Big Oil Gets Weak Knees On Latest Renewable Energy Bill
Oh, how quickly the winds of fortune change direction. After receiving billions in tax breaks from a Republican-controlled Congress a few short years ago, Big Oil is sweating heavy over a new bill that would raise about $14 billion from petrol companies over 10 years and would shower about the same amount of money on new incentives for solar power, wind power, cellulosic ethanol and scores of other renewable fuels. Before you think this one will be defeated, consider this: The ranking Republican on the Senate Finance Committee, Senator Charles Grassley of Iowa, has already endorsed the $14 billion package.
In addition to this package, the Senate is also considering endorsing a bill by Senator Jeff Bingaman of New Mexico that would raise $10 billion from companies that drill for oil and gas in federal waters but do not currently pay royalties to the government. How silly is that? Oil companies are of course complaining through megaphones claiming that such measures will take money away from drilling and exploring in the U.S. — something that seems about as genuine as their accounting. Did you know that there's an accounting loophole that allows oil companies to save $5 billion a year in taxes? Senator Charles Schumer of New York is attempting to close it with another new bill.
What all of this means is that the honeymoon for the oil industry is clearly over. Sure, there will continue to be record profits and a gushing cash flow, but tax break, subsidies, and other perks will no longer be specific to fossil fuels. The United States is finally beginning to recognize that renewable energy is as important to the security and sustainability of the country as are other sources. As Senator Bingham succinctly put it the other day, "We are cutting back subsidies for the oil and gas industry and using that money to finance the development of new and cleaner sources of energy."
It's about time, Congress. Welcome to the 21st Century. The rest of the world has been waiting. Hit the jump for more.
Tags: Big Business, Congress, legislation, oil, Political News, Politics
June 18th, 2007 at 10:21 pm
I hope that the bill fails. The worst thing that can happen to this country and our already high fuel prices is to hit the oil companies in their pockets. Everybody knows we need oil. Why would we want to shoot ourselves in the foot to spite our face? Makes no sense at all. Oil is the life blood of everything that makes this world tick. Our entire culture depends on the use of oil and fossil fuels. What we should be doing is finding out how to get more of it and more of it without depending on other countries for it. The smartest thing we could do is drill for more oil.
You can use my backyard to start. Drill in my town first if thats what it will take I am happy to do it. The people that live in Alaska want to drill in their back yards for oil and the green peace freaks won’t let them. Those “save the planet” extremists are the ones that need to wake up and get with the 21st century. Without oil we would be living back in the dark ages.
June 18th, 2007 at 11:16 pm
There isn’t a chance in hell that this will pass. Wake up. Let’s open up our gas market to foreign suppliers, yeah that’s a great move. Our air will be cleaner, but Venezuela’s will be worse. How is that better for the environment? We need a global plan to get so called “Big Oil” on board, not just the political grandstanding that the Democrats are all about. I’m all for a greener Earth, but let’s come up with a plan that actually has a chance to work for the world, not just a few Dems needing re-election.
AL
C.H., CA
June 18th, 2007 at 11:22 pm
No corporation in the US actually pays taxes, they simply pass them on to the consumer to survive. The oil companies will be forced to pass on this governmental confiscation of their earned income as well. That means we little folks already struggling with brutal gas prices will see them go even higher. Prices, by the way, that have come about to date because “Big Oil” does not have the capacity to refine enough oil into gasoline to meet demand. Environmentalists, those priests of the religion of Global Warming, have not allowed a refinery to be built in the US since the 1970’s. Cellulosic ethanol is made from corn, and farmers are turning their crops over to company’s milking the global warming cash cow. As farmers make more money sacrificing crops to the gods of Global Warming, watch food prices begin to skyrocket.
Nice work tree huggers.
June 19th, 2007 at 2:45 am
Contrary to the prior comments, I actually believe that if I should pay taxes on what I make now, then I should also pay taxes on any business profits I may earn. Unlike some of us humans who don’t know what we don’t know, like the prior comment authors, I don’t think that Big Oil shouldn’t pay taxes. Nor do I believe that paying taxes is “robbery” by “Big Government”. Frankly, Big Oil and Big Government seem to be in the same business of driving social evolution, but nevermind such important trivia.
If energy drives social evolution, and oil is the primary source of energy, then it seems DUMB to me to spend most of our money on drilling for whats left without spending nearly enough on what to do when its gone. Great thinkers of the 21st century unite under the banner of the prior commentators! Drill blindfolded and deal with problems the day before. That always… works?
June 19th, 2007 at 2:58 am
The Gods of Global Warming have it right. The best thing that can happen is for gas prices to skyrocket (additionally they should be taxed.) That is the only way bloated consumers will start reducing use of fossil fuels. (In the long run, the threat of rising temperatures and the resulting consequences bring far greater risks to the survival of mankind than even a nuclear bomb.) Alternative fuels and mass transit must be developed now before it is too late. (But not ethanol… corn producers are just as greedy as oil producers here, and ethanol will not substantially lessen CO2 and will cause food prices to skyrocket.) Green is good! Greed is bad!
June 19th, 2007 at 6:34 pm
The idea that a small-fry tax on oil drilling in the United States will significantly affect prices of oil now or in the future is ludicrous. The price of oil is determined by worldwide market forces. The amount of oil that will actually be affected is minuscule on a global scale. The only way to lower the price of oil is to use less of it until supply begins to catch up to demand.
What this will do, is provide much needed funds for developing a clean energy future that will benefit us all.
June 23rd, 2007 at 12:11 pm
Taxing any corporation is neither a good or bad thing. One simply needs to consider the consequences of it. Taxes levied on them are passed on to the consumer in higher prices for their product. So who really pays the tax? The only scenario where they might begin to suffer is when the price of their product exceeds market value. Then begins the slide to bankruptcy. That is unlikely to happen with oil, as it is essential to society.
The best way too lower oil prices is to produce a glut. Viable energy alternatives are not on the horizon, despite current rhetoric. There are enough reserves in Anwar to power the USA for over a hundred years. Reserves in the Gulf of Mexico are expected to exceed those in the Middle East. Those screaming about bloated Americans wasting oil are not walking (or car pooling) to those Green protests and Global Warming rallys. They can surrender their transportation if they want. Oil is natural product of earth, like trees. So lets drill a few oil wells shall we? I need to get to work in the morning without floating a loan.