The Ethanol Papers - Paperturn manuscript - Flipbook - Page 596
industry that has enjoyed government support for many years—totaled
approximately $72 billion over the study period, representing a direct cost
to taxpayers (this figure did not include the cost of our military involvement anywhere in the world; or the funds provided to clean up oil spills;
or for water infrastructure improvements in ports, harbors, or waterways
that are used to accommodate oil tankers).
Subsidies for renewable fuels, a relatively young and developing industry, totaled $29 billion over the same period.
Most of the largest subsidies to fossil fuels were written into the U.S. Tax Code
as permanent provisions. By comparison, many subsidies for renewables are
time-limited initiatives implemented through energy bills, with expiration dates
that limit their usefulness to the renewables industry.
On July 3, 2010, The New York Times published a story by David Kocieniewski,
a Pulitzer Prize-winning writer, titled, “As Oil Industry Fights a Tax, It Reaps
Subsidies.” Among other findings, Kocieniewski reported that:
“When the Deepwater Horizon drilling platform set off the worst oil spill
at sea in American history, it was flying the flag of the Marshall Islands.
Registering there allowed the rig’s owner to significantly reduce its American taxes.
The owner, Transocean, moved its corporate headquarters from Houston to the
Cayman Islands in 1999 and then to Switzerland in 2008, maneuvers that also
helped it avoid taxes. At the same time, BP was reaping sizable tax benefits
from leasing the rig.
According to a letter sent in June to the Senate Finance Committee, the company used a tax break for the oil industry to write off 70 percent of the rent for
Deepwater Horizon — a deduction of more than $225,000 a day since the lease
began.
With federal officials now considering a new tax on petroleum production to pay
for the cleanup, the industry is fighting the measure, warning that it will lead to
job losses and higher gasoline prices, as well as an increased dependence on
foreign oil. But an examination of the American tax code indicates that oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process.
