“At a time when Iran continues to defy the international community with its nuclear weapons program, it is critical we continue to tighten our sanctions regime. This legislation expands our existing sanctions on Iran’s energy sector, and imposes new sanctions targeting shipping and insurance. Iran continues to try to evade existing sanctions. But this legislation, in combination with newly announced measures by the Obama administration, closes loopholes and stops the use of front companies, or financial institutions to get around international sanctions.

“Our current sanctions, and a recent European Union ban on purchasing Iranian oil, have already had an impact. In spite of the rhetoric coming out of Iran, the regime is clearly feeling the heat. Oil exports are down by 50 percent, and the Iranian currency has lost nearly 40 percent of its value. Iranian tankers full of oil are crowding the waters around Iran, acting as floating storage facilities for oil the rogue nation cannot sell.

“Over the past year, I have come to the floor many times urging passage of this measure. I am pleased we have finally completed this important work. There is no time to waste, as the Iranian regime continues to threaten our ally Israel and the national security of the United States.

“I want to thank Senators Johnson, Shelby and Menendez for their leadership and all of their hard work getting this bill completed in a bipartisan fashion.”

Yesterday, the Senate took the first step toward repealing wasteful taxpayer giveaways to oil and gas companies.

I was pleased that my Republican colleagues joined Senate Democrats to move this debate forward.

The country deserves to hear the truth about double dipping by oil companies: they take taxpayer money with one hand and raise prices at the pump with the other hand.

But don’t be fooled by last night’s bipartisan vote. Senate Republicans will never side with American taxpayers against Big Oil. It’s against their nature.

They proved it yesterday with rhetoric. And they proved it last year, with a nearly party-line vote against legislation to roll back billions in handouts to oil companies making record profits.

But despite Republican rhetoric, Americans understand it will take more than bumper sticker slogans to stop the pain at the pump.

We have to reduce the nation’s reliance on foreign oil. But we can’t drill our way to energy independence.

We must continuing looking for responsible, new, domestic oil sources. But we must also invest in the clean energy technologies of tomorrow to create good jobs today.

Repealing almost $24 billion in wasteful subsidies to oil companies would pay for those clean energy investments – with money left over to reduce the deficit.

America has only 2 percent of the world’s oil reserves, but consumes 20 percent of the world’s oil supply each year.

So drilling on American soil alone won’t solve our reliance on foreign oil.

Last year, America used a lower percentage of foreign oil than at any time in almost two decades, thanks to the Administration’s policies.

Domestic oil production has increased every year President Obama has been in office. Meanwhile, the America’s dependence on foreign oil has decreased each year.

Yet prices at the pump have continued to rise.

Here is why: for every penny the price at the pump goes up, the five major oil companies make an additional $200 million in profits each quarter.

Gas prices have risen 62 cents this year. Each of those 62 pennies represents pain for American consumers – and billions in profits for Big Oil.

Last year, Big Oil raked in a record $137 billion in profits. And they’re on pace for another year of astronomical profits.

So it is beyond ridiculous when Republicans argue that oil companies need billions in taxpayer subsidies each year.

Middle-class families are struggling. Oil companies that last year raked in $261,000 a minute – 24 hours a day, 365 days of the year – are not.

It should be obvious that America needs to reduce its reliance on foreign oil. But if anyone needs another reason, just look at the regimes that benefit from the global addiction to oil.

For example, Iran uses profits from global oil sales to support its terronuclear weapons program.

So it is critical that the Senate act now – and act quickly – to further tighten sanctions against Iran. These sanctions are a key tool as we work to stop them from obtaining a nuclear weapon, threatening Israel and ultimately jeopardizing U.S. national security.

The only way to get sanctions in place immediately is to take up a bipartisan bill that passed unanimously out of the Senate Banking Committee.

I have alerted the Republican Leader that I will soon ask consent to move forward on this measure.

Unfortunately, I understand my Republican colleagues will object to moving forward with these new sanctions because they want to offer additional amendments.

But new changes to the bill at this time will only slow down its passage.

There are a number of Democrats who would also like to offer amendments to this bill. But in an effort to get sanctions in place as quickly as possible, Democrats have agreed to streamline the process and refrain from offering their amendments.

We cannot afford to slow down this process.

Passing this bill immediately will help prevent Iran from acquiring a nuclear weapon. And that is a goal we can all agree on.

“Today the Senate voted against Republicans’ attempt to impose an artificial timeline and short-circuit the process needed to plan the best route for the Keystone XL pipeline. If Republicans truly want to move ahead with this pipeline, they should stop treating it like a political football.

“Half of the pipeline is already being built, and the company building the pipeline is submitting another application for the remainder of the route. This process should be given time to work, and be governed by what will produce the best result – not by Republicans’ desire to appease the Tea Party or big oil companies.”

