Big oil gets return on its investment
The Journal Standard Online
Big oil gets return on its investment
The issue: Energy bill giveaways
Our view: This legislation is about profits not alternatives to oil dependency.
In recent years, there's been a bipartisan consensus that America needs to use less oil if we are to ever stop the seemingly endless cycle of our economy and national security being threatened by everything from rogue regimes and Saudi monarchs to natural disasters and political coups that routinely disrupt the oil supply and drive up prices.
Yet in the massive energy bill moving through Congress this week, the Senate rejected a provision that required a modest reduction of oil consumption by one million barrels per day by 2015. That was a conservative goal, but an important step toward making our security and economy less vulnerable.
Meanwhile, the energy industry - flush with billions in profits from soaring gas prices - gets $1.5 billion in tax breaks plus royalty relief for certain deep-well drilling. It also includes more than $8.5 billion in tax incentives and billions of dollars more in loan guarantees and other subsidies for the electricity, coal, nuclear, natural gas and oil industries.
Call it a return on investment for well-heeled oilmen: According to Bloomberg news, big oil and utility firms such as Texas-based Exxon Mobil Corp. spent $367 million over the last two years to get the current energy bill through Congress.
"This energy bill is filled to the brim with massive giveaways for mega-rich energy companies," is how Jill Lancelot, president of Taxpayers for Common Sense, put it.
What does she mean by mega-rich? Over the past three years, the top 10 major public oil companies have sold some $1.5 trillion worth of crude, pocketing an obscene $125 billion in profit.
By contrast, efficiency and conservation programs would get a paltry $1.3 billion of the more than $14.1 billion in total tax breaks over 10 years. And about $3 billion in tax breaks would go for renewable energy sources, mostly to subsidize wind energy. With gas prices at record highs and going higher, there isn't even a half-baked attempt to encourage automakers to boost fuel efficiency
The energy policy isn't totally without merit: Thanks to a late addition by U.S. Rep. Dennis Hastert of Illinois, the bill requires oil refiners to double their use of ethanol, mostly from corn, to 7.5 billion gallons a year by 2012. That should help farmers and, in some small measure, decrease overall oil demand.
Still critics, including many conservatives, maintain it's the kind of profit-motivated legislation they expected with a Texas oil man in the White House who has a former oil services company president, Dick Cheney, by his side.
Bush and Cheney could have blunted those accusations by simply asking Congress to consider the long-range consequences of gluttonous oil consumption. For an administration and Congress that likes to change the subject to terrorism and security at every opportunity, turning a blind eye toward the strategic implications of oil consumption seems, at best, wholly inconsistent and reckless.
But then again, how many millionaire Congressman worry about paying an extra $10 to fill up the gas tank, and how many of them have to worry about dying to protect oil reserves in Iraq or Iran?
Big oil gets return on its investment
The issue: Energy bill giveaways
Our view: This legislation is about profits not alternatives to oil dependency.
In recent years, there's been a bipartisan consensus that America needs to use less oil if we are to ever stop the seemingly endless cycle of our economy and national security being threatened by everything from rogue regimes and Saudi monarchs to natural disasters and political coups that routinely disrupt the oil supply and drive up prices.
Yet in the massive energy bill moving through Congress this week, the Senate rejected a provision that required a modest reduction of oil consumption by one million barrels per day by 2015. That was a conservative goal, but an important step toward making our security and economy less vulnerable.
Meanwhile, the energy industry - flush with billions in profits from soaring gas prices - gets $1.5 billion in tax breaks plus royalty relief for certain deep-well drilling. It also includes more than $8.5 billion in tax incentives and billions of dollars more in loan guarantees and other subsidies for the electricity, coal, nuclear, natural gas and oil industries.
Call it a return on investment for well-heeled oilmen: According to Bloomberg news, big oil and utility firms such as Texas-based Exxon Mobil Corp. spent $367 million over the last two years to get the current energy bill through Congress.
"This energy bill is filled to the brim with massive giveaways for mega-rich energy companies," is how Jill Lancelot, president of Taxpayers for Common Sense, put it.
What does she mean by mega-rich? Over the past three years, the top 10 major public oil companies have sold some $1.5 trillion worth of crude, pocketing an obscene $125 billion in profit.
By contrast, efficiency and conservation programs would get a paltry $1.3 billion of the more than $14.1 billion in total tax breaks over 10 years. And about $3 billion in tax breaks would go for renewable energy sources, mostly to subsidize wind energy. With gas prices at record highs and going higher, there isn't even a half-baked attempt to encourage automakers to boost fuel efficiency
The energy policy isn't totally without merit: Thanks to a late addition by U.S. Rep. Dennis Hastert of Illinois, the bill requires oil refiners to double their use of ethanol, mostly from corn, to 7.5 billion gallons a year by 2012. That should help farmers and, in some small measure, decrease overall oil demand.
Still critics, including many conservatives, maintain it's the kind of profit-motivated legislation they expected with a Texas oil man in the White House who has a former oil services company president, Dick Cheney, by his side.
Bush and Cheney could have blunted those accusations by simply asking Congress to consider the long-range consequences of gluttonous oil consumption. For an administration and Congress that likes to change the subject to terrorism and security at every opportunity, turning a blind eye toward the strategic implications of oil consumption seems, at best, wholly inconsistent and reckless.
But then again, how many millionaire Congressman worry about paying an extra $10 to fill up the gas tank, and how many of them have to worry about dying to protect oil reserves in Iraq or Iran?
posted by Marcel at 2:04 PM
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