Tax Incentives For Big Oil

TODAY IS FRIDAY, MAY 24, 2013

May 17, 2011 at 10:00 AM

Tax Incentives For Big Oil

Deborah Amos in for Tom Ashbrook.

With fuel prices climbing higher and oil companies posting near record profits, policymakers in Washington are reconsidering tax breaks for big oil. We look at the politics and policy surrounding the issue.

ExxonMobil chairman and CEO Rex Tillerson, right, accompanied by fellow oil company executives, testified on Capitol Hill last week on the issue of tax incentives for the industry. From right to left are: ConocoPhillips CEO James Mulva, BP America Chairman H. Lamar McKay, and Shell Oil President Marvin Odum, Tillerson. (AP)

ExxonMobil CEO Rex Tillerson, right, accompanied by fellow oil company executives, testified on Capitol Hill last week on the issue of tax incentives for the industry. (AP)

With gas prices at $4 a gallon, oil often sailing past $100 per barrel and record profits for the industry, who thinks the big five oil companies still need tax breaks?

Three-quarters of Americans say they want the special treatment to end. Democrats are proposing a bill to eliminate key deductions, but oil executives charge it is reckless to single out companies that create jobs and open new wells.

Do we get more pain at the pump and less drilling for more oil if subsidies disappear?

This hour, On Point: The recovered oil billions—at what price.

- Deborah Amos

Guests:

Sen. Sherrod Brown, Democratic senator for Ohio. He is co-sponsor of a bill that would reduce tax incentives for the nation’s five biggest oil companies.

Lisa Margonelli, director of the Energy Policy Initiative at the New America Foundation. She’s author of “Oil on the Brain: Petroleum’s Long Strange Trip to Your Tank.”

John Hofmeister, former CEO of Shell Oil. Founder and CEO of Citizens for Affordable Energy. He’s author of “Why We Hate the Oil Companies: Straight Talk From an Energy Insider.”

Brian Johnson, senior tax advisor at the American Petroleum Institute.

Yar

What would be the tax burden if we paid the full amount needed to fund current programs and pay a reasonable amount toward the deficit? How much would the average person’s taxes increase? Tax policy is seldom looked at from the big picture perspective. Now that we have reached our credit limit, President Obama should cite congress’s failure to act on the debt ceiling and declare a war on our national debt. He should make an executive that suspends all deductions in the tax code. I think it would be constitutional because he is not legislating a new tax, he would simply eliminate deductions from existing tax code. Just think, if business expenses were not deductible, the entertainment industry would shrink rapidly. From advertising, charitable deductions, how much of our economy is based on what would otherwise be tax revenue?
- Tina
  
  Your idea is worth talking about a lot, from many, many angles, to make sure that such a big change wouldn’t backfire. I’m not saying that I’m for it or not; I’m saying that a public discussion would throw light somewhere. I do FEAR for our non-profits, however! I would really, really, really fear that they might not survive. Most of my work life was spent in the non-profits, mainly because I loved the fact that people WORKED! The few temporary jobs I took in the for-profit world showed me, each time, situations where people only worked to their job specifications; to do that, they often stalled, or created a bloated department. The non-profits I was fortunate enough to work for over-worked us, which was sometimes unfair, but it didn’t drive you nuts with the idiocy of wasted time! And there was the good will of the entire mission. There are statistics on non-profits, but I don’t have them; but I do know that many survive because of a few HUGE contributors who lend stability to the “effort” which THEN brings in the more moderate contributors. I think that many people don’t really know what non-profits do or how they are chartered; I know there was someone bad-mouthing them on this site a few months ago, and it was from a clueless position.
  
  Thanks, Yar! You so often think outside the box!
Cory

I’ve been beaten into submission on this one. I don’t see any civilzed, peaceful way to increase the amount of tax revenue contributed by wealthy businesses and individuals. It is the analogy of squeezing a balloon or a handfull of sand.

They will keep what they have and extract even more, and will not bat an eye while those at the bottom twist in the wind.

What to do?
- Zing
  
  Some might say the reason you’ve been beaten is that your perspective is neither civilized nor peaceful enough.
  - Cory
    
    Yes, I’m sure you’d prefer that we take, like it, and thank you for it.
- Steve
  
  How much do they want…more
  When will they stop…when they have all of it.
  
  If you do not beleive in violence get out of the game
  - Cory
    
    Steve, I try not to express it here for fear of deletion, but I think violence and civil disobedience are the final tool of the downtrodden. If we have reached the point where our individual votes don’t matter nothing else remains.
    - http://gregorycamp.wordpress.com/ Greg Camp
      
      Our votes do matter. The problem is that so many who vote don’t bother to think for themselves before going to the polls.
    - Ninagraphix
      
      If they are educated as to who is pulling their strings. I worry that Teabaggers and Sovereign ‘citizen’ types who swallow the Libertarian BS are thinking violence-as-the-only-means (and acting it out in some cases) without a real idea of what they’re fighting for. “No Taxes (for the rich, who they deify)” seems to be their only cause.
    - Tina
      
      Cory, I’m really, really afraid that our votes ALREADY don’t matter. Both parties are bought by the same corporations. You are well aware of the IGNORANT Supreme Court rulings like Citizens United. I am so grateful for President Obama’s intelligence; but I am so deeply upset with him for selling “Change” as if it meant “going toward the Left”, when his actions define it as “compromising so much that there is no Left left”! So, as I see it, EVEN WHEN OUR VOTES ELECTED A BRILLIANT MAN, he turned out to be both a turn-coat and a fairly moderate Republican; and we, we are delivered up into Corporate Hands for Squishing. Many, many people are living Dickensian lives in 21st century America. Shameful!
Zing

I’d like to hear an estimate of total tax revenues collected by all levels of government on a tank car of oil from exploration through combustion.
- Cory
  
  Yes, most certainly the problem with gas prices is taxation. How much does a gallon of gas cost throughout most of the western world? We are the masters of cheap gas and big cars.
  
