I am told that Oil Industry gets billions of dollars of subsidies in order to explore for Oil in the US and abroad & to maintain the study flow of enery go the US economy. Does anyone know how much?
And why would you give subsidies to companies that are making record profits?
Re: Oil Industry Subsidies
Because Republicans control the government and big oil controls Republicans.
Re: Oil Industry Subsidies
becaus ethey generate alot of income for the government... and create jobs and all that rubbish
and to keep them sweet they get some back
Re: Oil Industry Subsidies
Lazy Bibi, this logic works for countries where the oil consumption is low and there is no infrastructure. USA is the biggest customer of Oil/Gas companies; I don’t think sweets are needed to do business here, every company wants to sell their gas here because they know even at 5 bucks a gallon, Americans will buy it to fill their gas guzzlers.
Re: Oil Industry Subsidies
oh sorry, I meant in terms of the men at the top government being nice to the men at the top of the oil companies
they all love each other ... its nice to do things for friends
Re: Oil Industry Subsidies
And why would you give subsidies to companies that are making record profits?
This question is too deep for me to answer...So I won't even post in this thread...
Re: Oil Industry Subsidies
Ahmadjee,
The Oil and Gas Industry does not receive subsidies directly. They are allowed to deduct a depletion allowance from their taxes. This is similar to a depreciation allowance for all other businesses. In the 70's and 80's there were special tax treatments that allowed huge tax deductions for investors, but those loopholes were eliminated.
In 1979 I sat in the House Gallery for the passage of a huge tax, having worked on the Windfall Profits Tax, a special tax on excess Oil company profits. At the time this was the largest tax in the history of the country. The net result was that the Government took the money, and over the course of the 80's the Oil companies did not invest the capital in Exploration and Production, and we are again seeing a shortage of oil. Offsetting periods of "excess profits" are frequently very long periods of fairly small oil profits. By stripping capital from the Oil companies during the boom times, we are inessence guranteeing more bust times. It is 1979 all over again.
If you really want chnage, levy consitantly larger taxes on petroleum products, but allow huge deductions for alternative fuel research. Eventually the economics swing....
Re: Oil Industry Subsidies
The 2005 Republican Energy Bill that was passed had lots of tax breaks with only 7% going towards renewable energy. Last night when Bush said we need to get off our addiction to oil he doesn't really mean it, the facts of the energy bill show it, it also allows up to 2 billion in tax breaks to the industry for oil drilling research, quite disgusting.
ExxonMobil 2005 Profit was over $36,000,000,000 A U.S. record.
Re: Oil Industry Subsidies
http://www.eia.doe.gov/oiaf/servicerpt/subsidy/index.html
I had no idea that it was billions of dollars in subsidies, I thought there were some tax deductions energy companies could take. I don’t know why it would be so much though, I just came across the link above, I haven’t read it in detail yet, but it sounds like it answers some of the basic questions. Where did you read that they got billions of dollars in subisidies? And its only recently that companies are making record profits, if prices were to turn alot of the smaller companies would go bust, not the majors, but the small ones would tank quickly.
Re: Oil Industry Subsidies
In 2003 for domestic subsidies it was 9.9B and tax break was around 414M. I don't have the data for 2004 or 2005. Check to see the copy of budget if available on federal govt website
Re: Oil Industry Subsidies
you must be joking, right?
From US History 101
Subsidies for oil and natural gas began in 1916 with the federal government creating its first tax breaks for oil and gas production.
After almost 90 years of taxpayer-funded subsidies, the oil and gas industries are flourishing but taxpayers still continue to contribute billions annually to the energy sector.
Instead of requiring energy companies to stand on their own feet, the government has set up a perpetual subsidy system. Large energy companies act as if they cannot survive without taxpayer handouts, perpetuating an endless cycle of subsidies.