Washington, D.C.–Nevada Senator Harry Reid made the following remarks today on the Senate floor regarding Republicans’ willingness to risk our economy to protect tax breaks for oil companies and corporate jets. Below are his remarks as prepared for delivery:

Yesterday I sat down with the President to talk about how to avoid a default crisis that would be black mark on this country’s reputation.

If we fail to avert this crisis, it would be the first time in our nation’s history that we have defaulted on our financial obligations. And it would send shock waves through the global economy.

I’m not the only one saying that. The most respected voices in the business and financial community are saying the same thing. Default would be awful.

Business leaders, economists, bank executives, credit rating agencies and even a Republican advisor to Presidents Ronald Reagan and George H.W. Bush have used some very serious words to describe the kind of crisis defaulting on our debt would cause.

The word many have used is “catastrophe.”

Warren Buffett said allowing the United States to default on its debt would be Congress’ “most asinine act” ever.

Treasury Secretary Timothy Geithner said a failure to avert default would have “catastrophic economic consequences that would last for decades.”

Failure to avert this crisis would have dire consequences. It would result in the most serious financial crisis this country has ever faced. Millions of Americans could lose their jobs. Social Security checks could stop. So could paychecks to our troops.

So, what could be so important that my Republicans colleagues are willing to put our economy at such dire risk? What could be worth walking away from the negotiating table? Tax breaks for wealthy oil companies and corporate jets.

Republicans have gone to the mat for Big Oil – fighting again and again to preserve wasteful taxpayer-funded giveaways to companies that made $32 billion in profits in the first quarter of this year alone. And Republicans walked away from the negotiating table to save tax breaks for corporate jets.

So, which big industries and special interests will they fight for next? Oil companies? Companies that ship jobs overseas? Corporate jets?

If they were truly serious about reducing the deficit, they would admit this kind of waste must end.

Yet some top Senate Republicans say eliminating these subsidies shouldn’t even be part of the discussion as we find a way to reduce the deficit and avoid a catastrophic default.

Several rank-and-file Senate Republicans have said handouts to oil and gas companies and other wasteful tax breaks should be on the table as we negotiate. And 34 Republicans endorsed the view that ending taxpayer giveaways should be part of the solution when they voted to eliminate subsidies for ethanol.

It seems Republicans can’t even agree among themselves whether subsidies and giveaways are sacrosanct.

The one thing they can agree on: they’re willing to balance the budget on the backs of seniors instead. They’re willing to end Medicare as we know it. They’re willing to slash Medicaid, jeopardizing coverage for 80 percent of American seniors in nursing homes.

Republicans’ priorities are clear. They’re also dead wrong.

Democrats know we need to make difficult spending cuts to reduce our deficit. But to dig ourselves out of this financial hole, we must also create jobs to spur our economy. And we must break the cycle of wasteful giveaways – not break our promise to seniors.

The junior Senator from South Carolina, a Republican, threatened that any Republican who votes to avert a default crisis will be “gone” – voted out in a wave of Tea Party anger. This kind of inflammatory language is irresponsible. There is simply too much at stake.

Also, he didn’t mention that 235 Republicans in the House and 40 in the Senate – including the junior Senator from South Carolina – have already voted to increase our debt this year. Their ideological budget would have increased the debt by more than 60 percent over the next 10 years. That’s nearly $9 trillion in a decade.

And what did Americans get for their $9 trillion? A plan that ends Medicare as we know it. A plan that would slash Medicaid, jeopardizing coverage for 80 percent of American seniors in nursing homes. A plan that protects tax breaks for billionaires and oil companies while putting millions of seniors at risk.

The psychologist Alfred Adler once said that “it is easier to fight for one’s principles than to live up to them.” Republicans shouted loudly and repeatedly about reducing the debt. Then they gave us 9 trillion reasons not to trust their rhetoric.

The time for empty rhetoric is over. Now it is time for my Republican colleagues to put the good of our economy ahead of their own good politics.

“I commend the President and Secretary Chu for their decision to tap this country’s strategic oil reserves in coordination with other International Energy Agency member nations. This decision should calm the markets, lower prices and provide some relief for Americans whose wallets are already strained by record prices at the pump. It also underscores the importance of continuing efforts to reduce our dependence on oil through advanced technology vehicles and clean alternative fuels.

“At a time when families in Nevada and across the country are struggling to make ends meet, it is crucial that we do all we can to lessen the impact that turmoil in the Middle East has here at home.”

I am happy to see Republicans opening up to what Democrats have being saying all along: cutting wasteful subsidies to big oil should be on the table if we are going to reduce the deficit.

Yesterday my friend, the senior Senator from Tennessee, said we should consider ending taxpayer subsidies for oil companies making record profits.

