Wow. Our experiment is off to a great start—let's see if we can finish it off sooner than expected.
The Gulf oil disaster has created some impetus in Congress to reduce the lavish subsidies granted to oil companies to incentivize and spur domestic production. Multiple bills are under consideration that would rescind billions of dollars in tax breaks and other handouts to Big Oil. But the industry's lobbying group, the American Petroleum Institute, isn't about to let these giveaways go without a fight.
API launched television ads in ten states this week to attack what they classify as "new taxes on the oil and natural gas industry." Actually making oil companies pay their fair share like other industries, API claims, would have a "devastating effect on our jobs, economic recovery and our energy security."
A bid to cut $35 billion in tax subsidies to oil companies from Sen. Bernie Sanders (I-Vt.) lost by a vote of 35-to-61 several weeks ago, but there are several other legislative efforts underway to cut major subsidies for oil companies.
Sens. Bob Menendez (D-N.J.), Bill Nelson (D-Fla.) and Jeff Merkley (D-Ore.) have also introduced a bill that would raise more than $20 billion in the next 10 years by recouping royalties that oil companies haven't been paying to drill on public lands, barring oil companies from dodging US corporate taxes, and ending some tax breaks granted to oil. In the House, Rep. Earl Blumenauer (D-Ore.) has circulated legislation to eliminate $30 billion in tax breaks for oil companies. The Obama administration put its own plan forward well before the Gulf crisis, which would raise up to $39 billion in the next 10 years by cutting 12 tax breaks for oil, gas, and coal companies. Some manner of subsidy reform is expected to be included in an energy and oil-spill package after the July recess.
Sima J. Gandhi, a senior policy analyst at the Center for American Progress, has a good takedown of API's arguments. And it's worth noting that even the proposed cuts to subsidies would be just a fraction of what US citizens hand out to oil companies every year. Between 2002 and 2005, we spent $72.5 billion on fossil fuels between 2002 and 2008, an analysis from the Environmental Law Institute found last year. This is even more absurd when you consider that most of these oil companies really don't need a hand, given how much money they make every year. Exxon made $6.3 billion in the first quarter of this year alone; BP made $5.5 billion pre-oil disaster.
The API ads start today in Colorado, Michigan, North Carolina, North Dakota, Pennsylvania, Virginia, Maine, Missouri, Ohio, and West Virginia.