Save the Planet! Give Big Oil its Tax Break

Published April 8, 2008

By Elliot Sion

On April first, executives from the world’s five largest oil companies were called in front of Congress and grilled about the necessity of the massive tax breaks which the U.S. government gives them. “Americans are hoping that the top executives from the five largest oil companies will tell us that these soaring gas prices are just part of some elaborate hoax,” Rep. Ed Markey (D-Mass) said.

It’s unfortunate, but the combination of unbelievable profits for these companies (Exxon Mobil, Chevron, Royal Dutch Shell, BP and Conoco Phillips) over the last year, outrageously high gas prices recently and immense tax breaks for these companies seems like a giant April Fool’s joke. But it’s all real — and it’s why representatives, mostly Democrats, are pulling for an end to these breaks.

The issue being presented here is one of ethics and morals, not one of economics. The oil companies as well as the Bush Administration have argued that it’s unfair to end tax breaks for the oil companies, while continuing to give them to other manufacturers. From a purely economic standpoint, they may be right. But no industry, least of all the oil industry, operates in a vacuum. Tobacco companies present the most recent example of why industries are not created equal.

The government has done a terrific job of stifling the tobacco industry over the last fifteen years, even though they should be, by conventional capitalist logic, as entitled to television commercial spots, corporate sponsorship and magazine ads as any other industry. But they’re not. Coca-Cola is allowed to advertise on TV because its product isn’t destroying the lungs of millions of people worldwide. And the government recognizes this.

Even though a thriving tobacco industry is as profitable for the American economy as a thriving soft drink industry, the health and well-being of the public comes (or should come) first. It’s why New York City has recently banned the use of trans-fats in restaurants - it’ll be more expensive in the short term, but far less costly down the road.

Anyway, back to oil. ExxonMobil made a record 40 billion dollars last year, which by itself raises questions about where our $3.30 per gallon is going. Simply waving our fists and asking why the oil people are so wealthy is a weak strategy, though.

By anyone’s standards, the oil business is extremely lucrative to begin with, and it’s become even more lucrative with the Hummers, Escalades and, as Bill Maher puts it, the Ford Fuck-you mobiles which we, as consumers, choose to drive. This isn’t the real issue (well, it is, but it’s a totally different subject)

The real issue is the pretense of environmental awareness and fake commitment to sustainable energy by these companies. Stephen Simon, the executive Vice President of ExxonMobil, in responding to Markey’s grilling, claimed that his company in
the last year had spent 100 million dollars on renewable energy. They made 40 billion dollars last year, and they were only able to spare 100 million? And then they have the nerve to make TV commercials about their commitment to the environment?

The oil companies can’t have it both ways. They can’t, on the one hand, pretend they care about polar bears, and then at the same time hoard their money and pray General Motors starts manufacturing tanks for the public, that way people can drive from gas station to gas station, consuming fuel like oxygen. And as long as big oil continues to abuse its power and the gullible U.S. population, they do not deserve to have the same benefits as other companies.

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