  The worst part of this whole thing may be listening to the people with the most tell rest of us they are overtaxed. That’s the goal, you see. If “they” can reduce the size of government to pure impotence, no one with any power or authority will remain to tax or regulate their excesses.
- Jim in Omaha
  
  I’d like to hear an estimate of total tax revenues SPENT by all
  levels of government on a tank car of oil from exploration through
  combustion.
  
  That would, in my thinking, include military/security expenses, road building and maintenance, oil spill containment and damage, repair of drilling sites, pollution, etc. Is there any doubt that this amount far exceeds the tax receipts?
  - Cory
    
    I’ve never offered a second free ale or lager before, but for this razor sharp point I’ll have to make an exception.
    - Zing
      
      Why not? Because there was no second drink available after you left the table? It’s time you thought of your health. Talk to your spouse and listen to her advice.
Cory

What’s so offensive is when the subject of eliminating oil subsidies comes up, the millionaires actually show up in DC to fight it! Look at the four older white men in expensive suits in the photo above. How much does each make per year? What was the quarterly profit from each of their companies? Yet there they are, telling our representatives why discontinuing their taxpayer funded subsidies would irreperably damage the oil industry.

Theater of the absurd.
- Anonymous
  
  They are like crack addicts. They need the money. The very idea of them not getting these subsidies gives them withdrawal symptoms.
Anonymous

I was watching the News Hour on PBS and I think Brian Johnson was on or it was someone from the API. He was basically lying and then using threats of job layoffs and higher prices if the oil/gas companies did not get what they wanted. Listening to this man made me pretty angry.
The nerve of these people. The sense of entitlement is off the charts.
Congress will do nothing, they will hold hearings and put on a show but in the end they will do nothing. These corporations have become so huge and wealthy that they control the nation. It’s that simple.

As to the violence aspect of showing ones disdain for how our nation is becoming a plutocracy, well that wont work. Even the smallest police force has paramilitary gear. Our nation has become a police state right under our noses. The Supreme Court’s recent 5-4 decision preventing consumers from
bringing class-action suits against corporations is part of a disturbing
trend of the five most conservative justices who are obvious corporate shills.
Our nation is finished in my view. We have crossed the line and the control is with the special interest. I’m not going to hold my breath that today’s show is going to have one once of truth in it. It will have a lot of spin from the oil/gas representatives and push back from the other side.
When Sharrod Brown comes up for reelection watch how the oil/gas corporations pour millions into defeating him. I would not even be surprised if they put in their own puppet.

America = plutocracy.
Michael

Don’t worry gas prices will fall once the next wall street crash happens in 5-6 years from now.

Love to hear what % the wars increase oil prices. of course speculation has nothing to do with it? That why we need to make it even easier to do so to (hench) lower prices cause we know the free market is a rational player. Wall street has proven this theory out quite well.
LiamintheGift

I appreciate that your program is expanding the conversation beyond the confines of what the media allots attention to. Thank you. It brings to light the fundamental premises of how our economic system precipitates our relationship to the earth. However, I think the conversation about our economy and the energy it depends on has been expanded most eloquently by Charles Eisenstein.

His new book
“Sacred economics” brings to light a way forward, neither left, nor
right, that provokes a community forming conversation about how we can
change our paradigm through a more connected, ecologically sound and
equitable money system and economy. I think his would be a unique and thought provoking
voice in the conversation about the debt ceiling or the economy more
generally. Sacred Economics, describes a world
economy premised on the principles of social connection, ecological
health and creative fulfillment. He speaks extensively on the roots of
our economic and ecological conditions and offers readers a conscious
way to engage as the world transitions through financial, environmental,
personal and political crises.

Charles Eisenstein is a teacher,
speaker, and writer focusing on themes of civilization, consciousness,
money, and human cultural evolution. His writings on the web magazine
Reality Sandwich have generated a vast online following; he speaks
frequently at conferences and other events, and gives numerous
interviews on radio and podcasts. Writing in Ode magazine’s “25
Intelligent Optimists” issue, David Korten (author of When Corporations
Rule the World) called Eisenstein “one of the up-and-coming great minds
of our time.” Eisenstein graduated from Yale University in 1989 with a
degree in Mathematics and Philosophy, and spent the next ten years as a
Chinese-English translator. He currently lives in Harrisburg,
Pennsylvania and serves on the faculty of Goddard College.

Contact me at 617-922-5546 or Maddenlm@gmail.com with questions about booking Charles as a guest. If you are interested in more about Charles you can find his website here http://www.ascentofhumanity.com . Here is the video trailer for his new book “Sacred Economics” http://www.youtube.com/watch?v=w044tSGZXLU

Respect and Gratitude,

Liam Madden
- Tina
  
  Liam, could you just give us a little list of 3 to 5 of his ideas? Thanks!
  - http://gregorycamp.wordpress.com/ Greg Camp
    
    Don’t encourage product placement.
http://gregorycamp.wordpress.com/ Greg Camp

Tax breaks ought to be used to encourage new ideas or create new jobs, but the petroleum industry is mature. There’s little left to learn in that field, other than getting oil from increasingly remote locations.

Democrats need to call out the hypocrisy of Republicans on this matter. Republicans claim to support small businesses and the little guy. They claim to want small government–in other words, too small to show favoritism or to engage in social engineering.

The American people also have a duty here to stop tolerating this. I don’t see us as having reached the time for Second Amendment solutions, but we ought to tell politicians that we won’t vote for anyone who supports these tax breaks.
http://gregorycamp.wordpress.com/ Greg Camp

How much do you get paid to be his secretary?
Brandstad

You should mention that the oil industry has far lower proffit margin than most US industries
- http://gregorycamp.wordpress.com/ Greg Camp
  
  Right–they’re struggling to survive; the wolves are at the door, and their creditors are calling at all hours of day and night. Shall I pass my hat around to collect some money to help them get through the month?
- Cory
  
  How much money did the 4 guys pictured above make apeice last year? If profit margins in the industry are tight I imagine it may have hurt their takehome, right?
- Jhsusak
  
  On what do you base this statement? Facts please.
Brandstad

Everyone knows that if you want less of something, you tax it more. Why do you want less US oil production?
- Jhsusak
  
  Because this country is about so much more than maintaining our oil dependency.
- ohiolibrarian
  
  Taxation is only one factor affecting production. Pretty silly to think it is the only one.
  
