultaneously attacking the early generations of biofuels and biopower production in other articles of NRDC blogs aren't you providing staying power to API and other entrenched fossil energy producers - even though they are getting demonstrably dirtier, riskier, and expensive?