HOUSE AND SENATE EFFORTS TO REPEAL OIL SUBSIDIES FAIL IN MAY, 2011.

Eliminating oil subsidies is a first step in leveling the playing field for clean energy.

According to Friends of the Earth, “(The oil and gas industry) is set to receive at least $33 billion in handouts from taxpayers over the next five years. These companies stand to gain at least $23.2 billion from tax loopholes, $3.8 billion in royalty rollbacks, $1.6 billion in direct subsidies for research and development, and $4.3 billion through accounting gimmicks.” (www.foe.org/green-scissors) For instance, Congress passed legislation in 1995 that provided “royalty relief” at a time when oil sold for $18/barrel for leases sold from 1996 to 2000. (www.foe.org/sites/default/files/GreenScissors2010.pdf)

FOE describes specific breaks and amounts in “Green Scissors 2010.”

On May 5, 2011, House Republicans and seven Democrats voted against a Democratic motion to bring the Big Oil Welfare Repeal Act of 2011 (H.R. 1689) to the floor for consideration. (List of sponsors at http://thomas.loc.gov/cgi-bin/bdquery/D?d112:1:./temp/~bdfmZN:@@@P|/home/LegislativeData.php|.)     H.R. 1689 sought to amend the tax code to prohibit the five major oil companies from receiving oil tax and royalty breaks of $32 billion over a decade.

On May 9, Senator Menendez (D-NJ) introduced S.940, the Close Big Oil Loophole Act, targeting $21 billion in savings over a decade. The bill failed to clear the Senate on May 16. Following largely party lines, 52 voted in favor (48 Democrats), and 48 voted against (45 Republicans).

John Hoffmeister, former Shell Oil CEO, recently said Big Oil does not need subsidies in light of “sustained high oil prices,” just as President Bush had said in 2005 when oil was $55 a barrel. Prices are around $100 now. A 2011 poll by NBC/Wall Street Journal found 74% of people support removing the subsidies to reduce the deficit.

The U.S. Chamber of Commerce lobbied to preserve the subsidies. In both House and Senate, the opposition was not isolated to members from oil producing states. Interestingly, many opposing Republicans previously supported cutting oil subsidies.

Republican explanation for their May votes defies logic. Elimination of subsidies is not a tax hike, and it won’t kill jobs. The Congressional Joint Economic Committee said energy prices would not rise as a result. Studies show investment in clean energy actually creates 2-4 times more jobs than in the fossil fuel industry (2009 University of Massachusetts’ study).

The price of oil is artificially “cheap” because it does not reflect the high price of “externalities” such as air and water pollution, political repercussions of supporting repressive regimes for oil, and military interventions to protect access to oil.

Democrat plan to try again, and some Republicans who opposed the above actions have indicated they will consider removing oil subsidies as part of a broader tax reform package.

CALL YOUR MEMBERS OF CONGRESS TO INSIST OIL SUBSIDIES ARE REMOVED!

The 48 Senators who voted against ending oil subsidies are : Alexander (R-TN), Ayotte (R-NH), Barrasso (R-WY), Begich (D-AK), Blunt (R-MO), Boozman (R-AR), Brown (R-MA), Burr (R-NC), Chambliss (R-GA), Coats (R-IN), Coburn (R-OK), Cochran (R-MS), Corker (R-TN), Cornyn (R-TX), Crapo (R-ID), DeMint (R-SC), Enzi (R-WY), Graham (R-SC), Grassley (R-IA), Hatch (R-UT), Heller (R-NV), Hoeven (R-ND), Hutchison (R-TX), Inhofe (R-OK), Isakson (R-GA), Johanns (R-NE), Johnson (R-WI), Kirk (R-IL), Kyl (R-AZ), Landrieu (D-LA), Lee (R-UT), Lugar (R-IN), McCain (R-AZ), McConnell (R-KY), Moran (R-KS), Murkowski (R-AK), Nelson (D-NE), Paul (R-KY), Portman (R-OH), Risch (R-ID), Roberts (R-KS), Rubio (R-FL), Sessions (R-AL), Shelby (R-AL), Thune (R-SD), Toomey (R-PA), Vitter (R-LA), Wicker (R-MS)

The link to the House members who supported removing subsidies is noted above.

It is vitally important that you write and/or call your members of Congress today (both those who support and oppose the subsidies, in the House and Senate) and demand they end oil subsidies and encourage homegrown clean energy to address our oil addiction, national security, and climate change. Also, write OpEds and letters to the editor to your local paper. As a member of the U.S. Green Chamber of Commerce, your voice matters and is needed as a counterpoint to the opposing U.S. Chamber of Commerce.

John H. Reaves, Policy Director for the U.S. Green Chamber of Commerce

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