  Hint: High oil prices are far more important and considering they are around $100/barrel …
Jane

To the GOP, it is okay to cut education and food programs that benefit the working and middle-class, because we need to tighten our belts. But, cutting into trillion profits of corporations is a bad. Their sense of justice is amazing.
Mike in PA

Unless we are devoting tax payer money to R&D, where it is not feasible for individuals and businesses to perform such R&D on their own, we should not providing any other subsidies.

But, (1) can you please explain what benefits the individual american receives from the subsidy? e.g. lower gas prices, more R&D, etc. AND (2) please explain how the removal of this subsidy will not be passed on to the consumer.
- ohiolibrarian
  
  You know that whole formulation “the removal of this subsidy will not be (or will be) passed on to the consumer” is screwy. The things that are being subsidized are basic business functions of the oil companies and are part of their costs. They set prices based on their costs and what the market will bear. They will always do that with or without subsidies.
  
  Maybe if we stopped funding them, they would find ways to do those things more efficiently. Maybe they would reduce the level of profits they report. Maybe they would raise prices … but not so much that the demand would fall too far. In fact. the only thing that prevents oil companies from raising prices right now is the fear that demand will drop too much and precipitate problems (economic or political). And that won’t change with or without subsidies.
http://gregorycamp.wordpress.com/ Greg Camp

The oil companies need to recognize that the more expensive oil becomes, the more incentive we have for conservation and new technologies. These prices aren’t in their interests.
- Tina
  
  Sadly, they probably know that we don’t have the money to develop these other forms, because they know that THEY HAVE the money!
- Tom
  
  They already know this but the Obama administration has said that energy prices must got up to allow the new technology to become economically viable. As you can see The administration is winning the price war!
Cory

Senators who vote to continue the subsidies ought to have their names announced loudly and posted in bright lights. Their next re-election opponent should beat them over the head with this vote.
Edward Onessimo

Unfairly singled out? Absolutely! End subsidies for corn too!
- http://gregorycamp.wordpress.com/ Greg Camp
  
  Right–a subsidy exists to help a struggling new industry that we believe is needed. I have the feeling that growing corn is something that we know how to do by now.
Cory

I’d like to know how Paul Ryan will vote on this. He’ll take away your medicare and social security if you are younger than 55, but I doubt he’ll take bread out of the mouth of big oil.
Anonymous

Let me get this straight. We have a congress, and particularly the Republican members, who are asking the middle classes, the elderly and the poor to make sacrifices in how things are payed for due to our debt and deficit. While all these huge corporations, in this case the oil/gas corporations, are not going to make any concessions towards dealing with our fiscal problems. What’s is wrong with this picture?
Tina

I cannot STAND how much time has been wasted, with MOST Americans SUFFERING long-term unemployment, when the SOLUTION IS SO SIMPLE: THE TAX STRUCTURE MUST BE CHANGED SO THAT OUR JOBS CANNOT BE OUTSOURCED. We were sold the Bill of Goods that we should have access to Cheap Goods. Cheap Goods only got us No Jobs! Penalize companies that outsource! Change the tax codes! The Investor Class is Too Rich, Too Small, Too Powerful!

ALSO: all these Economists out there with their “models”? How come we NEVER see a “model” which indicates the HAVOC that occurs when the Financial Capitalists OWN too much of the money; CONTROL too much of the direction of the economy; CONSTITUTE too small a percent of the citizens? A simple Pie Chart would SHOW at which point an economy is Going to Go Over the Edge (i.e., high, long-lasting unemployment) because it is skewed too much toward the Financial Capitalists!
http://gregorycamp.wordpress.com/ Greg Camp

Oh, yes, let’s produce more oil. How long will that last? It’s been argued that America reached peak oil in the 70s. Whether that’s true or not, there is only so much oil in our territory and in the world. Subsidies and support from the government in general needs to go to new technologies and conservation.
Brandstad

Shouldn’t we stop subsidizing Ethonol and Electric vehicles also? How much would this save?
- http://gregorycamp.wordpress.com/ Greg Camp
  
  Those are new technologies that can get us away from using oil. That’s exactly what subsidies are supposed to be used to promote.
  - Tom
    
    So we should subsidize inefficient and more expensive technologies to give them even footing with the most efficient and cost effective sources of energy? Isn’t this like thorowing good money after bad? When do you stop this money wasting proposal?
    - http://gregorycamp.wordpress.com/ Greg Camp
      
      Where’s the waste in ethanol or electric cars? There’s a lot of potential in electric cars, especially once we can generate electricity here using primarily renewables. The fact is that oil will be gone–not today, and perhaps not tomorrow, but soon enough. We either find a new technology, or we return to horses.
      - Anonymous
        
        Should we also spend money on developing a worm drive like seen in star track because it seems to fit the same criteria as your argument for wasting money on electric cars? I am sure the worm drive will be all the rage in about 1k years when we explore the universe!
      - ohiolibrarian
        
        You should read about the inefficiency of early cars. And computers. And pretty much every other major innovation.
        
