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Subsidize my love

By Kate Sheppard

Our country's deference to the oil industry has become very clear in the past month. Most Americans now realize that neither BP nor the government was adequately prepared for a disaster like the one we've seen unfold in the Gulf of Mexico. They also now see that years of cozy relations (and in some cases, I really do mean "relations") between the oil industry and the federal agency intended to regulate it have allowed oil companies to operate with very little oversight. But there should probably be more scrutiny of the litany of handouts we continue to give to oil and other fossil fuels, in the form of both direct spending and foregone revenues from tax breaks. In addition to destroying the Gulf of Mexico, big oil also enjoys a number of subsidies courtesy of the American taxpayer.

Three Democratic senators this week introduced a bill that would close a number of tax loopholes oil companies currently enjoy, which the senators estimate would raise more than $20 billion in the next 10 years. The bill, from Bob Menendez (D-N.J.), Bill Nelson (D-Fla.) and Jeff Merkley (D-Ore.), includes recouping royalties that oil companies haven't been paying to drill on public lands, barring oil companies from dodging U.S. corporate taxes, and ending some tax breaks granted to oil.

"There is no good reason why some of the most profitable corporations in the world should be able to skip out on paying taxes and contributing to the betterment of our communities," Merkley said Tuesday.

It's an idea the administration should both endorse and push Congress to act on. Obama pitched the idea of cutting fossil fuel subsidies at the Group of 20 meeting last fall (agreement on that topic was one of the few highlights at that summit). Cutting subsidies was also one of the more aggressive elements of Obama's 2011 budget, in which he called for the elimination of 12 tax breaks for oil, gas and coal companies. The administration estimates that will raise up to $39 billion in the next 10 years.

Even that would only be a fraction of what we hand over to fossil fuels every year. The government spent $72.5 billion on fossil fuels between 2002 and 2008, an analysis from the Environmental Law Institute found last year. The government directly spent $16.3 billion on petroleum, natural gas, and coal products, and gave the industry another $53.9 billion in the form of tax breaks. In the same period, it spent just $29 billion on renewables (and if you subtract the subsidies for corn ethanol, an alternative fuel of questionable environmental benefit, from that figure, the government spent just $12.2 billion on renewables. Shifting subsidies away from oil and other fossil fuels should be an obvious place to start reforming our energy system.

Kate Sheppard covers energy and environmental politics inMother Jones's Washington bureau. For more of her stories, see here, and you can follow her on Twitter here.

By Washington Post editor  |  May 26, 2010; 9:22 AM ET
 
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Comments

While I'm a firm believer in the credo that we should drill here, drill now, and drill often (a concept that does not have to be limited to oil exploration, by the way), the tax loopholes enjoyed by the major oil companies--specifically in our country--boggle the mind. Am I to understand that Exxon paid billions in corporate taxes--just none to America? They don't do business here? What? How does that work?Of course, I'm a bit of a libertarian on this issue. Welfare shouldn't go to people who don't need it, and in the case of companies, should not perpetually go to companies who could not exist without it. Ergo: no corporate welfare. Con-Agra does not need tax payer money. Exxon/Mobil does not need tax-payer money. Monsanto does not need tax-payer money. And so on.Imma kinda liking Obama on energy right now. Drill, baby, drill--but spend an extra $500k or million to make sure this sort of disaster doesn't happen again. Oh, and also, if you're doing business here, you're paying taxes here. And the price of leases need to be more reflective of the history of environmental and economic damage your parsimonious engineering (penny wise, pound foolish, much?) has inflicted.
Alas, I still have to vote against Obama in 2012. Unless something really changes. But I'm liking him on the offshore drilling.

Posted by: Kevin_Willis | May 26, 2010 9:47 AM | Report abuse

kevin

i read your posts everyday. sometimes, i dont understand them, but i try.
how can you vote against barack obama in the next election?
how can you cast a vote that would in any way, strengthen the tea party movement, rand paul, rush limbaugh, sarah palin....for a party that casts votes against raising the liability cap on british petroleum? that tries to block important and necessary legislation at every turn.
i honestly dont understand it. arent you scared at this point, as someone who could possibly vote against obama, of what the republican party represents, at this point in time?

