Today, Congressman Tim Bishop continued his leadership on energy issues by introducing a comprehensive energy bill to protect American consumers from high gas prices and reduce the deficit by repealing unwarranted tax breaks for Big Oil. Bishop unveiled his legislation on a day when oil prices fell by approximately 10 percent, demonstrating how broken the oil market is.
Bishop is lead sponsor of the Taxpayer and Gas Price Relief Act (H.R. 1748), a comprehensive energy bill containing the provisions of Bishop's Big Oil Welfare Repeal Act (H.R. 1689) ending other taxpayer funded giveaways, which in combination will end corporate welfare for the Big Five oil companies and reduce the deficit by nearly $31 billion over ten years.
"Right now, Big Oil has its hand in the consumer's left pocket every day they fill up, and their right pocket on tax day," said Congressman Bishop. "Repealing the subsidies will not affect prices at the pump, but it will end the outrageous practice of giving nearly 3 billion taxpayer dollars a year to wildly profitable corporations. Make no mistake, these billion dollar giveaways to Big Oil do nothing, repeat nothing, to lower oil prices."
Oil is traded on a global market and each barrel of crude is sold for the same price, regardless of how much its production was subsidized. Producers receiving tax subsidies pass on that benefit to their shareholders, not to consumers. A recent report showed that last year, the largest oil companies spent 60 percent of their profits on dividends and stock repurchases, and just 18 percent on exploration.
Republicans defeated a motion today to bring the Big Oil Welfare Repeal Act to the House floor, and instead will pass legislation focused exclusively on drilling new offshore wells.
"It's 'Drill Baby Drill' deja vu on the House Floor, and focusing exclusively on drilling will just get us into a bigger energy hole," said Bishop. "The fact that oil went down approximately 10 percent on Thursday demonstrates that the fundamentals of the oil market are broken. We need a comprehensive approach, otherwise, we'll constantly have repeating cycles of price spikes and dips."
To help consumers in the short-term, H.R. 1748 expands the President's authority to release oil from the Strategic Petroleum Reserve (SPR) to fight back against market manipulation and speculation. Bishop's bill calls for a temporary release of 30 million barrels of crude (about 5% of the total reserve) from the SPR to bring down oil prices in the short term. Releasing oil from the SPR has a proven record of reducing prices, including a 33 percent drop when President George H.W. Bush tapped the reserve during the Gulf War.
In addition, a royalty reform provision in the legislation will make oil companies pay their fair share to the American people for the oil they have extracted from public lands. Loopholes in current law allow drilling without any royalties in certain areas, and could cost American taxpayers up to $53 billion over the next 25 years. The legislation will also empower the Federal Trade Commission (FTC) and state attorneys general to institute civil and criminal penalties for fuel price gouging.
All told, the Taxpayer and Gas Price Relief Act would bring in at least $33 billion to the Treasury over ten years to responsibly reduce the deficit. Repealing oil subsidies will also remove a distortion of the energy market that is detrimental to America's long-term energy security and also inconsistent with goals of creating a clean energy economy, reducing America's reliance on oil, and eliminating pollution.
Bishop will discuss his comprehensive bill and continuing Democratic action on energy on C-SPAN's Washington Journal tomorrow, Friday, May 6. Bishop will appear live from 8:30 to 9:15 AM on the CSPAN-1 television station, XM Radio Channel 119, and streaming on CSPAN.org.