RI Delegation: Cut $21 Billion in Oil Subsidies

Tuesday, May 17, 2011

Leah Michaels, GoLocalProv News Contributor

 

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This week, the U.S. Senate is voting on a major plan to eliminate special tax breaks for big oil companies, and the Rhode Island Congressional delegation is standing firmly behind it.

On Monday, three members of the delegation—Congressman David Cicilline and Senators Jack Reed and Sheldon Whitehouse—described their plan to end special tax breaks for the five biggest oil companies, BP, Chevron, Conoco Phillips, Exxon Mobil, and Shell, and instead use the money to help decrease the national deficit.

By passing the Close Big Oil Tax Loopholes Act of 2011, they say they would help middle-class families, reduce the deficit, and save taxpayers approximately $21 billion over the next ten years.

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“Americans are paying $4 per gallon at the pump and being forced to provide an extra $4 billion in subsidies to big oil companies each year,” said Reed. “It is time to stop wasting taxpayer money subsidizing oil executives’ profits.”

Reed: Oil companies ‘double dipping’

The top five big oil companies made over $33 billion in profits in just the first quarter of 2011, and they had combined revenues of $1.5 trillion last year.

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In response to this, Whitehouse said, “These companies are doing just fine on their own, making over $33 billion in profit last quarter, and shouldn't be double dipping into Rhode Islanders wallets by charging near record prices and taking our tax dollars.”

Last week, top executives from the oil giants were questioned by the U.S. Senate Finance Committee about why members of the oil industry deserve tax breaks. They answered that abolishing the tax subsidies would lead to fewer jobs, less investment in new energy supplies, and fewer dollars for local and national treasuries, and claimed that it would do nothing to help lower gas prices.

In fact, the bill proposal was accompanied by reports from the nonpartisan Congressional Research Service and the Joint Economic Committee, which both said that the bill will neither raise nor lower gas prices for the immediate future.

Cicilline: End dependence on foreign energy

“A steady rise in gas prices is placing many hard-working Rhode Island families in serious financial peril,” Cicilline said. “It is time for Congress to close tax loopholes for Big Oil companies that are enjoying record profits while consumers are left to feel the pain at the pump. Until our nation makes the necessary and sustained investments in clean-energy technology that will once and for all end our dependence on foreign energy imports and Big Oil, we will continue to be held at the mercy of Wall Street speculators artificially driving up fuel prices.”

In the past, intense lobbying by the oil and gas industries has prevented any action from being taken to decrease industry tax breaks. A test vote for the bill is planned for Wednesday, led by Senate Majority Leader Harry Reid (D-Nev.), but even if it passes the Senate, its chances of being approved by the House are slim.

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