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Giveaways for Big Oil, Big Deficits for Americans
Sometimes it’s hard to figure out what’s going on in American policymaking. You get pieces of the picture, but it’s hard to put the puzzle together. Take for example, passage of the recent energy bill in Washington. As the battle for Iraq raged, the US Congress passed an energy bill. In a speech last week, President Bush stated, “ We should have developed a strategy that would help us diversify away from foreign sources of oil. And finally, after years of work, I'm proud to announce I'll be signing next week a comprehensive energy bill.” But what does this “comprehensive energy bill” do? Does it do anything to deal with gasoline prices? No. Does it provide significantly new subsidies for solar or wind power? No. Does it help to radically reduce greenhouse gases that contribute to global warming? Nope. So when the President says “comprehensive” what is he talking about? One way to tell is to identify the big winners in the bill. The energy bill includes at least $4 billion in subsidies and tax breaks for the oil industry, which is reaping enormous windfalls at a time of rising oil and gasoline prices. Do these companies need financial incentives to drill for more oil? No way, the oil companies reap enormous profits even without these new subsidies. Between April and June of 2005, oil giants BP and ConocoPhillips recorded profits of $5 billion and $3.1 billion respectively. ExxonMobil’s second quarter profits of almost $8 billion gave the company more than $15 billion in profits for the first half of 2005 alone. This adds to the company’s record-breaking profits of $24 billion in 2004. Giving oil companies more money hardly seems like a good use of tax dollars – particularly with the nation wracking up record deficits. But the giveaways to the oil industry are not all that’s in the law. There are also cradle-to grave subsidies for the nuclear industry, which cannot compete without government handouts. This bad policy creates more nuclear waste and increases the risk of nuclear proliferation while retarding the development of the alternative, renewable energy sources of the future. And the law ignores stronger fuel economy standards – a proven, commonsense way to curb consumption very significantly and very quickly. So in a way, the new law is truly “comprehensive” – in the fact that it weakens the nation’s finances, degrades the environment, erodes consumer protections and gives short shrift to future technologies. The nation deserves better than this type of misguided legislation. Instead of making the nation safer, it makes it more vulnerable. Policy objectives such as reducing reliance on foreign oil and increased reliance on more environmentally friendly decentralized power would make more sense. Instead the President and the Congress are intent on turning back the clock and employing past policies that focus on developing more fossil fuel and nuclear power, while enriching the planet’s wealthiest corporations at the price of a higher national deficit and a worsening environment. America’s major economic competitors, on the other hand, are moving in a different direction: diversifying their energy supplies – and focusing on new technologies. For example, Germany consumes 39 percent of all solar panels in the world, with Japan next at 30 percent and the United States a distant third with 9 percent. The Bush Administration has taken a head in the sand approach. The President’s energy vision seems to be one that ignores global warming, ignores skyrocketing gasoline prices, and ignores world instability. The picture emerging in this puzzle is one that will cause problems for decades to come – a picture that shows a reckless disregard for science, a cavalier attitude toward the nation’s financial soundness and a profound lack of vision. It’s a picture that illustrates how bad policies can exacerbate real problems, instead of solving them. That’s all for now. I’ll be keeping an eye on the Capitol and will talk to you again next week.
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