Posted by: jkaren | May 26, 2010 10:14 AM | Report abuse

jkaren,

if the election were held today I'd vote for Obama vs any Republican candidate that even smells of being viable today but again the election's not being held today.

My question would be for you is "How can you vote for ANYONE for an election that is more than two years away?"

Posted by: visionbrkr | May 26, 2010 10:26 AM | Report abuse

Here is a question for the better informed: how much of the oil obtained from within U.S. (on and off-shore) actually remains in U.S. (or is sold to U.S. for refining)? Tax policy may be influenced by that answer. thanks.

Posted by: arbella | May 26, 2010 10:26 AM | Report abuse

Kevin - America needs more Republicans like you. Kudos.

But "Drill Here, etc." really? I realize that in the short term oil is a neccessary evil, but there are some places where it just isn't safe to drill.

I've heard over and over that we know more about the moon than we do about the ocean. Given all that we don't know about the ocean I don't think we should be drilling in areas we can't reach and know little about. Known unknowns, dontcha know?

Posted by: nisleib | May 26, 2010 10:35 AM | Report abuse

My question would be for you is "How can you vote for ANYONE for an election that is more than two years away?"

i dont plan so far in advance! i am not a young person!!

but over these years, i have great trust and love for barack obama. because i think he is a genuinely good person, and though he is human, and makes mistakes, like everyone....i believe he is deeply introspective, brilliant, has good intentions, humility and high character.
since there are few, if any other people on the political horizon that i feel that way about, i am quite certain that i am going to work as hard for him in the next election, as i did in the last one.
i am so sorry that this gulf oil disaster has fallen on his watch, especially since the last administration was awash in oil, and they will probably even benefit financially from the cleanup effort.
barack obama has been a bright spot in my life, and who he is as a human being, gives me hope. i cannot believe the obstacles he has had to face, since the beginning of his journey toward the presidency.
i wish he would have been more connected with the american people during this disaster, but i also dont know how a human being can cope with so much, all at once. my heart really goes out to him.
for me, character matters. and i in the longrun, when you follow a path of goodness, it will take you to a higher place.
that is the direction i hope for, for this country. so that is my thinking at this time.

Posted by: jkaren | May 26, 2010 10:48 AM | Report abuse

My question would be for you is "How can you vote for ANYONE for an election that is more than two years away?"

i dont plan so far in advance! i am not a young person!!

but over these years, i have great trust and love for barack obama. because i think he is a genuinely good person, and though he is human, and makes mistakes, like everyone....i believe he is deeply introspective, brilliant, has good intentions, humility and high character.
since there are few, if any other people on the political horizon that i feel that way about, i am quite certain that i am going to work as hard for him in the next election, as i did in the last one.
i am so sorry that this gulf oil disaster has fallen on his watch, especially since the last administration was awash in oil, and they will probably even benefit financially from the cleanup effort.
barack obama has been a bright spot in my life, and who he is as a human being, gives me hope. i cannot believe the obstacles he has had to face, since the beginning of his journey toward the presidency.
i wish he would have been more connected with the american people during this disaster, but i also dont know how a human being can cope with so much, all at once. my heart really goes out to him.
for me, character matters. and i in the longrun, when you follow a path of goodness, it will take you to a higher place.
that is the direction i hope for, for this country. so that is my thinking at this time.

Posted by: jkaren | May 26, 2010 10:48 AM | Report abuse

heard at the beginning of the Dylan Ratigan show yesterday a former oil exec who basically said we shouldn't be out there but we should be closer to shore but American's don't want to have offshore oil exploration obstruct their views of the coastline. If that is the case and that's one of the reasons they're so far out there and drilling so deep then some of the blame falls on us as well. We need to realize through the pros and the cons we all have some culpability here. There's a lot to still get to here and I'm sure we'll be seeing enough Senate hearings on the topic to nauseate us all.

