Last year, the top six U.S. oil companies made $148.7
billion in profits. That works out to about $407 million a day, $17 million an
hour, or $283,000 per minute.
At that pace, in roughly the amount of time it
will take to read this commentary, just these six oil companies will have
earned about $3 million in profits. Not revenues, profits.
Good for them. Profits are a good thing. They are a sign
of success, and successful companies are part of a growing economy.
But the
flip side of this equation is the billions of dollars worth of subsidies going
to these same companies every year — at a time when our national debt is so
large it is becoming a drag on our economy. Credit rating agencies already
downgraded the quality of American debt, which will eventually make it more
expensive for the government to borrow money, which further increases our debt.
We at Taxpayers for Common Sense have long called for the
sunset of all energy subsidies, particularly those for fossil fuel extraction.
They are going to companies that don't need them, and they create future
liabilities for taxpayers that usually go unnoticed.
Besides the myriad
subsidies that giant oil and gas companies enjoy, which cost taxpayers billions
a year, there are the costs of cleaning up spills and other disasters that
usually get picked up by the feds. Same goes for the coal companies, some of
which abandon their mines for taxpayers to clean up.
That's why I joined Sen. Bernie Sanders (I-VT) and Rep.
Keith Ellison (D-MN) in announcing the introduction of their bill to end
special tax breaks and subsidies for oil, gas, and coal companies. This is the
most comprehensive approach to ending these handouts, but it's just the latest
proposal that targets energy subsidies.
President Barack Obama's proposed 2013 budget would
eliminate just eight oil and gas subsidies, which would save the American
taxpayer more than $38.6 billion over the next decade. Rep. Mike Pompeo (R-KS)
introduced the "Energy Freedom and Economic Prosperity Act" to cut
tax credits for oil drilling, nuclear power, solar panels, and wind turbines.
Sens. Jim DeMint (R-SC) and Mike Lee (R-UT) introduced a companion bill in the
Senate. Though it only cut two unnecessary subsidies to oil and gas companies,
it does suggest a bipartisan interest in finally getting rid of these wasteful
energy subsidies. I support all these bills.
But don't be fooled into thinking Congress has turned
over a new leaf. My organization recently joined a diverse group of advocates
denouncing the New Alternative Transportation to Give Americans Solutions or
NAT GAS Act, which was looking to hitch a ride on the transportation bill.
It
would create new subsidies for natural gas from manufacturing and
infrastructure to consumer tax credits that would carry a roughly $5 billion
price tag. This would undo the progress made last year in finally cutting the
ethanol subsidies.
So it's worth repeating: We need to cut energy subsidies!
We can't afford them, and we don't need them anyway. Congress should start with
the billions in subsidies going to the oil and gas industry every year. They
are obsolete, ineffective, and a huge waste of valuable public resources at a
time when we are rummaging through the couch cushions to find loose change to
pay for our ballooning deficits and debt.
Ryan Alexander is president of Taxpayers for Common
Sense, a nonpartisan federal budget watchdog. www.taxpayer.net
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