        And it’s Star Trek.
      - Cory
        
        I am offended as a Trekkie.
Brandstad

New, federally-mandated light bulbs will cost $50 – each…

This is what happens when the dems start mandateing technology that isn’t ready for prime time.
- http://gregorycamp.wordpress.com/ Greg Camp
  
  Have you looked at compact fluorescents? They’re much cheaper than that.
  - Tom
    
    They don’t meet the energy standards for 100W replacement bulbs mandated for 2014. Read before posting please!
    - http://gregorycamp.wordpress.com/ Greg Camp
      
      Let’s be realistic. Do you really see the government taking away every cheap light bulb? Perhaps the question is not reading in general before posting, but reading well before posting.
      - Anonymous
        
        You didn’t happen to notice the national news talking about the last incondescent light bulb company located in the US closing about a year ago in preperation for the new Green, Great, and wildly expensive and toxic light bulbs? I think it was in the Ohio area…
- ThresherK
  
  Try putting some effort into your lazy blah blah, or maybe take the day off. This is your A game?
- Anonymous
  
  It’s the Brandstad comedy hour…
  - Anonymous
    
    If it wasn’t true it would be hilarious!
    http://news.yahoo.com/s/ap/20110516/ap_on_hi_te/us_led_lighting;_ylt=AsE3Gkdtse.WMyLRBM_sWOCs0NUE;_ylu=X3oDMTNqNzVocWJlBGFzc2V0A2FwLzIwMTEwNTE2L3VzX2xlZF9saWdodGluZwRjY29kZQNtb3N0cG9wdWxhcgRjcG9zAzgEcG9zAzUEcHQDaG9tZV9jb2tlBHNlYwN5bl9oZWFkbGluZV9saXN0BHNsawNs
ThresherK

I’m with Margonelli, The API guy doesn’t know that “conservation is barrel one”. When your salary depends on continued and/or increasing production of petroleum, how much noise will you be making about anything else?
Gpumphrey

I’d like to hear the guests address how inflation and a weaker dollar affect oil prices.
http://www.facebook.com/profile.php?id=1125975244 Aaron K. Hallquist

Hofmeister obviously has already forgotten the blowout in the gulf last year; destroy the environment for short term gain. Typical.
BBartel-Providence

Why are lower gas prices desireable? Why do we pretend that we will always have cheap oil and will be able to do whatever we want?
Of course cut the subsidies; we don’t want to pick winners and losers now do we? Few people talk about the big subsidies like the war(s) in Iraq? $2B is a drop in the bucket…but a place to start I suppose.

I say tax the crap out of it, drive up the price of a gallon, add rail lines, and watch how the US population (excuse me, the free market) adjusts. By the way, why do we want to empty our oil fields? Let’s pump others dry first…
- Cory
  
  Why sir, you sound downright un-American!!!
- Ninagraphix
  
  It works in Europe. People actually have access to public transportation and they use it. I used it for over ten years and miss it terribly–I’m now stuck driving (no access to trains) and it’s horrid. People whine that they love the “freedom’ of driving to work–what freedom is there in sitting in traffic for hours of your life? Raise the prices. That will further force the US Auto industry to sell their more fuel efficient Euro versions here (better cars all around btw). And will force the hand of creating public transportation…again (we had it once). It’s time to wake up–30plus years late.
  One issue with your statement–there isn’t enough oil anywhere to keep on the teat. PEAK OIL has passed!
Cory

To the caller with the pickup truck who thinks the solution is more domestic exploration and drilling…

I’m not sure how many times it needs to be said. Oil drilled here is sold ON THE WORLD MARKET! AT THE PREVAILING PRICE!

Unless of course you’d like to nationalize the American petroleum industry?
Deborah Nash

What will punishing the oil companies with fewer tax incentives do to LOWER GAS PRICES anyway?? What will it mean for MY wallet at the pump? From what I’m hearing, it won’t make any difference there.
- Anonymous
  
  I don’t think anybody is saying that it will lower the gasoline price — it will save the government a lot of money, and it will help reduce the deficit. Their incentive is there without any help from the government.
  
  Neil
- Anonymous
  
  Do you not get what you’re saying here? That it’s OK for the oil/gas corporations to get these tax incentives and make record profits.
  From what you’re hearing is an interesting statement. Are you researching what you hear? Are you listening to wrong information?
  Do you question what you hear? Do you find out if it’s the truth or some kind of false rumor?
- Cory
  
  Ms Nash, you are the consumate American. Concerned with yourself and your wallet above all else.
Ninagraphx

The mouthpiece for the industry is incorrect. Our tax dollars go to the oil companies in the form of the war machine working in the Middle East at this very moment.
Dan

Ohmigod, please don’t let anyone like that last caller on again…I listen to this show for informed discourse, not “Well I just don’t care for this at all!”

-dan
Boston, MA
Meg Berlin

Why do we never talk about the kinds of cars we see so many people drive? These immense cars that people seem to feel they’re entitled to drive. I live in a rural state (VT) where we drive everywhere and while you see many people here who have switched to fuel efficient cars ( I drive a diesel car that gets between 35-55 mph) I still see many who drive these cars that take huge amounts of fuel to get from point A to point B. Then you see people who leave their cars running and idling endlessly, wherever they go. But somehow we look at drilling without concern for why we have such a massive, disproportionate need for oil. Then there is the discussion of mass transit and rail systems that were effectively outmoded by the auto industry. Another BIG topic ignored in these discussions.
Flowen

No TaxPayer Subsidy and support for the oil industry, Brian?

I wonder how much you get paid to make a living out of lying?

Shame on you ON Point for inviting a lying scoundrel on your show.
Jhsusak

I am in Cookeville, TN, along with your first caller. The number of big ol’ high powered full-sized pickups, like his, is way, way out of proportion to the number of people who actually need them. Like most government bashers around here – and there are plenty - he is unwilling to do his part to decrease our out-of-control oil dependency. It’s a common stance here that “freedom” means freedom to destroy the country in whatever way one chooses.
- Ninagraphix
  
  I was thinking that as I listened; wondering if he had that F350 for his job as opposed to owning it strictly for asthetics. Where I live folks own them to sit on the parkway in traffic for an hour, just to park in their office parking lot. Well put!
Spike

Oil companies make about 5 cents on a a gallon of gas and the state makes about 50 cents.
So who ought to get their share reduced?
- ThresherK
  
  I don’t know. Do you pave your own road?
  - Cory
    
    ThresherK, I’d like to buy you an ale or lager of your choosing! Bravo!
    - Zing
      
      You have previously described your physical description to us. You have consistently removed all doubt.
Anonymous

How does the Oil industry Profit/$Sales compare to apple? Is Apple the next company to go before congress for price gouging?�
- http://gregorycamp.wordpress.com/ Greg Camp
  
  Does Apple receive government subsidies? If yes, then cut them. But if they don’t, your comment is irrelevant.
  - Anonymous
    
    OK, replace Aaple with McDonalds…. they received government subsadies.
    - http://gregorycamp.wordpress.com/ Greg Camp
      
      By all means, cut subsidies to McDonalds. I think that they’ll survive.
      - Anonymous
        
        Now there is something we can agree on Stop All Obama-Care waivers!
Brian

I used to live in Houston Texas and I needed a car there. They have no quality public transportation, terrible sidewalks (if they are there at all), and everything is incredibly dispersed. A simple trip to the grocery store required a car, hands down. Needless to say, I went through a lot of gas while I lived there.

