I was shocked to read that America's biggest export in 2011 was oil. Exporting oil? Wait, aren't we developing domestic oil reserves to reduce our dependency on foreign oil? I think I missed something here.
In 1973, the Alaskan Oil Pipeline was opposed by environmentalists and native peoples. It was finally approved by Congress with the assurance Alaskan oil would only flow for Domestic uses. That ban was lifted in 1995 and Alaskan crude flowed to Asia. (In 2000, President Clinton restored the ban.) In 1989, the Exxon Valdez hit a reef and spilled over a half million barrels of oil into the Pacific Ocean. In 2010, British Petroleum created a massive oil spill offshore in the Gulf of Mexico, spilling 5 million barrels that decimated wildlife and destroyed beaches and southern livelihoods. In 2006, another British Petroleum catastrophic oil spill in pristine Prudhoe Bay.
All the while, we've thought these catastrophes were the price we had to pay to become energy independent. We thought we were drilling and extracting our domestic reserves to supply our industry and our towns and families. We also thought that subsidies to the oil companies were necessary to make it profitable to explore and drill new wells, both on land and offshore.
$10 billion to develop and process fuel for Americans. But the oil companies profited further from exporting $88 billion worth of American oil, subsidized by American taxpayers. And we still imported $277 billion from the Middle East, South America and elsewhere. (Source) So why export if Americans need the oil? Because Asians were willing to pay more. The oil companies extract a public resource and treat it like a private commodity.
Earlier this year, a Democratic bill in the Senate to reduce oil company subsidies by a paltry $2 billion/year was soundly defeated. Why? Because we need to encourage oil companies to drill our domestic supplies. Drill, baby, drill.
All the while, we've thought these catastrophes were the price we had to pay to become energy independent. We thought we were drilling and extracting our domestic reserves to supply our industry and our towns and families. We also thought that subsidies to the oil companies were necessary to make it profitable to explore and drill new wells, both on land and offshore.
Here's a summary of the most expensive current subsidies exclusively for oil companies (Source):
$1 billion/year Expensing up to 25% of sales$1 billion/year Expensing exploration and development costs$3.5 billion/year Section 1603 grants$3 billion/year Ethanol credit (45c/gallon to add to gasoline)
*note: another source cited the ethanol credit at $5 billion/year.
$300 million/year Energy Manufacturing tax credits$500 million/year Expensing 50% of cost to refine fuel$500 million/year Exceptions for energy-related partnerships$300 million/year Other miscellaneous benefits$10.1 billion/year Total tax and other subsidies to oil industry
Earlier this year, a Democratic bill in the Senate to reduce oil company subsidies by a paltry $2 billion/year was soundly defeated. Why? Because we need to encourage oil companies to drill our domestic supplies. Drill, baby, drill.
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