Thursday, March 29, 2012

51-47 Vote Will Allow Oil Subsidies To Continue

Mar 29: President Obama delivered a statement at the White House at 11:00 AM prior to a vote in the Senate on a motion to invoke cloture on S.2204; a bill to "eliminate unnecessary tax subsidies and promote renewable energy and energy conservation." The bill sponsored by Senator Robert Menendez (D-NJ), would end taxpayer-funded loopholes to the five largest, most profitable oil companies in the world (i.e. the Big 5, BP, Exxon, Shell, Chevron, and ConocoPhillips) and use those savings to extend for one year expiring energy tax provisions and reduce the deficit [See WIMS 3/27/12].

    The President said in part, "Today, members of Congress have a simple choice to make: They can stand with the big oil companies, or they can stand with the American people. Right now, the biggest oil companies are raking in record profits -- profits that go up every time folks pull up into a gas station. But on top of these record profits, oil companies are also getting billions a year -- billions a year in taxpayer subsidies -- a subsidy that they've enjoyed year after year for the last century. . .

    "It's not as if these companies can't stand on their own. Last year, the three biggest U.S. oil companies took home more than $80 billion in profits. Exxon pocketed nearly $4.7 million every hour. And when the price of oil goes up, prices at the pump go up, and so do these companies' profits. In fact, one analysis shows that every time gas goes up by a penny, these companies usually pocket another $200 million in quarterly profits. Meanwhile, these companies pay a lower tax rate than most other companies on their investments, partly because we're giving them billions in tax giveaways every year. . .

    "Instead of taxpayer giveaways to an industry that's never been more profitable, we should be using that money to double-down on investments in clean energy technologies that have never been more promising -- investments in wind power and solar power and biofuels; investments in fuel-efficient cars and trucks, and energy-efficient homes and buildings. That's the future. That's the only way we're going to break this cycle of high gas prices that happen year after year after year.  As the economy is growing, the only time you start seeing lower gas prices is when the economy is doing badly. That's not the kind of pattern that we want to be in. We want the economy doing well, and people to be able to afford their energy costs. . .

    "We're going to keep investing in clean energy like the wind power and solar power that's already lighting thousands of homes and creating thousands of jobs. We're going to keep manufacturing more cars and trucks to get more miles to the gallon so that you can fill up once every two weeks instead of every week. We're going to keep building more homes and businesses that waste less energy so that you're in charge of your own energy bills. . . Today, the American people are going to be watching Congress to see if they have that same faith."

    While the President was speaking a majority of the Senate, 51 Senators voted for the bill to end the subsidies; however, under Senate rules 60 votes were required to approve the measure. Thus, the subsidies will continue, as 43 Republicans and 4 Democrats voted against the measure. The four Democrats included Senators Begich (D-AK), Landrieu (D-LA), Nelson (D-NE), and Webb (D-VA). Two Republicans, joined the Democrats and two Independents in supporting the measure -- Senators Collins (R-ME) and Snowe (R-ME). Two Republican Senators did not vote.