I now live in Boston MA and I have recently sold my car! I take the T everywhere; to work, the movies, even the grocery store. In the few occasions when I need a car (large shopping or a fishing trip), there is Zip car or car rental agencies. If the government spent more of their tax incentives on improving public transportation rather than the oil companies, we would have a significantly lower demand for the oil and help us step forward to “energy independence”.
- Kurt
  
  Texas is OIL COUNTRY, son. It’s different land. Bush land. No need for sidewalks. A chicken in every pot, an oil pump in every back yard.
Jane

Will the API tax advisor explain why the industry he supports and the GOP think it is okay for American citizens to carry the burden of tax increases, program cuts, the sacrifice of the military lives who protect oil interests, while his industry carries no burden but the large profits.
Amanda Takemoto

Does anyone really think anything besides greed motivates the oil companies?
- Anonymous
  
  I believe the oil companies have the same motives as Apple, Kraft, and Mattel? Do you believe these companies are motivated by greed?
  - ThresherK
    
    Apple, Kraft, and Mattel don’t wrap themselves in the flag when it suits them and threaten to bring the country down if their fee-fees get hurt. They don’t sit idly by and encourage ignorant talk about how iPod headphones, string cheese or Barbie outfits are national when it suits them, and international when it doesn’t.
BHA in Vermont

I thought the Republicans and Tea Partiers were trying to get the government to spend less money. Isn’t $2 Billion money? Shouldn’t we NOT give tax breaks to people who do not need them? Heck, the above parties don’t want to give money to those who DO need it. Oh, right, cutting out a tax break is a tax hike and therefore anathema to those parties. Don’t spend it and don’t take it in, sing “Don’t worry, be happy”.

And to the point of tax breaks vs credits, the oil industry caller said (in so many words) get rid of the ethanol subsidies since they DO cost taxpayer A money (both with the subsidy AND the need to use more fuel when it is contains ethanol). Also get rid of the flex-fuel tax credits. Another “money from Taxpayer A” into the pocket of auto companies who make vehicles that CAN run on E85 but 95% of those made will NEVER USE ANY E85. Oh, wait, a tax credit just reduces the auto company’s taxes so it isn’t like taxpayer A is GIVING them money, right? Taxpayer A just has to pay more taxes to make up the difference. WAY different.
Sawyerfarm2006

Where is the shortage of oil or gas? PLease explain how gas is more expensive now at 100 Dollars a barrel than a couple of years ago at $140.00.
Ken

The oil companies claim that they deserve the tax breaks
because they create jobs. By that logic every industry that create jobs should
get breaks. I think that all those incentives need to be scaled way down and
stop giving breaks to companies that move jobs overseas. Encourage alternative
energy use in any way practical everywhere in our society. There is no one
answer that works everywhere but we must move forward to reduce our dependency
on oil.
Peter D

What about BIG oils consistent efforts to thwart or minimize the emergence of alternative energy technologies that might, one day, compete with fossil fuel technologies? It’s alright to insinuate that the lifeblood of the nation is gas/oil – which I do not dispute – but there was a recent report that unless we curb “greenhouse” gases, we are dooming future generations of humans – not to mention all other living creatures – to drastic climate changes. WHY ISN’T THIS A PART OF TODAY’S CONVERSATION?
BBartel-Providence

Amanda, Do you really think anything besides greed/profits motivates any company?
Anonymous

Your guest just listed some 3rd world countries that we import oil from. How much of our imports come from the list she gave? 5%? 1%?�
�
Most of our evil imported oil comes from Canada! What do you have against our neighbors to the north?
- Jhsusak
  
  Here’s a related question – how much of our national budget do we spend supporting regimes and military actions in 3rd world countries so that we can import this 5% or 1% of our oil? Even better, how much money, in dollars, is 5% of the amount we pay for oil?
- Anonymous
  
  Not in the East coast. However the comment was about exploitation, which is a real problem in the countries mentioned. Try to think on more than one level. By the way the oil you are talking about from Canada is shale oil and the environmental issues surrounding this are huge.
Coralie

Speaking of having an honest conversation, is it a realistic example to say drilling companies will move from recouping 100% of costs in ONE year to 30-40 years? Or is there not some exaggeration there as well?
-Coralie
Nashville, TN
Coralie

Speaking of having an honest conversation, is it a realistic example to say drilling companies will move from recouping 100% of costs in ONE year to 30-40 years? Or is there not some exaggeration there as well?
-Coralie
Nashville, TN
Frenchyt

I follow the news from Scandinavia and note that virtually every day there are news items about the growing Norwegian oil industry. Norway is actively drilling in the Arctic. Are we buying oil from them? I never hear Norway mentioned in the conversation and yet they are major providers while not providing the knee jerk negative reaction when we talk about the unstable Mideast. Norway is about as stable a country as you can get. If we’re not buying from them, why not?
Anonymous

The Chevy Volt is rated on the EPA Combined at 93MPGe.
The Nissan Leaf is rated on the EPA Combined at 99MPGe.
The Edison2 Very Light Car (that won the X-Prize) is rated at 110MPGe.
The Illuminati Motors Seven on the EPA Combined at 207MPGe.

I am designing a 5 seat electric car called CarBEN EV that should have a 300-400 miles range, and it should be 200-300MPGe. Here’s my blog post on the open source design:

http://neilblanchard.blogspot.com/2011/03/carben-ev-open-source-project-part-4.html

We need to reduce demand for oil. Oil is finite. Electricity is virtually infinite, and it can easily be made using many different renewable sources.

