Beginning of The End for Big Oil’s Billion Dollar Subsidies?

Tue, 2012-03-27 11:48Farron Cousins
Farron Cousins's picture

Beginning of The End for Big Oil’s Billion Dollar Subsidies?

Democratic Senator Bob Menendez (N.J.) has introduced legislation in the U.S. Senate to kill, once and for all, the billions of dollars worth of subsidies that are flowing from the federal government to the oil industry.

Under Menendez’s proposal, the $4 billion annual corporate welfare handed out to oil companies would instead be used to pay down the federal deficit and be re-invested into renewable energy technology.

Given the Republicans’ history of fighting for the oil industry and their subsidies, you would expect this bill to be dead on arrival. However, in an odd combination of arrogance and ignorance, Senate Republicans actually sided with Democrats in a vote to move the bill onto the floor for debate.

Republicans currently believe that any issue involving gas and oil is a home run for their party, so they’re banking on the issue actually helping them out, politically. Senate Minority Leader Mitch McConnell made the following statement about the issue:
  

“We’re going to use this opportunity to explain how out of touch Democrats are on high gas prices, and put a spotlight on the common-sense ideas Republicans have been urging for years – ideas that reflect our genuine commitment to the kind of all-of-the-above approach the President claims to support but doesn’t.”
 

McConnell’s comment demonstrates both the arrogance and ignorance of the Republican Party on the issue of gas prices.

While it is true that American citizens are upset over the high price of gasoline and many have had to make lifestyle changes in order to accommodate the squeeze at the pump, their anger is not being directed at the Democratic Party. Polls have consistently shown over the last year that American citizens place the blame for gas prices on the shoulders of both the oil industry and oil speculators, not the President.

McConnell’s statement also shows that he is unaware that almost 60% of the American public wants to end the $4 billion a year giveaways going to the oil industry.

But the Republicans are not the only ones hoping to capitalize on the price of gasoline. Democrats are attempting to paint the Republican Party as opponents of progress and innovation, something that polls show Americans already believe. A memo from the Center for American Progress (CAP) recently laid out the talking points for Democrats:
  

American Oil for American Soil. Require oil companies to use the oil that is produced in the United States from public lands and offshore to meet energy needs here at home, and stop oil companies from exporting oil from our public lands and waters to overseas markets. (60 percent support)

End Oil Subsidies. Repeal the four billion dollars per year in federal subsidies that currently are given to the oil companies, and use that money instead to fund investments that will make us less dependent on oil. (55 percent support)

Crack Down On Excessive Speculation. Tighter oversight and regulation of Wall Street speculators to prevent them from artificially driving up the price of gasoline. (54 percent support)

More Fuel Efficient Cars and Trucks. Increase fuel-efficiency standards for cars and trucks, so they get more miles per gallon and consumers will save on their gasoline costs. (49 percent support)
 

The memo from CAP comes on the heels of aggressive efforts by the American Petroleum Institute to paint the issue of rising gas and oil prices as solely the responsibility of the President.

Currently, more than 60% of the American public believes that any political promise to reduce the price of gasoline below $2.50 is an outright lie.

Luckily, in the midst of the political bickering, it appears that the majority of the public is waking up when it comes to the issue of gas prices. If Senate Republicans want to play chicken with a vote on repealing big oil subsidies, they could find themselves on the wrong side of an issue on which public has made their opinion quite clear.

Comments

This is the kind of issue that any politician running for elected office should expect to see coming back to haunt them in the next election cycle.

If gas prices are up and the candidate promised that the other evil party was responsible, well, then, people will have to ask who is the evil party now that prices are skyrocketing again?

If gas prices are headed down running up to the next election, then the incumbent will be portrayed as manipulating the gas price to get reelected (after running on the proposition that if elected, he/she would be able to bring prices down). This was a tactic actually used against the McCain campaign.

In either case, it is not a particularly smart strategy. It has an incredibly short half-life.

 

the tax breaks are removed.

Take the money they are using to subsidize the oil companies and use it to build high speed rail! http://www.nimpr.org

The Big Oil subsidies should be shifted to incentivize & encourage private investment in clean, renewable energy technologies.

We need a new Marshall Plan, but this time to rebuild America for the 21st Century, to regain our leadership in energy technology innovation, to develop & deploy the world’s most sustainable clean energy economy.

  1. Clean energy is competitive with other types of energy
  2. Clean energy creates three times more jobs than fossil fuels
  3. Clean energy improves grid reliability
  4. Clean energy investment has surpassed investments in fossil fuels
  5. Investments in clean energy are cost effective
  6. Fossil fuels have gotten 75 times more subsidies than clean energy

http://thinkprogress.org/romm/2012/03/28/453122/fact-sheet-6-things-you-should-know-about-the-value-of-renewable-energy/?mobile=nc

Fossil fuels have gotten 75 times more subsidies than clean energy

“To date, the oil-and-gas industry received $446.96 billion (adjusted for inflation) in cumulative energy subsidies from 1994 to 2009, whereas renewable energy sources received just $5.93 billion (adjusted for inflation).”

The Historical Role of Federal Subsidies in Shaping America’s Energy Future

http://i.bnet.com/blogs/dbl_energy_subsidies_paper.pdf

“Renewable energy will be the engine of U.S. economic growth and prosperity for years to come, but it is not without opposition. Leaders in policy and business must get behind the Americans who are and will be empowered by renewable power and work together to overcome market barriers and false information. The facts are in and we should seize this opportunity to put Americans back to work and maintain a place at the cutting edge of innovation and competitiveness.”

http://thinkprogress.org/romm/2012/03/28/453122/fact-sheet-6-things-you-should-know-about-the-value-of-renewable-energy/

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