Each year, Big Oil receives more than $20.5 billion a year in federal and state subsidies. Many of these subsidies are holdovers from another century, enacted when the industry was first getting on its feet. One of the largest, a tax deduction for drilling oil wells, dates to 1913. Then there's the tar sands loophole, which gives a tax break to companies that import or produce tar sands oil, which is one of the dirtiest fuels on Earth.
The fossil fuel industry is overwhelmingly responsible for the climate crisis.
Yes, you read that right. The U.S. gives the fossil fuel industry a special deduction to help make the planet hotter.
Unlike when they were first created, these giveaways no longer create jobs. Instead, they pad the profits of a malign industry. A recent study found that 96% of federal fossil fuel subsidies increase profits for oil and gas companies over and above the investment hurdles needed to begin new projects.
Even more dismaying, this is an industry that has spent the last four decades carefully researching the human impacts of climate change, while publicly denying its existence or that it is a problem, and continuing to spew planet-altering greenhouse gases into the atmosphere.
Why are we rewarding them with taxpayer money for this behavior?
On Earth Day this year, a senior official from a fossil fuel industry trade group claimed, under oath at a congressional hearing, that "if you want to take the entire tax code and treat the oil and gas industry as every other industry, we're happy to do that."
We should be taking him up on this offer.
President Biden called for eliminating "billions of dollars in subsidies, loopholes, and special foreign tax credits for the fossil fuel industry" as a key policy to help pay for his American Jobs Plan. However, the current version of the Build Back Better Act moving through the House is missing most of the domestic fossil fuel subsidies repeal passed by the Senate Finance Committee earlier this year.
The reason?
Despite its platitudes that it is "certainly fine being treated like every other industry," the very same oil and gas trade group has been out in full force lobbying against eliminating its lucrative subsidies. Recycling old strategies for influencing the climate debate, the American Petroleum Institute and groups like the U.S. Chamber of Commerce, and the American Exploration and Production Council have been running a coordinated and expensive campaign of mass corporate influence.
Over the last several weeks, the fossil fuel industry wrote letters to congressional leaders and lobbied our House and Senate colleagues directly. It placed op-eds in the local newspapers of key oil and gas states like Pennsylvania, West Virginia and Oklahoma, as well as national outlets like the Hill and the Washington Examiner.
Most insidiously, through a faux grassroots group called "Energy Citizens," the American Petroleum Institute spent millions of dollars running television and Facebook advertisements in key swing states and congressional districts with fearmongering messages.
Meanwhile, California and other states are suffering from out-of-control wildfires and their noxious smoke, tens of thousands of Louisianans were left without power for over two weeks after Hurricane Ida, and the 17th tropical storm of the season earlier this month in the Atlantic, an unusually high number for this time of year.
The fossil fuel industry is overwhelmingly responsible for the climate crisis. A report published in 2017 found that since 1988, active fossil fuel producers, including American companies ExxonMobil, Chevron, ConocoPhillips, Marathon Petroleum and Occidental Petroleum, are linked to 71% of all industrial greenhouse gas emissions.
At a time when even an international oil regulatory agency declared we must end all new oil and gas exploration today to have any hope of limiting devastating global warming, and when renewables are set to become a greater share of the U.S. energy mix than natural gas by 2050, we know that the only people arguing for padding the pockets of oil executives are the oil executives themselves.
Right now, Congress has the power to call the industry's bluff. We can end special privileges for one of our most polluting and badly behaved industries and instead support the clean energy sources of the future. It's time to reject bad-faith industry arguments intended to block climate legislation and preserve shareholder profits. Our colleagues in Congress need to summon the moral courage to fight for just that.
