Fossil Fuel Subsidies

Tue, 2012-07-03 15:51Ben Jervey
Ben Jervey's picture

Bloomberg Stunner: How Chesapeake Energy Paid Less Than a 1% Tax Rate On $5.5 Billion in Profits

Chesapeake Energy, a company that is no stranger to financial scandals, has found itself on the front page of the financial papers again. This time, the subject is taxes. Or how Chesapeake barely pays them.  

Over its 23-year history, Chesapeake Energy, the second largest producer of natural gas in the U.S., and the company described by its founder and CEO Aubrey McClendon as “the biggest frackers in the world,” has earned roughly $5.5 billion in pre-tax profits. To date, the company has paid $53 million in taxes. That’s an effective tax rate of under 1 percent - a massive taxpayer subsidy.

The corporate income tax rate in the U.S. is 35 percent. 

The Bloomberg article that exposed these stunning figures is quick to note that this is far less than the 12 percent rate that GE paid in 2010 that caused such public outrage, and even a tiny percentage of the 18 percent effective rate that Google had to answer for.

So how does Chesapeake pull this off? Mostly, it’s due to a rule written in 1916 that allows oil and gas producers to, according to Bloomberg, “postpone income taxes in recognition of the inherent risk of drilling wells that may turn out to be dry.

The break may be outdated for companies such as Chesapeake, which, thanks to advances in technology, struck oil or gas in 99.6 percent of its wells last year.“ When the policy was written, drillers struck “dry wells” roughly 80 percent of the time.

Read more: Bloomberg Stunner: How Chesapeake Energy Paid Less Than a 1% Tax Rate On $5.5 Billion in Profits
Tue, 2012-06-19 11:40Brendan DeMelle
Brendan DeMelle's picture

Breaking: Leaked Rio+20 Earth Summit Final Agreed Text - Utterly Inadequate Response to Global Crises

DeSmogBlog has obtained the final negotiating text that will emerge from the Rio+20 Earth Summit and it is an utter disappointment to anyone who hoped that world leaders would pull together a meaningful global agreement on ending fossil fuel subsidies or other needed steps to protect future generations from resource depletion and global climate change.

Read the final text here: "The Future We Want"[.DOC] or [.PDF provided by DeSmog for those without Word]

Update: The Guardian (which first posted the text earlier today) has this summary of the implications:
 

Barring a last-minute rejection by one of the main negotiating blocks, the draft that will be presented to the 100 leaders attending the summit will contain almost no timetables, definitions or ways to monitor new sustainable development goals, nor will it strongly commit nations to move to a "green economy" that integrates environmental and social costs into decision-making.

Instead, civil society groups say the new text simply acknowledges the world's dire environmental and social problems without spelling out how to deal with them. 


Read the early reactions to the final text below from Greenpeace and WWF. 
 

Read more: Breaking: Leaked Rio+20 Earth Summit Final Agreed Text - Utterly Inadequate Response to Global Crises
Tue, 2012-04-24 15:52Steve Horn
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ALEC Launches Assault on Renewable Energy Industry

The American Legislative Exchange Council (ALEC), as covered previously by DeSmogBlog, is the "Trojan Horse" behind mandating that climate change denial ("skepticism," or "balance," in its words) be taught in K-12 classrooms.

Well, ALEC is at it again, it appears. Facing an IRS complaint filed by Common Cause, one of the leading advocacy groups working to expose the corporate-funded bill mill, ALEC has also launched an assault on renewable energy legislation, according to a well-documented report written by Bloomberg News.

The two developments are worth unpacking.

Common Cause IRS Complaint

The Washington Post reported that on April 23, Common Cause "had filed an IRS complaint accusing ALEC of masquerading as a public charity...while doing widespread lobbying." 

ALEC is trying to brush aside this complaint, but Common Cause presents a compelling case.

“It tells the IRS in its tax returns that it does no lobbying, yet it exists to pass profit-driven legislation in statehouses all over the country that benefits its corporate members,” said Bob Edgar, president of Common Cause, in a statement. “ALEC is not entitled to abuse its charitable tax status to lobby for private corporate interests, and stick the bill to the American taxpayer.”

Common Cause wants the IRS to complete a no-holds-barred audit of ALEC’s work and to examine whether it violated IRS laws. 

Read more: ALEC Launches Assault on Renewable Energy Industry
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