[Congressional Record Volume 157, Number 64 (Wednesday, May 11, 2011)]
[Senate]
[Pages S2857-S2858]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
OIL COMPANY SUBSIDIES
Mr. WHITEHOUSE. Madam President, I am here to call for the end of the
$4 billion in giveaways that taxpayers are providing to big oil
companies every year. At a time of skyrocketing gas prices and of
record oil company profits and of difficult decisions about where and
how to cut the Federal deficit, we should not be providing big oil with
expensive and unnecessary taxpayer handouts.
Gas prices nationwide are averaging $3.96, up over a dollar from this
time a year ago. In my home State of Rhode Island the average price per
gallon is now over four bucks. These prices are putting a significant
dent in family budgets across the country.
In the last 50 years prices in real terms have only been this high
twice--in 1981 after the oil crisis and in parts of 2007 and 2008. High
gas prices not only increase the cost of driving, but they leave
families with less to spend on other basic necessities. They ripple
throughout the economy as gas-guzzling buses strain school district and
public transportation budgets, food prices increase from trucking
costs, and wherever transportation is a factor it raises costs for
American consumers.
The current price spike could not have come at a worse time. When gas
prices last peaked in July 2008, unemployment nationally was 5.8
percent. Now unemployment nationally is 8.8 percent, and it is even
higher in many States. In my home State of Rhode Island, we are still
struggling under a staggering 11-percent unemployment rate.
I recently heard from Tony, a constituent in Wakefield, RI, about the
impact rising gas prices have had on his wallet. He said:
We have few options to offset the higher pricing and thus
much less to spend.
Gas prices are forcing individuals such as Tony to make difficult
choices about what to cut out of the family budget. Yet even as
families are struggling, oil companies are once again reaping record
profits.
Here are the earnings numbers the oil companies recently announced
for this quarter: ConocoPhillips earned a first-quarter profit of $3
billion, up 44 percent from the period last year. Chevron earned $6.2
billion, a 36-percent increase in profit. Royal Dutch Shell earned $6.3
billion, a 30-percent increase in profit. BP earned $7.1 billion, a 17-
percent increase in profit. And the big one, ExxonMobil, earned a
profit in one quarter of $10.7 billion, a 69-percent increase from last
year in quarterly profit.
These companies combined for a total profit of $33.3 billion in the
first quarter. That is $370 million per day or more than $250,000 in
profit every minute. I have probably been speaking for at least 4
minutes, so they have made 1 million bucks.
There is a direct correlation between how much consumers pay at the
pump and how much oil companies rake in. As gas prices climbed from
2002 to 2008, so did profits. When gas prices fell in 2009, down went
profits. Sure enough, as gas prices climb again to over $4 per gallon,
oil profits are up sharply.
With people in Rhode Island and across the country being forced to
tighten their budgets, and with the Federal Government working to
reduce our deficit, it is all the more frustrating to read about these
taxpayer-subsidized, sky-high profits. At the very least, when we are
looking at cutting Head Start, for instance, we should not be wasting
$4 billion per year in precious taxpayer dollars to help these big oil
companies earn higher profits. They are doing wonderfully on their own.
So I am proud to join my colleagues in introducing the Close Big Oil
Tax Loopholes Act to end some of these egregious subsidies for the big
five oil companies. To highlight a few, the proposal would repeal
subsidies to oil companies for producing oil overseas. It would repeal
a deduction that can often eliminate Federal taxes for oil companies,
and it would repeal the head-scratching classification of oil companies
as manufacturers which allows them to take a tax credit aimed at
getting our manufacturing industry back on its feet. It is time to
close these loopholes and make sure oil companies are paying their fair
share to help us lower our deficit.
I ask unanimous consent to have printed in the Record an op-ed from
Jacqueline Savitz which ran today in my hometown paper, the Providence
Journal, calling on Congress to end these handouts.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From McClatchy-Tribune News Service, May 11, 2011]
Jacqueline Savitz: Make Congress End Handouts to Big Oil: Providence
Journal Op-Ed
(By Jacqueline Savitz)
Maybe the Internal Revenue Service should rename its 1040
Form the WD-40. After all, after millions of Americans paid
their taxes this year, a hefty chunk of their hard-earned pay
went to grease the palms of some of the world's richest oil
companies.
But these companies are already well lubricated. Despite
profits that surged to nearly $80 billion in 2010, Big Oil
will pocket nearly $5 billion in taxpayer handouts this
year--even as gasoline prices soar and our national debt
deepens.
One year after the Deepwater Horizon oil disaster in the
Gulf of Mexico, it's time to ask whether we keep shoveling so
much tax money to companies that need it so little--and seem
to care even less about the long-term health of America's
economy and environment.
Not surprisingly, in poll after poll, the American people
are saying: ``No!'' A February NBC/Wall Street Journal survey
found that a whopping majority of Americans--74 percent--
support ending longstanding oil-industry tax credits worth
tens of billions of dollars. President Obama has proposed a
change designed to keep the engine of innovation humming. He
has asked Congress to dispose of some grubby subsidies that
have rewarded Big Oil for bad behavior. And he wants to
replace them with more effective incentives for saving energy
and shifting to cleaner, greener and safer energy choices.
