" part of those subsidies"
How much money does the U.S. government provide to support the oil, gas and coal industries?
In the United States, credible estimates of annual fossil fuel
subsidies range from $10 billion to $52 billion annually yet these
donÂ’t even include costs borne by taxpayers related to the climate, local environmental, and health impacts of the fossil fuel industry.
How much money do governments provide to support the oil, gas, and coal industries internationally?
I
nternationally, governments provide at least $775 billion to perhaps $1 trillion annually in subsidies. This figure varies each year, but it is consistently in the hundreds of billions. Greater transparency would allow for more precise figures.
Fossil Fuel Subsidies: Overview | Oil Change InternationalOil Change International
America's Most Obvious Tax Reform Idea: Kill the Oil and Gas Subsidies
In a world where $100-a-barrel oil is here to stay, there's no need to pad the industry's bottom line.
Yet,
some of the breaks are anachronisms that date back almost to the days of John D. Rockefeller. And in a world of permanently high crude prices, there's very little rationale for subsidizing the bottom lines of companies like ExxonMobil and BP.
The Worst of the Worst
Some of the biggest subsidies are, well, a bit goofy. In its FY 2013 budget request, Obama administration singled out eight oil and gas tax breaks for the ax,
worth about $38.5 billion over the next decade. Those are laid out in the table below from a
Congressional Research Service report earlier this month. Let's take the three big ones highlighted in the table below.
America's Most Obvious Tax Reform Idea: Kill the Oil and Gas Subsidies - Jordan Weissmann - The Atlantic
Expensing Intangible Drilling Costs ($13.9 billion): Since 1913, this tax break has let oil companies write off some costs of exploring for oil and creating new wells. When it was created, drilling meant taking a gamble on what was below the earth without high-tech geological tools.
But software-led advances in seismic analysis and drilling techniques have cut that risk down.
Deducting percentage depletion for oil and natural gas wells ($11.5 billion): Since 1926, this has given oil companies a tax breaks based on the amount of oil extracted from its wells. The logic is, if manufacturers get a break for the cost of aging machinery, drillers can deduct the cost of their aging resources. (You decide for yourself whether that makes any sense.) Since 1975, it's only available to "independent oil producers," not the big oil companies, like Exxon and BP. But many of these smaller companies aren't actually small. According to Oil Change International, independents made up 86 of the top 100 oil companies by reserves. Those 86 had a median market cap of more than $2 billion.
So essentially, this is a tax break that subsidizes the Very Big oil companies at the expense of the Very Biggest.
The domestic manufacturing deduction for oil and natural gas companies ($11.6 billion): In 2004, as American manufacturing was being ravaged by China's entrance on the global scene, Congress passed legislation designed to encourage companies to keep factories operating in the U.S. Thanks to some intensive lobbying, the oil industry ended up as one of the beneficiaries.
But while the refining process does involve high-tech manufacturing, there was never any danger that either drilling or refining was going to migrate overseas.
