Big oil benefiting from $14 billion in taxpayer handouts—despite making record profits
Posted Nov. 3, 2008 / Posted by: admin
Statement of Sara Zdeb, Friends of the Earth legislative director
As Americans struggle with the high cost of energy, the world’s biggest oil companies are reaping record-setting profits. ExxonMobil alone reported a $9.9 billion quarterly profit, a 75 percent increase. Royal Dutch Shell, BP, ConocoPhillips and Chevron Texaco fared similarly well.
Big oil is reaping these record profits at the expense of ordinary Americans who are struggling to meet the high cost of energy. The Energy Department predicts up to a 41 percent increase in home heating prices this winter. For low income families, this could force tradeoffs between food and other basic needs and the cost of home heating.
Oil companies aren’t just profiting from skyrocketing energy prices—they’re eating from a government trough of tax cuts and other handouts courtesy of the American taxpayer. These big oil companies were on the receiving end of more than $4 billion in spending subsidies and tax incentives included in the Energy Policy Act of 2005. And they were already set to reap an additional $10 billion in tax cuts authorized prior to passage of the energy bill.
These giveaways help big oil cover the cost of everything from refining equipment to exploration to wages, equipment and site preparation. You name it, there’s a tax cut for it. The recent energy bill even included a $1.5 billion fund for an oil consortium in Tom DeLay’s home district—a cash cow slipped into the bill at last second and never debated.
Big oil often uses the catchphrase “free market” to defend its record-setting profits. But there’s nothing at all free market about lavishing billions in tax benefits on these wealthy corporations. It tilts the playing field even farther toward big oil and away from efficiency, conservation and renewable energy—solutions that will help consumers today and reduce our dependence on oil in the future.
There is simply no justification for lavishing billions in tax cuts and other handouts on oil companies whose profits are skyrocketing at the expense of consumers. In fact, the president himself said it best when he stated, “With oil at more than $50 a barrel, by the way, energy companies do not need taxpayers’- funded incentives to explore for oil and gas.” Congress should repeal these special interest giveaways.
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