In 2011, the top five oil companies (BP, Chevron, Conoco, Shell, Exxon Mobil) posted a combined profit of $137 billion. In the first quarter of 2012, these companies earned a combined $33.5 billion.
These windfall profits were enough to put Exxon and Chevron in the first and second spots, respectively, of the Fortune 500 most profitable list.
Last year, fossil fuel companies got $11 billion in government subsidies.
How can we justify giving these companies our tax dollars when budget cuts have forced the de-funding of social programs and the layoffs of over 100,000 teachers nationwide?
Last week, Senator Bernie Sanders (I-VT) and Representative Keith Ellison (D-MN) announced they will introduce the End Polluter Welfare Act to Congress.
“People are sick and tired,” said Sanders, “of seeing the same folks who want to cut nutrition programs for hungry children fight tooth and nail to preserve federal tax breaks that go to Exxon Mobil – one of the most profitable corporations in history.”
This legislation will save the Federal government (and taxpayers) over $11 billion annually by doing away with fossil fuel subsidies, such as tax breaks, special financing, and taxpayer funded research and development.
According to 350.org, getting rid of fossil fuel subsidies will put $807 per year back into the pockets of US taxpayers.
The fossil fuel industry receives nearly six times more in government subsidies than the renewable energy industry. This creates significant entry barriers (see oligopoly) for the renewable energy industry and stifles competition.
A fact sheet hosted on Senator Sanders’ website shows how doing away with fossil fuel subsidies will save money in the years to come. I’ve listed some of the highlights below:
– $14 billion saved by eliminating the intangible drilling deduction, which allows oil and gas companies to deduct up to 80 percent of the costs of drilling.
– $12 billion saved by repealing a law passed in 2004 that allows oil companies to claim manufacturing tax credits.
– $6.8 billion saved by closing the loophole that allows corporations like BP to deduct costs incurred from cleaning up spills and paying damages. How can we expect oil companies to prevent spills if they can rely on taxpayers to pay for cleanup?
– $10.6 billion saved by recouping lost royalties for offshore drilling in public waters.
The End Polluter Welfare Act is good for the economy because it will reduce market distortions, put money back in the pockets of taxpayers, and promote green job creation.
Senator Sanders is asking citizens to speak out against corporate welfare by calling and emailing their senators and representatives, or by signing the petition.