Neil
http://gregorycamp.wordpress.com/ Greg Camp

Drill, drill, drill–don’t these oil industry people understand that oil is a finite resource? It’s like a single barrel. We can keep putting holes in the barrel, but that won’t create new oil.
- ThresherK
  
  Oh, they know it’s a finite resource. The bother is that the more expensive it (and any petroleum) gets, the more “feasible” it is to go through hell (tar sands, fracking, etc) to get it.
  
  It’s not their job to care about us, and all the applauding dolphin image ads in the world won’t change that.
  
  For my money, we should have already been planning to stop their cartel infecting the next big ramped-up source of energy. The whale titans didn’t become the oil barons.
BHA in Vermont

Yep – China and India, ESPECIALLY CHINA, are going to use a LOT more in the future.

That is why we need to USE LESS not DRILL MORE
- Anonymous
  
  If we drill more we can proffit from it and create thousands of US jobs and export the oil to China!
  - http://gregorycamp.wordpress.com/ Greg Camp
    
    Where are we going to drill? There are X barrels of oil in the world. I don’t know how big X is, but it’s a finite number. The more we drill and the more we use, the sooner X will be reduced to zero.
    - Anonymous
      
      We should use it now because in 100 years we will have technology that will make oil far less needed.
Sijie Wang

Wow, what a dishonest conversation!

-The oil exec somehow claiming that expanded oil production will end our deficit. What?

-The guy somehow turning “subsidize” into “taking money from taxpayer A to company B” when it was clearly used in a colloquial sense. It was even worse that the woman on the show did not call him out on his overly literal definition, since she clearly said we “subsidize” in the sense of providing significant military protection, very low prices to access federal lands, and even (I would argue) our outsized emphasis on road construction vs. rail development to continually stimulate demand.

-The oil exec claiming that we could produce 3M barrels/day and significantly reduce oil prices when global oil demand is over 60M barrels/day and rising rapidly. It WILL NOT significantly impact oil prices. It WILL put billions of extra dollars into oil company coffers.

-The silly guy from Tennessee making the logical jump of “shared sacrifice” is somehow Marxism?? If he’s got a problem with oil prices, he could easily buy a second 4 cylinder car with some of the money he spends filling an F250.

Someone please call these clowns out so we can have a real conversation.
Enhabit

not enough of this conversation is accounting for the 33%+ of the federal budget that goes to defense…the largest defense budget by far on the planet…one that is deployed for the most part in support of the flow of and stability of oil and keeping it cheaper here than elsewhere…we are doomed to fail if we can not get off our unaffordable dependence on oil.
Bob

The tax breaks are tiny compared to the massive costs that oil companies externalize, and the US government pays, in the form of providing security to the supply of oil. Every few years, we trade the lives of US soldiers fighting in the mid East so that we can burn cheap gasoline at home. The prices of oil-based products do not reflect these costs, but our tax bills sure do (and will, to a far greater extent, when we decide to stop borrowing to pay for the wars.) Once the prices include all costs, the energy ‘crises’ disappears! Alternatives will become economically viable. In the long run, oil prices will likely go down, following the decline of demand. And the mid East trouble makers will have far less money to fund their campaigns of aggression.
Printjunky

Everyone should keep in mind that oil is still not really even close to it’s historical high (adjusted for inflation) price. Bigger picture concerns (environment, sustainability, culture, etc) are a valid jumping-ff point for discussion, but a discussion where an F-250 driver is bitching about gas prices is totally lame. Contextually, gas prices are LOW. The discussion of such is merely adding to the political haymaking.
Realist

The inconvenient truth is that we need high gas prices to motivate the private sector to work on conservation and alternative energy. I have been working in this area for years and every time we think that we think our technologies are affordable oil prices go down (how about that?). I do agree that the issue of a few billion in subsidies is a red herring.

I have some PR advice for the oil companies. The oil companies largely hire from the south and the west. They might want to try recruiting for workers here in the Northeast. Share the wealth!
Flowen

John: your interests are clearly the oil companies interests.

The oil companies and the government are the population’s enemies when they maintain the national addiction to oil, gasoline, cars, and commercial air travel.

The only way to reduce demand is if gasoline and energy prices rise. IT IS THE ONLY WAY. It is already happening at only $4/gallon.

The oil companies benefit from short term price spikes, like now, making windfalls and scaring the population into authorizing more drilling…even when supply is not the cause of these high prices!

But in the long term, the oil companies need, and keep prices low to optimize and stimulate demand. The last thing the oil companies want is sustained high prices, which result in irreversible “demand destruction.”

Yet high prices stimulate innovation, create jobs, limit off-shoring, conservation, and reduce environmental degradation.

John’s “affordable prices” cause obvious environmental damage and catastrophe (even if the media spotlight is elsewhere), bad health (people kill themselves by sitting in their cars running in a closed garage), national cash drain, much out-of-country, and such a slanted playing field that money just falls out of consumer’s pockets into the oily, greasy, bloody hands of the oil industry and their political whores.
Dan

Explain, if they the Oil companies do not make a lot money, then,why do they have Billion Dollar Profits, can they helps us to pay off some of the Debt, Any comments?? What is wrong with sharing in the Burden.
- Anonymous
  
  GE would have a better chance of doing so and since they don’t pay any taxes this confiscation would put them on par with where the Oil companies are today.
Jim in Omaha

I couldn’t wait on hold long enough to get on the air, but I wanted to ask the experts if “our” oil, that the oil companies are allowed to extract at one of the lowest lease rates in the world, should be required to be sold to us, and not to the highest global bidder, who may actually be our enemy?
Anonymous

It’s very clear to me after listening to this show and reading some of the comments on this forum how uninformed a lot of people are.
One thing that I was a little perplexed about in today’s show was how the facts of how oil is sold did not come into the conversation very much. I w as also stunned on how the current price issue was not discussed at very much. It’s all due to speculation and not production.
I’m not sure how drilling for more oil on our own shores or land will effect the international price of oil. What is a given is that oil companies would be making more profits from the oil. The Midwest, Southwest and a lot of the West is using Gulf and Canadian oil. The East coast is getting it from Europe and or the Middle East. The price of oil and gasoline is still controlled by the commodity market and speculation. I did not hear anyone address this point. Unless our oil companies were nationalized how would drilling for more oil make it cheaper here?

