Following President Obama's call for an extension of clean energy tax incentives, U.S. Senators Robert Menendez (D-NJ) and Debbie Stabenow (D-MI) today are touting their Repeal Big Oil Tax Subsidies Act as the solution. The bill would end wasteful taxpayer handouts to Big Oil and use those savings to extend expiring energy tax credits and lower the deficit. Obama visited a wind energy company in Iowa yesterday to call on Congress to invest in affordable, clean energy which would reduce our reliance on foreign oil and create thousands of jobs. In March, a majority of the Senate voted in favor of the Senators' bill, but it was blocked by a Republican filibuster.
"Last year, the Big 5 Oil Companies took $2.4 billion in taxpayer handouts and saw their profits reach $137 billion," said Menendez. "Not only could we put a stop to these wasteful tax breaks today, we could use the savings to invest in renewable energy technologies that will create jobs, save money for middle class families, and put America out front in the clean energy race. It's time to check this off the "to do list'."
"We have families that are paying as much for gasoline at the pump as they are paying for their groceries to put food on the table," said Senator Stabenow. "And taxpayers are actually paying major oil companies twice, both at the pump and then again with taxpayer subsidies. It's time to cut these giveaways to big oil so we can reduce the deficit and invest in the clean energy jobs of the future."
Over the last decade, the Big 5 (BP, Exxon, Shell, Chevron, and ConocoPhillips) have enjoyed nearly $1 trillion in profits and tens of billions of dollars in taxpayer subsidies. Last year alone the Big 5 amassed $137 billion in profits while at the same time, last year these five companies actually produced 4 percent less oil.
The bill extends tax credits for biodiesel, cellulosic ethanol, and alternative fuels such as natural gas and propane. It also extends important tax credits for wind, efficiency, and some fossil fuel incentives as well. The rest of the savings will be dedicated to deficit reduction.
Specifically, The Repeal Big Oil Tax Subsides Act:
Repeals More Than $20 billion in Taxpayer Subsidies to the Five Major Oil Companies. The Repeal Big Oil Tax Subsidies Act would stop half-a-dozen tax breaks from going to the "major integrated oil companies" - the five biggest, most profitable private sector companies. These subsidies include provisions that allow Big Oil to claim foreign royalty payments as a credit against U.S. taxes, take a manufacturing deduction for oil production, take a deduction for the cost of developing wells, take a deduction of oil and gas revenues, immediately deduct the cost of materials used to recover oil from wells, and receive relief from royalties owed on production from the Outer Continental Shelf. Ending these subsidies for Big Oil would save nearly $24 billion over ten years.
Invests in Clean Energy Technologies. The Repeal Big Oil Tax Subsidies Act uses the savings from tax subsidies that currently go to companies making record profits to invest in job-creating, clean energy technologies like advanced vehicles, wind, solar, and biofuels. These investments include successful programs to provide grants in lieu of tax credits for renewable power projects, tax credits for electricity produced from wind, biomass, geothermal, and solar, tax credits for clean energy technology manufacturing facilities, as well as tax credits for electric vehicles, biofuels, manufacturing of efficient appliances, and energy efficient home building and upgrades. These investments would total more than $11 billion over ten years.
Reduces the Deficit. The remaining savings from repealing taxpayer subsidies for the biggest private sector oil companies would be dedicated to reducing the deficit.
In Newton, Iowa the President highlighted the need to reduce our reliance on foreign oil and develop more secure domestic energy sources by investing in clean energy manufacturing. He called on Congress to pass legislation that will extend the PTC to support American jobs and manufacturing in the wind industry alongside an expansion of the 48C Advanced Energy Manufacturing Tax Credit that supports American-made clean energy manufacturing. According to industry estimates, the wind industry supports nearly 20,000 direct jobs along with over 30,000 manufacturing jobs in its supply chain. These credits have played an important role in fueling that job creation, and as a result have strong bipartisan support from Governors, Members of Congress, as well as industry.