Mar 18, 2012

Obama strengthens call to End Big Oil Subsidies

This is a quick update of a blog from earlier in March, much improved. President Obama is responding to gas price increases by strengthening his stance against federal tax subsidies for big oil companies. Below is his video from yesterday's weekly address, titled "Ending Subsidies for Big Oil" --

Updated content (from me) below:
"You can either stand with the oil companies or you can stand with the American people. You can keep subsidizing a fossil fuel that’s been getting taxpayer dollars for a century, or you can place your bets on a clean-energy future.” -- President Barack Obama at an early March campaign stop.
I find Obama's stance against fossil fuel subsidization totally compelling. For one thing - we need a clean energy future, yesterday. (You already knew that.) But for another - America's big Oil & Gas companies are not hurting for cash. In fact, the top five gasoline retailers in the USA earned more than $1 trillion in profit between 2001 and 2011.

...Your gas prices are going up but it ain't cause the Oil & Gas industry needs money. Based on my reading through the Financial Times last ten years lists of "world's wealthiest companies," Oil & Gas looks to be just about the world's most profitable industry. America's big oil companies look great, too. With minimal digging I've discovered that ExxonMobil (headquartered in Irving, TX) has been the world's #1 most profitable company most of the last 10 years, Chevron (San Ramon, CA) is consistently in the global top 10 and ConoccoPhillips (Houston, TX) is generally in the world's top 50. 

More research (by me) shows Exxon, Mobil, Gulf Oil, Amoco, Texaco, Shell Oil, ChevronTexaco, and their various cousins, competitors and mergers to have all been consistently on Fortune 500's Top 20 Wealthiest American Companies list from 1955 when the list began to the mid 1990s. The Clinton era broke Oil & Gas's dynastic tradition, but for about 40 consecutive years American Oil & Gas producers were bringing in +40% of the total profits attributed to America's top 20 most profitable companies. Year after year after year. The Oil & Gas profits dynasty was restored after 9/11. Today, President Obama says America's big oil companies receive about $4B in federal tax breaks every year. 

One more standout point: One result of the US oil crisis of 1973 was America's Oil & Gas Industry made a lot more money. Exxon slipped quietly into 1st place (after being #2 for most of the previous 20 years), stayed there for three consecutive years, and leading oil companies et al took home record profits. So while your relatives were scouring the country for a simple tank of gas, and President Carter was telling America to "put on a sweater," the Oil & Gas industry was purchasing bigger houses and blingier vacations.

To Obama's point: US Oil & Gas has been getting roughly 4x more federal tax payer subsidization than any other American energy sector since 1950... Since at least 1950 I should say, as the US Energy Information Administration recently verified.

Graphics by TheMatchFactory, via GOOD Magazine article
showing federal energy subsidization 2002-2008.  Click to enlarge.  

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