Posted by: visionbrkr | May 26, 2010 10:51 AM | Report abuse

change we can believe in.

i think that every change that obama has tried to implement, has been met with battlefields of resistance.
congress has become a battlefield, the likes of which i have never seen in my lifetime.
aside from the nixon/agnew years, i have never seen such hatefulness in government. i will never forget boehner speaking from the floor on the night of the health care reform bill.
or the antics of cantor....or the things that sarah palin has said.
i cant imagine the toll all of this must be taking on barack obama.
i am praying for him, and hope that we all are, to have the strength and courage to handle all that is falling on his plate.
one would need to be super-human to cope with all of this.
i cant sleep at night, thinking about everything. i wonder what it is like for him.

and now, this oil spill.

Posted by: jkaren | May 26, 2010 11:00 AM | Report abuse

"Shifting subsidies away from oil and other fossil fuels should be an obvious place to start reforming our energy system."

Yes. Yes it would. Thanks for the handy information.

Personally, I'm baffled that some people don't understand how we subsidize this stuff. But then, I guess general lack of information and awareness is exactly how the current Republican Party came into existence. I always figured they knew but just didn't care. Not true for all of them, I guess. Spill, baby, spill!

Posted by: slag | May 26, 2010 11:09 AM | Report abuse

jkaren,


with your passion for it and for President Obama I'm fairly certain you'll be around come 2012 ;-)

Posted by: visionbrkr | May 26, 2010 11:45 AM | Report abuse

jkaren: "how can you vote against barack obama in the next election?"

By pulling the lever for the Republican. Frankly, I think the power of incumbency, and Obama's charisma, trumps any Republican who will get the ticket, and Obama will win. I just want Obama to know that I'm watching him--just in case he decided to go all Communist on us or something.

"how can you cast a vote that would in any way, strengthen the tea party movement, rand paul, rush limbaugh, sarah palin..."

I kind of like the Tea Party movement. And, frankly, I think the opposition and much of the MSM unfairly characterizes them (you probably disagree, and thats fine, BTW, I'm not out to convince anybody of that point, that's just how it looks to me). I don't go to the tea parties, BTW, but I think the idea. As Thomas Jefferson said, a little rebellion now and again is a good thing. And, frankly, what's good for the geese is good for the gander.

And I really like Sarah Palin, in case I haven't made that clear. I might have skipped voting for McLame, had Palin not been on the ticket.

"that tries to block important and necessary legislation at every turn."

Actually, often--as in the case of HCR--I'm sympathetic with the why, or the actual desire, to block the legislation. I'm just not sympathetic with the tactics. But . . . there will be payback. There always is. I'm kind of interested to sea how, after being so negative and obstructionist, the Republicans would attempt to positively govern.

Am I scared of the Republican party coming into power? No. Despite everything, I don't think one party or one ideology is responsible for every bad thing that happens. I also don't think the Republicans will be very successful once in power, and will at best succeed in keeping the Democrats from advancing super progressive legislation. Which doesn't bother me. Again, I agree with Thomas Jefferson: the government that governs least, governs best. It's unfortunate it takes gridlock in this day and age to get the government to "govern least", but there you are.

Limiting the caps of BPs liability doesn't bother me so much as the institutionalized corruption that clearly transcends party changes of the supervision of the major oil companies and their deepwater drilling projects. If I was convinced the Democrats were up to fixing that, I might be a little more swayed. But I'm just not.

Posted by: Kevin_Willis | May 26, 2010 12:18 PM | Report abuse

"heard at the beginning of the Dylan Ratigan show yesterday a former oil exec who basically said we shouldn't be out there but we should be closer to shore but American's don't want to have offshore oil exploration obstruct their views of the coastline"

No doubt true. I stayed on a beach with a fine view of an oil derrick once, and while I kind of liked it--I like seeing the edifices of man's accomplishment--I can totally see how it spoiled the view. If I wasn't just staying a week, but was purchasing an expensive piece of beachfront property, where, in good times, what would be a $250k house elsewhere goes for a million+, I'd be highly opposed to any oil derricks within 20 miles of the coastline, as well.