    Senator Menendez issued a statement following the vote saying, "Today, we had a very simple choice to make -- stand up for hard working middle class families struggling with sky high gas prices, or stand with Big Oil executives raking in record profits with the help of taxpayer-funded handouts. With their votes, Republicans said loudly and clearly that they're on the side of Big Oil. I will keep fighting for middle class families, for fairness and against these ridiculous, needless subsidies." Sen. Menendez also delivered a lengthy floor speech prior to the vote which is available from the link below.
    Senator James Inhofe (R-OK), Ranking Member of the Senate Committee on Environment and Public Works (EPW), welcomed the defeat and said, "I am pleased that President Obama and the Democrats' latest proposal to raise taxes on American energy producers was rejected today. We all know that when you tax something you decrease supply and when you decrease supply prices go up. Last time they tried this, the sponsor of the bill, Senator Menendez, made the shocking admission, 'Nobody has made the claim that this bill is about reducing gas prices.' He's right, it's not about reducing gas prices, it's about attempting to deflect blame for their policies that continue to make gas prices go up.
    "The Republican plan is about reducing gas prices. It's about increasing supply by taking advantage of the immense resources of oil, gas and coal that our nation possesses so that American families can have affordable electricity and lower prices at the pump. That is why I offered three common sense amendments that would dramatically spur American energy production and stop the overregulation by the Obama- EPA.
    "During the Senate debate this week, Republicans provided a stark contrast to the Democrats' war on affordable energy.  Remember when President Obama said that under his plan of a cap-and-trade system electricity rates would 'necessarily skyrocket'? He went on to explain that this is 'because I'm capping greenhouse gases...they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.' Significantly raising taxes on oil and gas is just part of this same cap-and-trade agenda: those extra costs would be passed on to consumers in the form of higher prices at the pump. There was never any way the Senate would pass such a measure, especially at a time when gas prices are already skyrocketing.  Its defeat is a good thing for the American people."
    Scott Slesinger, legislative director for the Natural Resources Defense Council NRDC) said, "The spectacle of the Senate Republican leadership unabashedly preserving corporate welfare for the oil industry -- at a time of skyrocketing industry profits and soaring gas prices -- is mindboggling. Rather than continuing to subsidize the richest companies in the world, we should be supporting policies that encourage more choices for Americans beyond the oil industry's monopoly on our transportation system. We ought to be supporting the clean energy entrepreneurs and American innovators who are developing ways we can reduce our addiction to oil, decrease pollution and improve our national security -- not the giant oil conglomerates who are keeping us stuck in the past."
    Michael Brune, Executive Director of the Sierra Club, issued a statement saying, "Today's vote is the latest reminder of what we knew all along: big oil companies and their lackeys in Congress will do whatever it takes to squeeze every penny possible out of American families, whether it's shirking taxes or price-gouging at the gas pump. It is obscene that a handful of wealthy oil executives are demanding billions in handouts from the government while ordinary Americans pay their fair share of taxes on top of four-dollar-a-gallon gas. And, it is shameful that a minority of obstructionist Senators are doing big oil's bidding against the will of their constituents -- the majority of whom support ending unfair tax subsidies for big oil. Big oil companies and speculators who are driving up prices at the pump don't need any more of our help. We need our leaders to focus on real solutions to break our dangerous dependence on fossil fuels, and invest in clean energy solutions to ease Americans' pain at the pump and create jobs. Unfortunately, the Senate missed an opportunity today to take an important step in moving beyond oil."   
    Just prior to the vote, American Petroleum Institute (API)'s Chief Economist John Felmy told reporters that the proposal before the Senate [i.e. S.2204] "to raise taxes on selected oil and natural gas companies ignores what could really work to reduce gasoline prices and help our economy: create jobs and produce at home more of the oil and natural gas we know our nation will be using. He said, "A recent Gallup poll shows the nation has little confidence our government is moving in the right direction on energy. Unfortunately, the discriminatory tax proposal before the Senate today aimed at a handful of oil and natural gas companies isn't going to inspire more. The proposal -- which is expected to fail with bipartisan opposition -- is a political distraction from high gasoline prices and our nation's failed energy policies. 
     "Solving our energy and economic challenges requires a different approach. It requires doing something we know works: producing at home more of the oil and natural gas that our nation will need for decades to come. While the economy has been struggling, our industry has been an engine of job creation and energy production. For example, in 2011, we created 150,000 jobs, almost one in every ten of all created nationwide, according to a study by the World Economic Forum and IHS-CERA. If our companies are permitted to produce more of America's ample oil and natural gas resources, they'll create even more jobs, more government revenue for critical programs, and more energy security. It's time to stop bringing up the same bad proposals again and again and take action that actually helps address the real energy and economic problems Americans are facing." 

Access the complete statement from the President (click here). Access the roll call vote (click here). Access legislative details for S.2204 (click here). Access the statement and floor speech from Sen. Menendez (click here). Access the statement from Sen. Inhofe (click here). Access the statement from NRDC with links to related information (click here). Access the statement from Sierra Club (click here). Access the statement from API (click here). [#Energy/OilNatGas]