ABOUT OIL’S TAX BREAKS

Enviro Groups' Memo Outlines Corporate Welfare Attack on Oil Industry
Anne C. Mulkern, July 12, 2010 (NY Times)

"…A memo circulating from Clean Energy Works, an alliance of about 60 groups, outlines a strategy of framing tax benefits the [oil] industry receives as corporate welfare. The memo calls the messaging plan a 'line of attack' to counteract the description of climate legislation as a national energy tax."

[The Memo:]"The coming weeks will be very important for supporters of comprehensive clean energy and climate legislation…The opposition, in the form of [the American Petroleum Institute] and Big Oil lobbyists in Washington, are spending millions on smear campaigns and calling on their cronies in the Senate to do everything they can to continue America's dependence on oil and prevent a new policy that moves us away from oil and toward a clean energy economy…What they don't want anyone to know is that the American people already have a national energy tax -- The Big Oil Welfare Tax -- in the form of billions of dollars in subsidies to the wildly profitable big oil companies…"

Slice it, dice it or lie about it, but fossil fuels get the lion's share of taxpayer subsidies and it's time that changed. (click to enlarge)

"The coalition of environmental groups and others said it wants a counterpoint to the oil industry's charge that comprehensive climate legislation would amount to a $1,200 annual energy tax on every household…[This] follows [reports] that the oil industry receives $4 billion annually in tax benefits, some of them stemming from decades-old laws to promote oil exploration. Capital investments such as oil-field leases and drilling equipment see a levy of 9 percent…while other industries see an overall tax of 25 percent.

"API, the trade group for the oil and natural gas industry, rejected that it receives corporate welfare…API [says it] has not been among those calling climate legislation a national energy tax. API has not come out in opposition to any of the Senate climate bills, saying that it is 'neutral.'"

click to enlarge

"The Clean Energy Works memo details a number of tax benefits that the oil and natural gas industry receives, and the value of each. Transocean Ltd., the company that owned the drilling rig that exploded and sank in the Gulf of Mexico, saved $1.8 billion in taxes by moving overseas in 1999…API said many of the tax benefits called into question are enjoyed by other industries, as well…

"The Obama administration wants to eliminate many of the industry's tax concessions…In addition, there would be new taxes on Gulf of Mexico oil and gas production and the reinstatement of taxes to generate revenue for cleaning up hazardous waste sites…The same Obama revenue-raising proposal stalled last year, and the proposal so far has received a cold reception from the Senate…[It] last month rejected, 35-61, an amendment that would have ended $35 billion worth of tax breaks for oil and gas producers over the next decade…"