On other thing that was not addresses was how there has been no investment in new refineries for gasoline and diesel in years. The oil corporations have made huge profits and yet they have not done much on this front. I’m curious as to why this was not brought up?
Dana Franchitto

I couldn’t her the whole show but it sounds like it heavily favored the Oil industry. While ms Margonelli made some good points, I felt that a true citizens advocate like Ralph Nader or Former Sec. of State Robert Reich should have been on to truly spell the specifics that expose the oil industy’s greed. Also to counter Brian Johnson’s and John Hoffmeister’s pro industry rhetoric. It is not to “ON Points’ credit that crucial views were missing from this hour.
margaret/omaha, ne

Look who you have on the show to discuss the pricing and subsidies on oil. These are men who profit from the industry. If we pay attention we will realize the money Taxpayers give in at the pumps, to their city and states and Federal subsidies we will never be a country who can grow but constantly will be under the thumb of oil.
We can’t end our oil relationship at this time but as long as we support the industry at the high cost they demand our country developing new and renewable energy investment will not progress.
US infrastructure and growth in updating grids to our homes will never be created. Compared to Germany or Netherlands we will be a third world energy nation.
W E Howell

For all of those people who are so concerned about cutting government spending, and keeping in mind the very large profits the oil companies are experiencing, stop the subsidies ! William Howell
Iowa Bob

Terrible biased show. All oil company all the time. Presenting former execs and hired PR flacs against one poor nervous woman (who had her facts straight nonetheless) was piling on. These are not “our” oil companies but gigantic international profit making machines that care nothing about the future of the US-only about profits. Tax them good!
ohiolibrarian

The oil subsidies appear to be intended to cover oil company costs of doing business. It might be one thing to subsidize a company that is producing a vital product if their margins were small or they were just getting up to speed (such as wind or solar), but it is ridiculous to subsidize a mature industry that is making large profits.

Do these people not understand how capitalism is supposed to function?
- Joshua Hendrickson
  
  Sure they do–capitalism is supposed to leach every dime out of every source, share the costs with the public, and hog the profits. Any notion that capitalism is supposed to be fair and equitable just misses the point: money is the ultimate illusion in service of power, and as long as we believe in that we will never have a humane world to live in.
- Zing
  
  Did you listen to the program? Or is Brian Johnson just a liar?
mdccohen

The premise of your article is incorrect. Oil and natural gas companies receive no subsidies and do not receive any special tax breaks. Every deduction or
credit S. 940 proposes to revoke or limit currently applies to all companies, not just oil companies. The foreign tax credit allows American
companies to remain competitive abroad. Sec. 199, a deduction available
to nearly every domestic manufacturer, was implemented to spur domestic
job growth. The proposal is not to “end subsidies” or to end “special tax breaks”, but is to single out oil companies and deny them the tax deductions that are available to all other companies. Shame on all of these “journalists” who have framed the issue in a obviously biased way.
- Anonymous
  
  I’m crying crocodile tears for those oil companies.
- William
  
  I remember reading how Google was really scamming on taxes via Ireland.
- kyzipster
  
  Actually the discussion brought up some very good points, one of which is that the US receives almost no money for the oil removed from public lands. The more liberal commentator agreed that the tax subsidies under debate are mostly political and meaningless but pointed out some much larger dollar figures that we could go after to help with the debt.
- http://www.ecoevolution.org Ian G
  
  Whatever you call it, a revocation of policies that funnel public money or waive contributions are tantamount to subsidies. The oil companies are not like most companies, they receive indirect goods, services, and exemptions that benefit their business that are exorbitantly expensive (infrastructure support, military support) and write off responsibility for externalities that the public (and other companies) has to foot the bill for, like pollution, climate-change damage, health impact, etc. This free ride is a good gig, so it is understandable that they don’t want to see it end, but they ARE getting subsidies and tax breaks.
- Publius
  
  And which Oil Company do you work for?????
http://RichGriese.NET Rich Griese

It says a lot that in this economic crisis that the Republicans handed the US over three years ago, that neither party can take way these give aways to the oil companies. While Republicans are trying to eliminate almost all social programs, they continue to give bucket loads of money to the oil companies.
Marka

They need the tax breaks so they can have more money to pay off who they need to get their way!
William

Obama took a lot of oil money so why is he complaining?
Bethhstone

An oil company recently sent me a request to lease my land 20 acres, to drill for gas/oil You know what they want to pay per acre for that privilage?? 5 dollars. they do not need tax subsities This was a shock….
Anonymous

The oil industry is raising the spectre of price increases as a tactic to discourage a vote to end subsidies. I’m a commuting college student so I’m one of those who are least able to afford an increase at the pump. But let’s get honest – there is an inherent price to be paid for energy. Whether Joe Taxpayer is paying for his gas partially though his taxes and partially at the pump or whether he is paying everything up front at the pump he is still paying that price. One of the key factors in alternative (and renewable) energy is its current high price. But a leveling of the playing field by the removal of subsidies provides more of a market for those alternative energies. Along with technologies to reduce energy demand, the removal of subsidies would at the very least not hurt the processes of new job creation and innovation in the energy sector.
Zing

I’m sure there have been shows with less shelf life, but I can’t think of one.

