Pumping Up Big Oil

If you google “How much do oil companies earn?” or “What tax breaks does the US give oil companies?” or even “oil company profits,” it's a challenge to find one nice, clean document containing the definitive answer.

You’ll find guesses from yahoos on Yahoo and reports that are older than the tennis shoes I wore in high school and more newspaper articles than you can count, but it’s difficult to find the answers without spending hours reading and comparing and verifying and sifting through a wagonload of verbiage.

I wonder why that is.

I had heard that President Obama just urged Congress – again – to repeal the $4 billion in tax breaks we give the oil industry each year and the Weeper of the House indicated he might be willing to have a meeting about this. Then his people denied he was willing to listen to some dude who wasn’t even born here and wanted to bring socialism and Islam to the American heartland.

Lest one thinks Obama is just worried about his election prospects as the price at the pump continues to rise, he’s been talking about this for a while. In his State of the Union speech back in January, he had said, “I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don’t know if you’ve noticed, but they’re doing just fine on their own. So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.”

The GOP responded by sticking their collective finger in their collective ears and collectively whistling Broadway show tunes. Remember, this is the political party which apologized to BP in the wake of the Deepwater Horizon catastrophe last year that killed 11 men and caused five million barrels of oil to gush into the Gulf of Mexico.

In response to a Facebook status update in which I expressed gratitude for not having to pay $8 for a gallon of gas like they do in Germany, Facebook friend Cindy Sullivan pointed out that we actually pay around $15/gallon but not all at the pump. She provided a link to a report by the nonprofit International Center for Technology Assessment entitled, "The Real Price of Gasoline." Just skimming the executive summary revealed the following:

• The federal government provides the oil industry with numerous tax breaks designed to ensure that domestic companies can compete with international producers and that gasoline remains cheap for American consumers. Federal tax breaks that directly benefit oil companies include: the Percentage Depletion Allowance (a subsidy of $784 million to $1 billion per year), the Nonconventional Fuel Production Credit ($769 to $900 million), immediate expensing of exploration and development costs ($200 to $255 million), the Enhanced Oil Recovery Credit ($26.3 to 100 million), foreign tax credits ($1.11 to $3.4 billion), foreign income deferrals ($183 to $318 million), and accelerated depreciation allowances ($1.0 to $4.5 billion).

• Government support of US petroleum producers does not end with tax breaks. Program subsidies that support the extraction, production, and use of petroleum and petroleum fuel products total $38 to $114.6 billion each year.

• U.S. Defense Department spending allocated to safeguard the world’s petroleum resources total some $55 to $96.3 billion per year.

• The Strategic Petroleum Reserve, a federal government entity designed to supplement regular oil supplies in the event of disruptions due to military conflict or natural disaster, costs taxpayers an additional $5.7 billion per year.

• Environmental, health, and social costs represent the largest portion of the externalized price Americans pay for their gasoline reliance. These expenses total some $231.7 to $942.9 billion every year.

• Other external costs amount to $191.4 to $474.1 billion per year. These include: travel delays due to road congestion ($46.5 to $174.6 billion), uncompensated damages caused by car accidents ($18.3 to $77.2 billion), subsidized parking ($108.7 to $199.3 billion), and insurance losses due to automobile-related climate change ($12.9 billion).

Ha! Beat that, Germany!

We ought to stop giving billions in tax breaks to oil companies and subsidizing the petroleum industry. But we ought to stop treating corporations like people and robbing from the poor to give to the rich and busting unions and privatizing Medicaid and Medicare and allowing the nation to default on its debt and engaging in class warfare and killing people in Iraq and Afghanistan and now Libya and telling women what they can and can’t do with their own bodies too. What we ought to do and what politicians do instead are farther apart than Sarah Palin’s house and the Russian Federation.



Sources: Associated Press, thinkprogress.org, Center for American Progress Action Fund, smartmoney.com, Politico.com, International Center for Technology Assessment.