And deepwater drilling is not the only problem here. There were tertiary safety measures that could have been taken that a parsimonious BP determined were too expensive. Drill in haste, repent at leisure.

Posted by: Kevin_Willis | May 26, 2010 12:23 PM | Report abuse

"My question would be for you is "How can you vote for ANYONE for an election that is more than two years away?"

Well, it was a theoretical proposition. Obviously, I have to wait for the election, but there has never been an election cycle where an overabundance of harsh judgements upon my redneck brethren has not convinced me that the Democrats would prefer not to have the tainted vote of an ignorant Southern redneck such as myself. So I oblige them. Per Slag: "But then, I guess general lack of information and awareness is exactly how the current Republican Party came into existence."

They can do just fine without my vote. They didn't want it in 2008, they don't want it in 2010, and they aren't going to want it in 2012.

Posted by: Kevin_Willis | May 26, 2010 12:27 PM | Report abuse

nsleib: "But 'Drill Here, etc. really? I realize that in the short term oil is a neccessary evil, but there are some places where it just isn't safe to drill."

Well, drill someplace reasonably safe, of course. And I'm a firm believer in a high degree of safety standards. Deepwater drilling is difficult and dangerous, but it's difficult to believe that, during the construction of the well, there was nothing that could have been done to add an additional level of safety. Indeed, when "exploring the unknown" 3rd, 4th and 5th level backups are a logical necessity.

"America needs more Republicans like you."

You're just saying that because I think the Republicans really should be cooperating more with the Democrats, or at least using obstructionism to craft legislation (arguably, the minority party can advance a more ideological favorable piece of legislation than the majority party, if they are serious about compromise and getting a piece of legislation, rather than just obstructing in order to plan the next election campaign). I'm not down with the "party of 'no'" thing, or the hyperbole.

But I don't support reckless or dangerous drilling. But I think the BP spill is not a product of a fossil-fuel centric energy philosophy ("drill, baby, drill"), but of gross negligence on the part of BP, indicating that they must be regulated more rigorously regarding the construction of deepwater rigs. In fact, every oil company would need to be so regulated. Got a problem with it, Exxon/Mobil? Go talk to BP.

Irrespective of liability caps, the cost of this to BP is going to be humongous, potentially bankrupting. The cost of putting on 4th and 5th level backup system to automatically "plug the leak" on every oil rig they've ever built will be cheaper than the cost of this one leak to them. And no one is going to be deeply sympathetic to them, should they go bankrupt. "Sorry about all the layoffs and whatnot, BP people, but you're workin' for a company that really shart the bed."

Posted by: Kevin_Willis | May 26, 2010 12:40 PM | Report abuse

No doubt these companies gained the financial status that they have from government subsidies. We have a deficit of monumental proportions. Stifle the subsidies and close the loopholes. This is not the time for giveaways.

Posted by: sober1 | May 26, 2010 1:23 PM | Report abuse

"But I don't support reckless or dangerous drilling. But I think the BP spill is not a product of a fossil-fuel centric energy philosophy ("drill, baby, drill"), but of gross negligence on the part of BP, indicating that they must be regulated more rigorously regarding the construction of deepwater rigs."


Straw man alert: Kevin_Willis does NOT, I repeat NOT! support dangerous or reckless drilling.

Kevin_Willis persists in the philosopy of "drill, baby, drill" and assures us it can be done safely provided that the "nanny state" insists upon more safety devices and tighter regulations. I don't recall Mr. Willis calling for such increased regulation at any time before May 2010, but perhaps I am forgetting.

Here's the lesson. There is no way to know with certainty, no matter how many safety devices or procedures are in place, that a deepwater drill rig is 100% "safe." And what is painfully obvious is that when there is a failure, no method no exists to immediately stop the leaking oil. So the consequence of a failure is certain: environmental disaster.

