Senator Bernie Sanders (VT-I) has proposed a measure to repeal more than US$35 billion in tax breaks for the oil and gasindustry.
Sanders’ plan would invest $10 billion of the savings in the Energy Efficiency and Conservation Block Grant program and the remaining$25 billion toward reducing the federal deficit.
Sanders, who chairs the Senate EPW’s subcommittee on Green Jobs and the New Economy, said that, “If there is anything we should be learning from the Gulf disaster, it is that it is time tomove aggressively away from polluting and unsafe fossil fuels, which are getting more and more difficult to produce as we move further andfurther offshore to drill for them.”
The InternationalEnergy Agency (IEA) recently reported that global annual subsidiesto fossil fuel industries total about US$557 billion – a number that exceeds previous estimates by 75 percent. According to the IEA, phasing out these subsidies by 2020 could reduce global energy consumptionby 850 million tons equivalent of oil – or the combined currentconsumption of Japan, South Korea, Australia and New Zealand.
“I see fossil fuel subsidies as the appendicitis of the global energy system which needs to be removed for a healthy, sustainable development future,” said Fatih Birol, chief economist at the IEA in Paris.
The Gulf oil gusher provides an interesting backdrop for thissubsidies discussion, and Senators will surely use BP as an example ofthe perverse nature of propping up mature industries with federalassistance. Why do BP, ExxonMobil and other oil companies continue toreceive what amount to welfare payments from the U.S. taxpayer when they are raking in amazing profits?
For instance, BP (NYSE: BP) hauled in US$14billion in profits last year, and that was a big drop from the prior year. Does this industry really need taxpayers to help fund itsdangerous activities when the same amount (or less) money could perhapsbe more wisely spent on investments in renewables and efficiencyprograms to ensure a clean energy future?
BP CEO Tony Hayward has said he “think[s] the environmental impact of thisdisaster is likely to have been very, very modest.”
Never mind the insanity of that statement, for now. Just imagine how much more modest the environmental impact would be if investments weremade to reduce the amount of energy demand in the first place, and tosupply the world’s energy needs through clean technologies that don’tcarry the risk of a Deepwater disaster.
Given the entrenched power of the oil and gas industries inWashington, Congress will have its work cut out for it making the oiland gas industry pay the true cost of producing its products andcleaning up after itself, without dipping into the taxpayer’s pocket.
But with the true costs of oil addiction staring America in the facein the Gulf right now, the time to have that conversation is longoverdue.
Photo credit: Office of SenatorBernie Sanders.
Original Article on EnergyBoom