Congress, put country first: End oil subsidies
By John H. Reaves
midnight, June 26, 2011
Reprinted from the San Diego Union Tribune
Finally, here is something Democrats, Republicans, Tea Partiers, libertarians and independents should all be able to agree on: Eliminate oil subsidies.
Our country is more than $14 trillion in debt and crawling from recession. “Big Oil” continues to rake in supersize profits. Media claim Exxon Mobil, with profits of $45.2 billion, and Chevron, with $19 billion, reported paying little or no taxes to the IRS in 2010 (which they dispute). The Big Five posted profits of more than $900 billion last decade.
So why did their execs whine so loudly when Democrats sought to remove some tax benefits? More importantly, why did so many Republicans kill two efforts?
In April, Speaker John Boehner said he would consider cutting oil subsidies. But on May 5, House Republicans and seven Democrats voted against a Democratic motion to end oil tax and royalty breaks of $12 billion over a decade. House members who voted against removing the subsidies received $8.7 million in campaign contributions from oil and gas companies in 2010, according to the Center for Responsive Politics. Those in favor received $1.2 million. Big contributions sway votes.
On May 9, Sen. Robert Menendez, D-N.J., introduced 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-line votes. Many opposing Republicans previously supported cutting oil subsidies. Why the “correction”?
On May 12, the Senate Finance Committee questioned executives from Big Oil. ConocoPhillps’ James Mulva bristled, calling the cuts “un-American,” while Exxon Mobil’s Rex Tillerson criticized the bill as “misinformed and discriminatory.”
Yet John Hoffmeister, former Shell Oil CEO, recently said Big Oil does not need subsidies in light of “sustained high oil prices,” just as President George W. 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 percent of people support removing the subsidies to reduce the deficit.
Where is America’s outrage over most Republicans’ and some Democrats’ defense of Big Oil welfare? It is indisputable our country’s security and economic health are acutely vulnerable because of our oil addiction.
Republicans’ 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 won’t rise as a result. Studies show investment in clean energy actually creates two to four times more jobs than in the fossil fuel industry.
Moreover, the price of oil is artificially cheap because it does not reflect the high price of factors such as air and water pollution, political repercussions of supporting repressive regimes for oil, and military interventions to protect access to oil.
Congress must put this great country first. End oil subsidies now and encourage homegrown clean energy to address our oil addiction and climate change.
Reaves is a business and environmental lawyer based in San Diego and a director with Citizens Climate Lobby.