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May 5, 2011

Subsidize the Solutions, Not the Problem

Editor’s note: This post originally appeared at The National Journal. If you agree with Jackie, go to the article and click “agree”!

For decades, the oil and gas industry has benefited from a long list of financial boons totaling billions of dollars each year. In an economy where we have to make tough choices about continuing important programs – whether its paying down the debt, protecting social security or providing for a national defense – we simply can’t keep letting Big Oil, possibly the biggest player in our economy, off the hook. They should have to pay taxes just like we do.

The industry is quibbling over semantic arguments about whether a tax break is a subsidy, or whether they are being singled out. In fact, the President has not singled the oil industry out. Many of the President’s proposed changes are economy-wide, and those that aren’t pertain to oil and gas industry activities that simply don’t apply to other industries. In fact, it’s the petroleum industry that has singled itself out by building a network of tax loopholes, and then gaming them in a way that allows benefits that few, if any, other industries could even imagine. And whether the funds come in a check after taxes, or as a break on taxes, the result is the same. More money in the oil industry’s pockets and less funds in the Treasury.

The incentives, whether tax based or otherwise, are not the problem. The issue is how they are targeted. We should be leveraging the power of the dollar to help stimulate new industry that will pay us back double or triple in the future. Oil and gas are the energy forms of the past, and their costs go well beyond the hundreds of billions in taxes they have evaded. Their costs, oil pollution and climate change, will continue to be racked up for decades.

We have offered relatively little to clean energy compared to the breaks we have continuously shoveled over to the oil industry. And where there have been clean energy benefits, most have gone to ethanol, leaving wind and solar, as well as advanced biofuels – some of our best hopes for the future – to fend for themselves on a playing field that is steeply tilted against them.

We can’t legislate an energy transition, but we can certainly make sure we are not inadvertently preventing ourselves from achieving it because of outdated and ludicrous benefits we are continuing to hand out to the companies that need it least. The oil industry brings society more problems than solutions. It’s time to move into the 21st century.

Jackie Savitz is a Senior Scientist and Senior Campaign Director at Oceana.