Oil Industry Subsidies
Whose oil is it under the ground? Who “owns” that oil? In Alaska they decided the oil belongs to the People of the state and that the People will benefit if it is extracted. When the oil was discovered they created as part of their Constitution to establish the Alaska Permanent Fund, which collects at least 25% of the proceeds from companies that drill, and use that money for the People of the state for current and all future generations. This means the fund is set up so that after the oil is gone it will continue to benefit the People of Alaska. The fund pays a dividend to Alaska residents each year. They don’t pay taxes, their resources are managed so they get a check, $3,269 per person in 2008, $1,305 in 2009.
That’s Alaska. Under President Bush’s management, our country’s resources were treated very differently,
New projections, buried in the Interior Department’s just-published budget plan, anticipate that the government will let companies pump about $65 billion worth of oil and natural gas from federal territory over the next five years without paying any royalties to the government.
Now, a story in the NY Times today, As Oil Industry Fights a Tax, It Reaps Billions From Subsidies,
When the Deepwater Horizon drilling platform set off the worst oil spill at sea in American history, it was flying the flag of the Marshall Islands. Registering there allowed the rig’s owner to significantly reduce its American taxes.
. . . At the same time, BP was reaping sizable tax benefits from leasing the rig. According to a letter sent in June to the Senate Finance Committee, the company used a tax break for the oil industry to write off 70 percent of the rent for Deepwater Horizon — a deduction of more than $225,000 a day since the lease began.
It isn’t just the little tax breaks here and there, it’s the whole thing,
… an examination of the American tax code indicates that oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process.
According to the most recent study by the Congressional Budget Office, released in 2005, capital investments like oil field leases and drilling equipment are taxed at an effective rate of 9 percent, significantly lower than the overall rate of 25 percent for businesses in general and lower than virtually any other industry.
It isn’t “anti-business” to ask that these huge monopolistic corporations pay their fair share, it is about fairness and giving other businesses a chance. Imagine trying to compete with this rigged system, if you are an alternative energy startup.
There is much more at the link, and a discussion of the various tax breaks and other government assistance given to giant oil companies.
It isn’t just that we’re letting these companies take public resources without compensating We, the People for it. It isn’t just that they leave behind terrible externalized costs like pollution, climate change, spill cleanups, etc. These companies are also polluting science and our democracy. Here is what I mean:
Who’s behind a multi-million dollar campaign to seed doubt about climate change? It’s not just Exxon and Chevron—it’s also Koch Industries, an oil and gas giant that most people have never heard of, according to a new report from Greenpeace. Koch’s extensive funding of anti-climate work makes it the “financial kingpin of climate science denial and clean energy opposition,” says Greenpeace.
ExxonMobil is still funding groups that deny climate change, despite claiming last year that it had stopped doing so.
And not just climate denial. Oil companies have joined tobacco companies and Wall Street funding the right in general. Under Bush it may have even had government help, not just tax breaks.
We, the People are supposed to be in charge of our resources, our laws, and through those laws even in charge of the companies that operate in our country.