The activity is inherently risky, with catastrophic results. The amount of oil that these wells add to the world supply is insignificant, especially when balanced against the risk. Therefore, the activity should be stopped.

Kevin and his hero Sarah Palin can go and work on their super-duper safety devices AND stop-leak strategies and then come back and argue to the Gulf Coast shrimpers that they have figured out ways to make oil wells a mile deep absolutely safe. Unless and until we get a workable Palin-Willis safety AND viable leak stopping technology in place, the risk is simply intolerable.

Posted by: Patrick_M | May 26, 2010 1:47 PM | Report abuse

p.s.

typo alert: meant to say "...no method now exists..."

& agree that there must be no further public subsidies for the exploitation of publicly owned resources like undersea oil.

& agree that there is no good reason to cap liability -- caps are a subsidy for negligence.

& also agree with a very smart observation someone else made yesterday on another thread:

The US government buys oil all the time and stores it in a strategic reserve. Stop drilling, put the oil we would otherwise buy back on to the world market to increase supply and lower prices, and treat the oil fields underneath the Gulf as our "strategic reserve."

Posted by: Patrick_M | May 26, 2010 2:01 PM | Report abuse

"drill baby drill" is synonomous with "let's exhaust our own supplies first, instead of using everyone else's and while we're at it let's work to minimize the incentives towards transitioning to clean and sustainable energy"

Posted by: Lomillialor | May 26, 2010 2:55 PM | Report abuse

*But "Drill Here, etc." really?*

The explanation is that he's a nihilist who likes to annoy people for the purposes of his own entertainment. There's not much more to it. There are claims that Kevin is "a different kind of conservative." The truth is he's much like most conservatives: picking what he says on the basis of what he thinks "will piss off liberals the most." He's just a jollyer, less obviously angry/malicious version.

Posted by: constans | May 26, 2010 3:32 PM | Report abuse

A great report:

http://www.msnbc.msn.com/id/26315908/#37368377

30 years ago. Blowout preventer fails on a well in the Gulf, exact same strategies used to stop the leak (booms, dispersants, containment domes, top kill, junk shot), all fail, 9 months elapse until the leak is finally stopped with a relief well. That leak occurred a mere 200 feet under the surface of the water.

30 years later, precisely the same crude improvised solutions, no improvement at all in safety, preparedness, or solutions, the only advancements in three decades are to drive the same problem a full mile underwater.

Amazing how America's ongoing mindless deference to corporate greed makes idiots of us all.

Posted by: Patrick_M | May 27, 2010 2:17 AM | Report abuse

"The explanation is that he's a nihilist who likes to annoy people for the purposes of his own entertainment."

Bang! You got me. You're good, Constans. You're good. A worthy Bond to my Blofeld.

"There's not much more to it. There are claims that Kevin is "a different kind of conservative."

Who claims that? I've made the news?

"The truth is he's much like most conservatives: picking what he says on the basis of what he thinks 'will piss off liberals the most.' He's just a jollyer, less obviously angry/malicious version."

You put that bit in about tickin' off liberals like it's a quote. Did I say that?

Posted by: Kevin_Willis | May 27, 2010 9:06 AM | Report abuse

"...heard at the beginning of the Dylan Ratigan show yesterday a former oil exec who basically said we shouldn't be out there but we should be closer to shore but American's don't want to have offshore oil exploration obstruct their views of the coastline."

---------
That oil exec was spinning, Vision. Drilling close inshore wasn't banned because some preppies thought they spoil the view, but because oil spills from such operations devastated coastlines before.

As we can now see, contrary to oil industry assertions about safety and environmental protection, deep-water drilling far offshore is not a solution to that problem... but, in effect, blaming this catastrophe on environmental regulations (as that oil industry mouthpiece was trying to do) is perverse.... its British Petroleum saying "See what you've made me do now?"

Posted by: Observer44 | May 27, 2010 11:58 AM | Report abuse

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