Great Idea: $40 Billion in Cuts to Wasteful Big Oil Subsidies
Several members of the U.S. House of Representatives are promoting a plan to cut $40 billion in “wasteful big oil subsidies” (see press release below). As we’ve written about previously, getting dirty energy companies “Off the Dole” is a no-brainer, for a wide variety of reasons.
How bad are these fossil fuel subsidies? So bad that the chief economist at the International Energy Administration has named fossil fuel subsidies as one of the biggest impediments to global economic recovery – “the appendicitis of the global energy system which needs to be removed for a healthy, sustainable development future.” Time for an emergency appendectomy!
Washington, D.C. – Today Representative Jim Moran, Northern Virginia Democrat, joined Representatives Earl Blumenauer, Ed Markey, John Conyers, Lois Capps, Peter Welch and David Price to introduce legislation to cut the budget by ending roughly $40 billion over five years in wasteful subsidies to the oil industry. The “Ending Big Oil Tax Subsidies Act” (H.R. 601) eliminates subsidies that have worsened the deficit, weakened our energy security, undermined renewable energy, and damaged the environment.”To move forward on a path to clean energy, we need to stop propping up the dirty energy industries of the past. This legislation will end the tax breaks to big oil companies and save nearly $40 billion over the next five years,” said Moran. “Most of these subsidies and tax benefits were granted during a time when oil was selling for less than $30 per barrel and our domestic producers needed assistance to compete with foreign industries. With oil now selling for three times as much, these subsidies are no longer justified.”
“The oil industry is one of the most profitable industries in the world and does not need help from the government,” said Blumenauer, primary sponsor of the legislation. “With Congress already discussing painful budget cuts that will require American families to make sacrifices, it is only fair that we also stop the handouts to our richest oil companies. “It makes no sense that we are borrowing money from China to subsidize the most profitable industry in the world and corporations like ExxonMobil that earn billions every year. It’s time for us to have a serious, rational discussion about cutting the budget.”Over the past decade, the big five oil companies-BP, Chevron, ConocoPhillips, ExxonMobil, and Shell-made a total profit of nearly $1 trillion.
The “Ending Big Oil Tax Subsidies Act” would bring to an end ten tax credits and deductions big oil companies currently receive, including the following: deductions for drilling costs such as wages and supplies; deductions for the production of oil and gas; and deductions for expenses related to the cost of tertiary injectants.
For the Representatives’ complete fact sheet on the “Ending Big Oil Tax Subsidies Act,” please click here.