It is understandable that some countries may still
need to subsidize fossil fuel companies, but fossil fuel companies receive
about six times as much in subsidies as sustainable energy sources. The
International Energy Agency reports that subsidies to oil companies in
developing countries could reach as much as $630 billion in 2012, with those in
developed countries adding about $58 billion. The United States exceeds the
subsidies of other developed countries, with its yearly subsidies to the fossil
fuel industries amounting to about $13.6 billion. As Washington struggles to
balance the federal budget that is certainly one of the potential cuts that
should be considered.
The Institute for Policy Integrity lists the number
of laws giving tax breaks to energy companies. It lists 38 for the fossil fuel
industries, 25 for all the renewable energy sources together, and one break for
nuclear power. While it is in the national interest to subsidize the
development of sustainable energy resources, a much larger share of tax breaks
go to well established and profitable fossil fuel companies. And that's not the
whole story.
Some of the tax breaks and subsidies meant to
promote the development of renewable energy sources end up with the fossil fuel
companies. For example, the Georgia Pacific paper company, a subsidiary of Koch
oil, mixes a byproduct of paper production, called black liquor, with diesel to
make a product they claim as a biofuel. This fuel cannot be used in
transportation, and can only be burned as fuel in their plants. However, Koch
has managed to qualify the black liquor mixture to take advantage of the
biomass fuel assistance program and has received $5 billion in subsidies for
the process. Though Koch is on the record as being against green energy, funds
meant for green energy projects are subsidizing the fuel for Koch's paper mills.
Congress tried to close this loophole, but the effort was ultimately defeated.
The fossil fuel companies have become so large and
so adept at lobbying, that they often distort U.S. policies for their own
benefit. For instance, Exxon pays a lower tax rate than the average American.
Between 2008-2010, Exxon Mobil registered an average 17.6 percent federal
effective corporate tax rate, while the average American paid a higher rate of
20.4 percent. In spite of that, the company complains about its high taxation
and is currently running ads against the Obama administration's efforts to cut
$36 billion in tax loopholes and subsidies to help balance the budget.
Large oil companies are now multinational companies
which have little allegiance to the United States. According to a Mother Jones
article, "Exxon has 20 wholly owned subsidiaries domiciled in the Bahamas,
Bermuda and the Cayman Islands that (legally) shelter the cash flow from
operations in the likes of Angola, Azerbaijan and Abu Dhabi. Of the $15 billion
in income taxes it paid in 2009, Exxon paid none of it to the United States,
and it has tens of billions in earnings permanently reinvested overseas."
We should ask why our government is providing subsidies and tax breaks to
companies that have little legitimate need for them and apparently little
allegiance to the United States.
About the author: Dr. J.C. Moore is a physical
chemist whose interests are spectroscopy, computational chemistry, professional
ethics, and science education. He taught chemistry, physics, and general
science at the college level for 38 years. Since retirement, he has established
http://JCMooreonline.com, a website that examines current events from a science
and research perspective.
Article Source: http://EzineArticles.com/
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