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Payola for the Most Profitable Corporations in History

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Posted on Apr 7, 2012
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By Bill McKibben, TomDispatch

This piece originally appeared at TomDispatch.

Along with “fivedollaragallongas,” the energy watchword for the next few months is: “subsidies.” Last week, for instance, New Jersey Senator Robert Menendez proposed ending some of the billions of dollars in handouts enjoyed by the fossil-fuel industry with a “Repeal Big Oil Tax Subsidies Act.”  It was, in truth, nothing to write home about—a curiously skimpy bill that only targeted oil companies, and just the five richest of them at that. Left out were coal and natural gas, and you won’t be surprised to learn that even then it didn’t pass.

Still, President Obama is now calling for an end to oil subsidies at every stop on his early presidential-campaign-plus-fundraising blitz—even at those stops where he’s also promising to “drill everywhere.” And later this month Vermont Senator Bernie Sanders will introduce a much more comprehensive bill that tackles all fossil fuels and their purveyors (and has no chance whatsoever of passing this Congress).

Whether or not the bill passes, those subsidies are worth focusing on.  After all, we’re talking at least $10 billion in freebies and, depending on what you count, possibly as much as $40 billion annually in freebie cash for an energy industry already making historic profits.  If attacking them is a convenient way for the White House to deflect public anger over rising gas prices, it is also a perfect fit for the new worldview the Occupy movement has been teaching Americans. (Not to mention, if you think about it, the Tea Party focus on deficits.) So count on one thing: we’ll be hearing a lot more about them this year.

But there’s a problem: the very word “subsidies” makes American eyes glaze over. It sounds so boring, like something that has everything to do with finance and taxes and accounting, and nothing to do with you. Which is just the reaction that the energy giants are relying on: that it’s a subject profitable enough for them and dull enough for us that no one will really bother to challenge their perks, many of which date back decades.

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By some estimates, getting rid of all the planet’s fossil-fuel subsidies could get us halfway to ending the threat of climate change. Many of those subsidies, however, take the form of cheap, subsidized gas in petro-states, often with impoverished populations—as in Nigeria, where popular protests forced the government to back down on a decision to cut such subsidies earlier this year. In the U.S., though, they’re simply straightforward presents to rich companies, gifts from the 99% to the 1%.

If due attention is to be paid, we have to figure out a language in which to talk about them that will make it clear just how loony our policy is.

Start this way: you subsidize something you want to encourage, something that might not happen if you didn’t support it financially. Think of something we heavily subsidize—education. We build schools, and give government loans and grants to college kids; for those of us who are parents, tuition will often be the last big subsidy we give the children we’ve raised. The theory is: young people don’t know enough yet. We need to give them a hand when it comes to further learning, so they’ll be a help to society in the future. From that analogy, here are five rules of the road that should be applied to the fossil-fuel industry.

1. Don’t subsidize those who already have plenty of cash on hand. No one would propose a government program of low-interest loans to send the richest kids in the country to college. (It’s true that schools may let them in more easily on the theory that their dads will build gymnasiums, but that’s a different story.) We assume that the wealthy will pay full freight.  Similarly, we should assume that the fossil-fuel business, the most profitable industry on Earth, should pay its way, too. What possible reason is there for giving Exxon the odd billion in extra breaks? Year after year the company sets record for money-making—last year it managed to rake in a mere $41 billion in profit, just failing to break its own 2008 all-time mark of $45 billion.

2. Don’t subsidize people forever. If students need government loans to help them get bachelor’s degrees, that’s sound policy. But if they want loans to get their 11th BA, they should pay themselves. We learned how to burn coal 300 years ago.  A subsidized fossil-fuel industry is the equivalent of a 19-year-old repeating third grade yet again.


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DonSchneider's avatar

By DonSchneider, April 10, 2012 at 7:22 am Link to this comment

Higher gasoline prices ? Maybe it is time to look beyond just well subsidized big
oil and take a peek under the skirts of the corporate hand holders of big oil.
Goldman Sachs has invested more in petroleum futures these past few months
than ever before, and insiders say their investment splurge will continue until
gasoline prices hit the 5$ / gal mark. They will back off the price busting strategy
when their econo/political goal has been reached in Nov. . Till then ,  Happy
Motoring Y’all ..... Mo Tea Sir ?

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By Albert R. Close, April 9, 2012 at 5:59 pm Link to this comment
(Unregistered commenter)

For all of the talk that has been going on for years about high gas prices, doesn’t
it seem strange that NO ONE ever mentions the words “Price Gouging” ?

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By Doubtom, April 9, 2012 at 12:03 pm Link to this comment

Is there any one issue that so clearly reveals that we do not control our
government as this taxpayer’s subsidy of one of the most profitable industries in
the world?  Is there even one citizen who feels that we should be subsidizing the
oil industry?
Since we do not control our government in the slightest degree, we may as well
start plotting our revolution as required by Thomas Jefferson’s wisdom. 
Does this not also reveal that the Congress is bought and paid for?

Report this

By DornDiego, April 9, 2012 at 8:09 am Link to this comment

This was a great start toward a platform statement on energy.  But a campaign
lives on more symbolic stuff; for instance, Oil Welfare.  We can’t carry the oil
industry any longer, not if its CEOs and top managers take up to 200 or 300 times
the salary of an average worker.  We could argue that the oil subsidy was
temporary and will be reinstated when the industry finds a technology that won’t
destroy people’s health.  We could argue that electric cars need the subsidy, not
the oil industry, which, after all, is making more money now than it ever did.  Oil
Welfare sets up a realistic context for all these arguments.
Good luck fighting this battle.  It’s a tough sell because there an awful lot of oil
junkies out there

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By Roman Haluszka, April 9, 2012 at 5:57 am Link to this comment
(Unregistered commenter)

I can’t understand how anyone would want a government facining deficits an debt to subsiize business corporations which make multi-billions of dollars in profits.

It seems that the GOPTP wants to reduce or delete welfare payments to the needy, and unemployment subsidies to those who have suffered job loss, while passing this money along in the form of tax cuts for the wealthy and for the corporatocracy. 

When GOPTP ghovernors pass “right-to-work” laws this combination appears to be a strategy to create a labour force of virtually “forced labour” as the labour pool becomes filled with these victims of circumstance who will accept meager wages and few benefits so as to survive.

What a horrible set of values!

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BrooklynDame's avatar

By BrooklynDame, April 8, 2012 at 4:45 am Link to this comment

It’s long past time that investigations resulting in punishment for elected officials
who are in bed with “Big Oil” take place. These unpatriotic companies are watching
fellow citizens suffer as the nation tries to pull itself out of an economic recession
but they continue to bilk us for billions—and the system, with support of these
bought and paid for elected officials, is designed to work in their favour. Shameful.

http://borderlessnewsandviews.com/2012/03/spoil/

http://borderlessnewsandviews.com/2011/11/wheres-my-money-oil-company-
subsidies/

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