New Bill Unveiled to Kill $113 Billion in Fossil Fuel Subsidies
Oil Change International/CC BY 2.0
Today, Senator Bernie Sanders (I-VT) is unveiling a bill, the "End Polluter Welfare Act," that would pretty much eliminate federal fossil fuel subsidies as we know them. The ambitious proposal would remove the seemingly bottomless well of dubious handouts for the oil, coal, and natural gas industries, and expand fossil fuels companies' responsibility to pay for energy disasters like oil spills. In total, the bill would cut $113 billion in subsidies over the next ten years.
Representative Keith Ellison (D-MN) will be taking up the legislation in the House of Representatives. The bill was announced today in Washington D.C., at a rally put on by 350.org.
The sheer size of the proposed cuts makes this bill exceptionally commendable. Sen. Robert Menendez's subsidies-killing bill, which recently garnered majority support but fail to reach a filibuster-proof 60 votes in the Senate, just targeted the five largest oil companies. It topped out at scrapping $24 billion over 10 years. Obama's effort to gut subsidies last year aimed for stripping just $46 billion. This is a true stab at ending fossil fuel subsidies in full.
Beyond that, there are other interesting facets of the bill:
- It closes a 2004 loophole that lets oil companies claim they're manufacturers, and therefore eligible for a deduction credit aimed at the manufacturing industry (worth $12 billion).
- It calls for a penny per barrel increase to go to the oil spill fund, in light of the Gulf Spill, and applies the spill fund tax to any tar sands production (ie, Keystone). Right now, companies producing tar sands don't have to cough up any cash to help cover the costs of their (inevitable) accidents.
- It prevents oil companies from deducting their oil spill cleanup costs, as BP has done since its 2010 disaster. If oil giants weren't allowed to write off the costs of cleaning up the disasters they caused, it would save American taxpayers $6.8 billion.
70% of Americans oppose fossil fuel subsidies, and President Obama has made taking oil companies to task a cornerstone of his early reelection campaign. The bill could give Obama an opportunity to continue to hammer his message that oil companies with record profits don't need to be taking taxpayer dollars.
The fact that the federal government gives multibillion dollar handouts to some of the nation's most profitable companies doesn't sit well with anyone except the oil industry and the politicians who love it. Sanders and Ellison are right to apply some pressure, and to bring the issue to the fore.
Because the problem with oil subsidies, is they just don't die. They're practically politically invincible, thanks to the towering influence of oil in Congress. Sanders nor Ellison are unlikely to find the votes necessary to get their bill off the ground—the oil industry is too good at pouring its resources into campaign coffers and its lobbying efforts. Even if the rest of America hates fossil fuel handouts, Republicans and oil state Democrats are all too happy to take the oily cash and vote to secure them anyways.
And that needs to change. So, every bill that highlights pols' oily ties is another opportunity to shame them, to put them in the uncomfortable position of voting for Big Oil over their constituents' demands. The status quo will only change when the political cost of taking that oil money outweighs its dollar value.