The US just gave big oil something for nothing

Oil companies just got a new boost from the U.S. government.  

The Obama Adminstration will allow energy companies to look for oil and gas off the coast of the eastern United States, from Florida to Delaware, starting in 2018, ending a long ban on East Coast fossil fuel exploration.

Aside from the fact that the oil companies are going to use sonic cannons to look for oil and gas beneath the sea, potentially harming thousands of dolphins, whales and other sea creatures, it is appalling that the Obama Administration gave this gift to the oil companies without asking for anything in return from them.

The U.S. government provides our oil companies about $37 billion a year in tax breaks, favorable loan rates, price controls, price guarantees and other subsidies for lowering the price of production of oil and gas (source: Oil Change International).  Obama could have asked for a quid pro quo here, by saying, “We’ll let you explore for oil and gas on the East Coast now. In return, you can stop taking money from the U.S. taxpayer.”

But he did not.

Exxon Mobil’s earnings totaled about $32 billion in 2013.  Chevron Texaco earned about $21 billion, Conoco about $9 billion (sources: corporate press releases).

Oil companies have been subsidized for almost a century, to help them lower their drilling costs.  At the time, perhaps this made sense.  

But now, the question must be asked. Do these corporate behemoths still need U.S. tax dollars to subsidize their operations?  

Even when the Obama Administration asked for cuts to the subsidies in recent years, the supposedly deficit-focused Congress has refused to cut one cent of the monies. Interesting – Congress cuts food stamp and school lunch programs (about $5 billion this year (source: Center on Budget and Policy Priorities), but not oil subsides. Is this hypocritical or what?  Why are the U.S. Representatives and Senators who worship that free-market apostle Ayn Rand not screaming their heads off about this? 

Essentially, we are looking at a situation in which the U.S. taxpayer is giving charity to private corporations, where it is used to enrich already wealthy people. Also, fossil fuel products are destroying the climate. The corporations won’t pay for the damage to our atmosphere, the failed crops, the storm surges, the wildfires, the tree die-offs and other catastrophes we may have to suffer because of climate change in the future.  We will pay.

If most taxpayers are not Exxon, Conoco or Chevron shareholders (and the vast majority are not), they are basically just giving money to the oil companies without getting anything in return.

Call it involuntary charity, call it broad-daylight robbery, call it whatever you will – it’s incredibly wrong.  Why should Joe and Josephine Taxpayer give one cent to private corporations for anything?  I learned in school that capitalism meant that you invested your money for your own private payoff.  It’s your money, and your risk.  Why should the public have to spend money to keep these corporations in business?

And Obama just gave the corporations the gift of new oil exploration rights without even asking the Congress to cut or eliminate these sick subsidies.  How can we put a stop to this insanity?

Mike Gold lives and works in the Bronx.Point of View is a column open to all.