It's a sensible plan for leveling a playing field too long
tilted in Big Oil's favor. It recognizes that we can't just
pump our way out of our energy problem. And it would provide
the entrepreneurs who are creating tomorrow's energy sources
with the same kind of help the nascent oil industry got more
than a century ago but no longer needs.
The plan is also a welcome sign that, in the wake of the
Deepwater Horizon disaster, we are recognizing the true costs
of dirty energy. We don't pay just once for that gallon of
gas or quart of oil. We pay at least three times: Once at the
station; again on Tax Day for the subsidies; and again every
time taxpayers have to help clean up the environmental and
economic mess created by a leaking pipeline, smashed
supertanker or burning offshore rig.
It's one thing to mourn the lost lives, oiled birds, fouled
beaches and fishing grounds created by these catastrophes.
It's quite another, however, to realize that billions of our
tax dollars contributed to these disasters by cushioning
these companies from the true costs of their mismanagement.
So what's the problem? Apparently, the WD-40 has made its
way to Congress, and the well-lubricated process has so far
ensured that oil-industry subsidies continue to slip through
the legislative process.
At Oceana, we're calling on Congress to end this expensive,
self-destructive coddling. Oil and natural-gas companies have
already received at least $190 billion in subsidies since
1968, said a recent analysis by congressional staff. That
could grow by an additional $36.5 billion over the next
decade, if our laws aren't changed. And that doesn't count an
additional $2 billion to $3 billion in royalties a year that
companies aren't currently paying on the oil pumped out of
certain federal leases offshore, due to sloppy lawmaking and
political gridlock. A private company would never give that
oil away for free. Why should we the people?
In these lean times, we can't afford to waste more money on
further enriching the oil behemoths. Instead, we could: Pay
down our debt. Help our kids become the next Thomas Edison or
Bill Gates. Let today's small offshore-wind and ``smart
power'' firms become tomorrow's Google--or even tomorrow's BP
creating new jobs and big fortunes along the way.
Replacing oil won't happen overnight. But it won't happen
at all unless we make smarter choices now about spending the
public's money.
First, Congress should act now, as urged by President
Obama, to end unnecessary handouts to Big Oil. Second, make
sure that the companies pay fair royalties on the crude they
pump from public lands and waters. Finally, invest in people
and companies that will create the next energy revolution--
building everything from better offshore wind turbines to
electric cars. It's time we started using our scarce tax
dollars for the benefit of all Americans--and stopped handing
them over to a handful of rich oil executives. Come on
Congress, it's time for an oil change.
Mr. WHITEHOUSE. I have also called on President Obama to release some
of the oil stored in our Nation's Strategic Petroleum Reserve. History
has shown that releasing some of this oil into the market can have a
short-term impact on prices. When President George H.W. Bush announced
he was authorizing a
[[Page S2858]]
drawdown in 1991, oil prices fell by nearly $10 per barrel the next
day. There is not much we can do to reduce oil prices in the near term,
but this action could bring some relief to American consumers.
We must also clamp down on excessive oil speculation. I joined 47 of
my colleagues in opposing a Republican proposal to cut one-third of the
funding for the Commodity Futures Trading Commission, the cop on the
beat, for improper speculation. The Commission is responsible for
cracking down on illegal speculative activities that artificially
inflate the price of oil. We need to make sure Wall Street is not
unfairly gouging and hurting middle-class families. We should not be
taking this cop off that beat.
I am joining Senators Cantwell and Wyden in sending a letter calling
on the Commission to impose position limits on oil trading that were
required by the Dodd-Frank Wall Street reform bill. This
congressionally imposed deadline has already passed, and the Commission
should act swiftly to protect consumers by helping to restrain
speculation. I am glad President Obama has directed an investigation
into the role of speculation in our current gas prices.
In the long run, we must invest in electric vehicles, alternative
fuels, public transit, high-speed rail, and freight rail. Each of these
transportation methods can significantly reduce our reliance on oil in
the transportation sector. Indeed, moving freight by rail is three
times more fuel efficient than by truck.
If we do not take long-term action, these price spikes we are seeing
now are going to keep on coming. We have seen them before, and we will
see them again. As President Obama said, the United States keeps going
``from shock to trance on the issue of energy security, rushing to
propose action when gas prices rise, then hitting the snooze button
when they fall again.'' Let's not hit the snooze button after this one.
Let's take the long-term action necessary to get our country off of
foreign oil. But in the meantime, let's work together to end the
unnecessary and costly $4 billion giveaway to these highly profitable
oil companies and promote instead long-term solutions to move us off
oil and to protect American consumers from the harmful price shocks
they are now experiencing.
I would leave with this question: Can the deficit be at once the most
important challenge facing our Nation, as many of my colleagues say it
is, and at the same time less important than protecting big oil
subsidies? I think not.
I yield the floor.
I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. SESSIONS. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. SESSIONS. Madam President, I ask unanimous consent to be able to
speak in morning business for up to 15 minutes.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
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