A Washington Post story yesterday revealed that oil and gas companies have enjoyed a massive taxpayer-funded giveaway of $11 billion since 1996 thanks to royalty free wells in the Gulf of Mexico, with Chevron’s $1.5 billion in extra profits topping the list.
The deal is a result of a 1995 law that was intended to encourage oil production at a time when the price of a barrel of oil dropped as low as $11. Now that same barrel of oil would sell for nearly $100, but Big Oil has no intention of giving up its preferential treatment.
With the sequester set to harm communities all across the country, Rep. Ed Markey (D-Mass.) has suggested that there might be a better use of money than widening the deficit with up to $15.5 billion in additional giveaways to oil and gas interests. But similar legislation to end Big Oil tax breaks has died in the Republican House or been blocked by filibusters by the Senate’s Republican minority, and oil companies want to keep the money flowing.
Chevron, the biggest winner from the royalty free wells, gave $2.5 million last year—from the exact same corporate treasury fattened by this government handout—to the Congressional Leadership Fund, a super PAC dedicated to maintaining a Republican majority in the House. In addition, its executives and corporate PAC gave $1.1 million directly to candidates for the presidency and Congress in the 2012 election according to analysis of data from the Center for Responsive Politics.
Records also show the oil giant spent $19.1 million in 2011 and 2012 on lobbying the federal government, in large part to block legislation that would end polluters’ ability to emit greenhouse gas pollution for free or take away Big Oil’s tax breaks. The industry has gotten used to having these kinds of benefits for a long time, after all, as ThinkProgress pointed out that today is the 100th anniversary of the first oil tax break (which still remains in effect today).
If efforts to end Big Oil’s special treatment are blocked in Congress once again, it will be a fair question to ask why everyday Americans who can’t afford their own lobbyists and super PAC contributions are the ones forced to pick up the tab.