Well, there’s always a lot to say about the subsidies and taxpayer bailouts of the energy industry, but let’s note a recent insightful story in the New York Times.
It’s a fairly in-depth look at how tax subsidies, some going back a century or more, and tax-friendly headquarters put money into corporate pockets. This was particularly interesting: “… an examination of the American tax code indicates that oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process. According to the most recent study by the Congressional Budget Office, released in 2005, capital investments like oil field leases and drilling equipment are taxed at an effective rate of 9 percent, significantly lower than the overall rate of 25 percent for businesses in general and lower than virtually any other industry.”
That sheds some light on the subsidies these highly profitable companies have been getting over the years. And we should remind everyone that history teaches that huge environmental disasters can lead to more corporate protection, not less.
After the Exxon Valdez disaster, for example, when the spotlights went away, the oil lobbyists got busy on the 1990 Oil Pollution Liability and Compensation Act. That’s the act now under fire for limiting oil company liability to $75 million, not including cleanup costs, and Congress is having to go back and fix that.
Three Mile Island, you may recall, had the nation deeply concerned about the safety of nuclear power and triggered a movement to demand safeguards … the biggest changes safeguard corporate profits. The Price-Andersen Nuclear Industries Indemnity Act limits industry liability to something around $10 billion to $15 billion, even though another major accident there could be much larger than the current oil spill. After that, taxpayers foot the bill.
