[Congressional Record (Bound Edition), Volume 157 (2011), Part 5]
[Senate]
[Pages 6988-6990]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         OIL COMPANY SUBSIDIES

  Mr. WHITEHOUSE. Madam President, I am here to call for the end of

[[Page 6989]]

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

[[Page 6990]]

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 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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