The U.S. gives away billions of dollars annually to coal, oil and gas companies. But they seem to be doing alright, after all, five of the top oil companies (ExxonMobil, Shell, Chevron, BP and ConocoPhilips) made $1 trillion over the last decade. Not only are U.S. taxpayers paying at the pump, their taxes are also being used to help subsidize the oil companies' profits. There are some people who think that’s wrong. Among them, Sen. Bernie Sanders (I-Vt.) and Rep. Keith Ellison (D-Minn.) who introduced legislation, dubbed “The End Polluter Welfare Act of 2013,” on Nov. 22 to cut the tax loopholes and subsidies for the oil, gas and coal industries.
“The five biggest oil companies made $23 billion in the third quarter of 2013 alone. They don’t need any more tax giveaways,” Ellison said. “We should invest in the American people by creating good jobs and ending cuts to food assistance instead of throwing tens of billions of taxpayer dollars at one of the biggest and most profitable industries in the world.”
One of the best places to invest in is newer energy technologies, like solar power. Time and time again, solar has proven to be a major (and fast growing) jobs provider, particularly for residential solar and commercial solar, where hands are needed on and off the roof to complete installations quickly and efficiently. Since 2005, the solar industry has grown from about 15,000 employees in the U.S. to 120,000 employees. That’s a significant growth rate in under a decade, demonstrating the power of increasing access to a new industry.
The legislation, according to Sanders’ office, would remove tax breaks, close loopholes, end taxpayer-funded fossil fuel research and prevent companies from escaping liability for spills or deducting cleanup costs (this means companies like BP wouldn’t be as protected from liabilities related to the Deepwater Horizon oil spill). “Under current law, these subsidies are expected to cost taxpayers more than $100 billion in the coming decade,” Sanders’ office said.
Comparatively, solar and wind have received very little incentives. A DBL Investors report in 2011, “What Would Jefferson Do?: The Historical Role of Federal Subsidies in Shaping America’s Energy Future” took on the difficult task of trying to compare the amounts of subsidies offered to fossil fuels and nuclear energy as compared to renewable energy like wind and solar. It found that on a comparative basis during the early years for each energy source, fossil fuels and nuclear got far more in terms of government subsidies than solar and wind have.
“In inflation-adjusted dollars, nuclear spending averaged $3.3 billion over the first 15 years of subsidy life, and O&G subsidies averaged $1.8 billion, while renewables averaged less than $0.4 billion,” according to the study.
Looking at the period between 2000 and 2010, federal energy research and development subsidies still benefitted fossil fuels and nuclear energy far more than they did for wind or solar energy. According to the DBL report, fossil energy received 27.7 percent of funding, while nuclear energy saw 23.2 percent. Renewable energy, on the other hand, saw 16.8 percent of new federal research and development spending.
That report also looked to a then recent New York Times article, which claimed that eliminating a domestic manufacturing tax deduction for big oil companies would result in more than $12 billion in government savings and another $6 billion in savings could have been generated by ending deductions for taxes paid to foreign governments. That article, “Senate Refuses to End Tax Breaks for Big Oil,” was related to a similar bill to end subsidies or tax breaks to big oil companies. However, the bill was defeated.
This has often been the fate of such legislation. While the newly introduced bills have support from advocacy groups like 350.org, Oil Change International, Taxpayers for Common Sense and others, it’s doubtful that such legislation could make it through the Republican-controlled House even though Republicans advocate for tax reductions on a regular basis.