On the other hand, I can’t wait for Sen Brown’s tax incentives to bring manufacturing jobs back from overseas.
Scottalee48

Like many others… i agree that the only cure for high fuel prices is HIGH FUEL PRICES… if any of you get a chance look at bio-diesel made from algea. http://www.oilgae.com/club this could provide our entire nation with a reliable home grown solution with additional benefits of using carbon dioxide from coal power plants and waste water products to actually feed these algea microbes.There is a reason that big oil is investing hundreds of millions of dollars in the R&D of this… so they can patent and shelf the intelectual property as they have done with so many other great inventions that could benefit society. Now that i think about it… the money that big oil is putting into this R&D is probably coming from govt subsidies… now i feel better..LOL!
Steve Evans

Has anyone mentioned probably the bigest subsidy of all? … our military presence in the middle east. Defending our RIGHT to buy oil from our enemys at $100/barrel. I have driven converted electric cars for commuting for 15 years and made my own biodiesel for 10. No thanks OPEC.
Harry Irwin

How can you have an entire show about Tax Incentives for Big Oil, energy independence and the price of oil without ever mentioning climate change which is the biggest issue when discussing fossil fuels?
Yar

Lisa Margonelli made an important statement at about 42 minutes into the podcast. ” A family of 4 making 50,000 dollars spends 8,000 dollars on transportation”, add to that childcare so both parents can work outside of the home and both parents become slaves to an exploitive workforce. We have to rethink our family values. A home based business that allows one spouse to care for the kids is most often a better model than the long commuting family where all the extra income goes into the gas tank. There are complex reasons why we are in the two income family trap, but we are losing our families because of it. If we damage the family any further we may lose our nation. The family unit is the basic unit of a stable society., add to that childcare so both parents can work outside of the home and both parents become slaves to an exploitive workforce. We have to rethink our family values. A home based business that allows one spouse to care for the kids is most often a better model than the long commuting family where all the extra income goes into the gas tank. There are complex reasons why we are in the two income family trap, but we are losing our families because of it. If we damage the family any further we may lose our nation. The family unit is the basic unit of a stable society.
kyzipster

Why do conservatives always talk about “our oil” like we’re Venezuela. It goes on the world market for pricing, we sell it to the highest bidder. If they’re really talking about socializing our natural resources, we should talk.
Chad

This is the issue: most people are ignorant about the simple economic distinction between profits and profit margin. The President and other politicians exploit this ignorance for their own political benefit.
Emmanuel

This had to have been one of the weakest links in an otherwise strong chain of On Points lately. It may be too much to expect substitute hosts to measure up to Tom Ashbrook’s interrogatory acumen, but I’d suggest that NPR can do better than Ms. Amos’ buckling performance. I’m sure it’s not always easy to line up guests whose views will speak to each other. With two practiced oil industry mouthpieces dominating the discussion rhetorically, Tom would have known to compensate for Lisa Morganelli’s stuttered, inarticulate, and unengaging commentary (a fine analyst, on paper she may be, but she’s clearly not a honed public speaker). It can’t be easy to address such heterogeneous subjects, but it’s disappointing when you fail at really big and consequential ones like oil, deficits, war, and the future of energy.
Anonymous

The republicans in the senate refuse to pass a the bill removing tax credits for the oil corporations. Guess we shall see their coffers thickening with this industries cash.
Jim Alford

The oil company’s “accountant” embarrassed himself when he claimed the profits in oil were “only” 6 cents on the sales dollar. This is a meaningless detail. RETURN ON EQUITY is what matters to business people. Grocery chains claimed for decades that they made 1 cent profit on each sales dollars but their ROE’s were usually about 8%. That was when a passbook savings account returned about 3% BEFORE TAXES.

No one took him up on this popular smoke screen and we are all the poorer for it
- Norm
  
  Bad company trying to earn money! Bad, Bad, Bad! How dare they sell their product for a profit!
http://charleszigmund.com CZigmund

Didn’t hear the entire show, but most of it. Couldn’t believe that the greenhouse environmental impact of another thirty or forty years of full-out carbon-dioxide emitting oil burning was NOT EVEN MENTIONED ONCE. We have ALREADY created a climate monster, and can only saddle our poor descendents with more and more intractable climate problems if we do nothing about it but pollute further, and here on this show we debate nothing but the economics and geopolitics of the oil issue. Our current greed and overwhelming need to maintain our economy trump everything for hundreds of years into the future. That is the scariest thing that came out of the broadcast — and not a word about it. How about a show about this!!??
Publius

If the Democrats had a backbone they would refuse to cut a single dollar from Social programs as long as the Republicans (who are screaming that the sky is falling because of the deficit) refuse to eliminate these subsidies for their fat cat contributors. How do these people sleep at night while cutting funding to programs that provide free formula for the babies of poor people while protecting billion dollar subsidies to an industry making $125 billion a year??????
Cabmanjohnny

Quit trying to punish those oil corps for our own bad behavior. Besides, they can buy all the political favors we cannot. When was the last time you used mass transportation? Would you-could you even? What do you drive, how much do you drive, and did any of you that remember the oil embargo-gas lines buy one of those monster vehicles thirty years later? Blogger Jim Kunstler has it right; oil addiction will just continue to get more vicious, more consumptive of national wealth, and escalate resource conflict, political entropy and viable alternatives. Your own oil product use and conservation is your only power in this mess.
Bin

We should not have the oil companies paraded on Capitol Hill explaining why they are making such profits. After all, this is their mandate. You don’t parade foxes to explain where the chickens went.

We need to parade the lobbyists and the rotten sold-out politicians that fail to regulate and tax business appropriately.
John Chaplin

One thing people need to remember in the Oil debate is that oil is used in so many different industries in so many different ways it is hard to comprehend. Carbon is one of the most reactive elements in the universe and Oil is basically carbon with a few other elements hanging off it it. Oil is used in plastics, asphalt etc (http://www.ranken-energy.com/Products%20from%20Petroleum.htm) everyday things.

As many have stated here, we WILL run out of oil someday in the not to distant future. If that happens we will lose all of those products we depend on.

We need to lower our demand for oil as a fuel so that we can use it for other products that we depend on.

The oil industry should not be subsidized mainly because they don’t need it anymore. Industries such as the Solar or Wind power need subsidies to encourage investment and R+D of new products.
- Ron Gilmer
  
  sounds good!
Pingback: Tax Incentives for Big Oil | NPR | American Think Tank

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