Big Contributions, Big Subsidies

By Mike Bryan | February 15, 2011

Could it really happen? Could the oil industry really get its subsidies cut? While I applaud President Obama’s initiative, it is almost beyond comprehension that Congress would ever pass such a bill. The pressure of the oil lobby and the tentacles from the oil industry that spread into a host of other powerful lobbying groups may likely prove to be more pressure than Congress can endure. 

Big oil generates billions of dollars in profits, while being subsidized by the federal government, and all the while creates diversionary rhetoric about the absurdity of a miniscule, by comparison, ethanol tax incentive.

It is nearly an impossible task to calculate the amount of tax breaks, subsidies, incentives, low-interest loans and oil depletion allowances that we provide the oil industry each year. Estimates are between $15 billion and $35 billion annually. The reason for the wide range is that it is hard to quantify given the numbers of various programs that can be broadly characterized as subsidies. Suffice to say, in addition to reaping some of the largest profits on the planet, when federal subsidies are added in, the oil industry is doing pretty well.

The oil lobby is all-powerful. Franklin Delano Roosevelt said, “The trouble with this country is you can’t win an election without the support of the oil bloc and you can’t govern with it.” Total contributions from the oil and gas industries to political candidates during the 2009-’10 election cycle exceeded $23 million. That’s a whole lot of influence when it comes to Congress reducing the oil industry subsidies.
Critics’ rail against big oil when there is a spill and they gasp with disbelief when Exxon announces the largest profits of any company in the history of the world, yet they continually turn their spiteful criticism to an industry that supports American agriculture, produces a domestic renewable fuel and creates millions of domestic jobs. 

As a nation, we should support the development of domestic energy, including natural gas, domestic oil, and a range of emerging and existing forms of renewable energy. We complain about oil imports and rattle a sabre now and then when gasoline prices spike, but the fact is, as a nation, we really don’t care where our energy comes from or what the ultimate price really is, as long as the price at the pump is within our budget. When it comes to the real price of oil we still ascribe to a now outdated policy of “Don’t ask don’t tell.”

So while the critics of ethanol subsidies continue to rant, the oil industry is reaping billions in profits while feeding like pigs at the government trough. Ships full of foreign oil continue to quietly slip into our ports, we unload the oil and fill them with billions of American dollars and send them on their way, all the while complaining about the injustices of the domestic ethanol industry.

That’s the way I see it.

Author: Mike Bryan
Chairman, BBI International