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Even if Keystone Trade Talk Weren't "Empty Nonsense," Oil Industry Doesn't Need More Corporate Welfare

3 min. read

Over at Grist, David Roberts drives a sharp stake through the heart of the idea that President Obama "might use Keystone XL as a bargaining chip to trade in exchange for Republican support for … something else." According to Roberts, "There is nothing to this Keystone trade talk. It is vaporware." For good measure, Roberts adds that it is "empty nonsense." In sum: in his view, it's not happening.

But even if this talk about President Obama trading his approval of Keystone XL for something else weren't "empty nonsense," as Roberts explains, there's certainly no reason to be lavishing the oil industry with even more favors, even more corporate welfare than it's already received over the years. To the contrary, we clearly need to be weaning ourselves off fossil fuels and switching to clean energy as rapidly as possible, for a wide variety of reasons.  Here are just a couple recent articles - courtesy of Taxpayers for Commonsense - highlighting the pervasive largesse being lavished up a fossil fuel industry which certainly doesn't need it.

1. Effective Tax Rates of Oil & Gas Companies: Cashing in on Special Treatment: "From 2009 through 2013, large U.S.-based oil and gas companies paid far less in federal income taxes than the statutory rate of 35 percent. Thanks to a variety of special tax provisions, these companies were also able to defer payment of a significant portion of the federal taxes they accrued during this period."

2. Taxpayers are losing millions on natural gas extracted from federal land: "Federal taxpayers lost in excess of $380 million from 2006 through 2013 on gas extracted from onshore federal leases as a result of existing royalty relief for “beneficial purposes” and “unavoidably lost” gas. Most of this loss – 82 percent – was associated with gas used by drilling operators for beneficial purposes, which allows oil and gas companies to consume publicly owned natural gas for certain defined purposes at no cost."

That last line can be broadened out to cover the myriad number of ways government policy allows fossil fuel companies to operate (at minimal cost) on publicy-owned lands, to damage the environment and public health at essentially no cost to them, to treat our waters and atmosphere as open sewers, and to continue receiving enormous taxpayer-funded corporate welfare while doing so. The Keystone XL pipeline is a classic example, in which a foreign company (TransCanada) wants to transport dangerous, dirty Canadian tarsands oil across the United States, in order to profit from exporting much of it to foreign markets.

What does the U.S. stand to gain from this? The whopping total of 35 permanent jobs; plus the risk of catastrophic spills into our rivers, lakes and aquifers; plus exacerbation of climate change, which harms all of us. A huge net negative, in other words, for everyone other than the investors in Canadian tar sands.  Those investors, by the way, include the mega-billionaire Koch brothers, who stand to gain a great deal if this pipeline is built, as they are major investors in Canadian tar sands. The question is, why would we be going out of our way to essentially subsidize super-rich fossil fuel magnates, especially when it represents the antithesis of what we need to be doing right now for environmental and economic reasons - transitioning as rapidly as possible from carbon-based fuels to clean, renewable energy?  Got us.

Topics: Public Affairs