Democrats agree. Handouts like these – to companies that made $36 billion in the first quarter of this year alone – must be part of the discussion as we get our fiscal house in order.

As we decide where to cut, we will need to make some tough choices. But not every choice has to be difficult.

If we are serious about reducing spending, ending tens of billions in taxpayer giveaways to big oil companies shouldn’t be one of the difficult decisions.

And when the other side says the alternative is to end Medicare, slash Medicaid and put millions of seniors at risk, the choice is that much clearer.

We cannot take with one hand from those who can least afford it and give with the other to those who can.

Before we end Medicare as we know it or eliminate Medicaid funding for nursing homes, as the Republicans have proposed, we should cut wasteful spending.

During the course of a year, one in five Americans will be on Medicaid. The cuts Republicans propose affect real people.

The elderly man in the nursing home. The child missing her yearly checkup. The pregnant woman whose baby depends on proper prenatal care. The person with a disability who is able to live alone thanks to the helping hand Medicaid provides.

And these cuts will affect you, too. Cutting Medicaid simply shifts costs – it doesn’t lower them.

Each patient who doesn’t get the care he needs from a doctor today will get it tomorrow for twice the price in an emergency room. And you and I will foot the bill.

The American people have spoken loudly and clearly. They do not want to balance the budget on the backs of seniors, children or people with disabilities.

I am glad to one of my Republicans colleagues is finally getting the message.

“I have worked with Minority Leader Mitch McConnell on this issue for weeks and it is wrong for Sen. Vitter to try to get something in return for moving forward on a matter that the Senate has considered routine for more than a century.

“Ken Salazar is extremely well-qualified, hard-working cabinet secretary, and deserves better than to be strong armed while trying to do an important job for the American people.”

Refiners’ Output Has Dropped 900K Barrels Per Day Since Last Year, But Profit Margins Have More Than Doubled In That Span

Washington, D.C.—With new reports suggesting that refiners are cutting back on U.S. gasoline stockpiles in order to artificially keep prices high, Senator Claire McCaskill spearheaded a letter from Senate Democrats to the Federal Trade Commission today urging an investigation into potential price fixing.

Last week, new data released by the Energy Information Administration showed that refiners are producing at just 81 percent of their capacity—a drop of 900,000 barrels per day compared to last year’s output. Yet the refiners’ profit margins have more than doubled over that same span.

“At a time when major refiners and oil companies are making record profits and American families continue to struggle with gasoline at record prices the idea that refiners may be manipulating the market to keep prices artificially high is offensive. It is incumbent upon the Commission to ensure that the American people are protected from this type of manipulation,” wrote Senators McCaskill, Harry Reid, Dick Durbin, Charles E. Schumer and Patty Murray.

The senators’ letter followed a report in the Kansas City Star that analyzed the ballooning profit margins recorded by oil refiners in recent months.

Specifically, concerns have been raised that U.S. gasoline inventories remain below average and profit margins continue to rise. Since January 2011, U.S. refiners have seen over a 90 percent increase in their refining margins.

The full text of the letter is below:

May 17, 2011

Jon Leibowitz, Chairman

Federal Trade Commission

600 Pennsylvania Avenue, NW

Washington, D.C. 20580

Dear Chairman Leibowitz:

We write today to request the Commission begin an investigation into potential price fixing of gasoline by U.S. refiners.  Recent reports have indicated that U.S. refiners are cutting back on U.S. gasoline stockpiles in order to artificially keep prices high and inflate their bottom line.  If true, this behavior is a direct affront to the American people who are still struggling with the economic downturn.  It is currently within the Federal Trade Commission’s (Commission) authority to review these allegations for any potential wrongdoing and to determine the impact these actions may have on gasoline prices both regionally and throughout the country.

The rise in the price of oil is certainly a driving factor behind the recent rise in gasoline prices, but concerns have been raised that while gasoline use is declining, U.S. gasoline inventories remain below average and refining margins continue to rise.  According to information posted by the Energy Information Administration U.S. refiners are using only 81.7 percent of their capacity, a decline of 7 percent from the same time last year.  Moreover, since the beginning of 2011 U.S. refiners have seen over a ninety percent increase in their refining margins. While some have argued that this increase is due to potential impacts from recent flooding along the Mississippi River, this cannot justify the steady increases in their margins since January of this year.

At a time when major refiners and oil companies are making record profits and American families continue to struggle with gasoline at record prices, the idea that refiners may be manipulating the market to keep prices artificially high is offensive.  It is incumbent upon the Commission to ensure that the American people are protected from this type of manipulation.  Accordingly, we request that the Commission open a full investigation into these allegations of wrongdoing and to determine the impact this behavior, if confirmed, has on regional and national gasoline prices.

Thank you for your consideration of our request.  We look forward to hearing from you.

Sincerely,

CLAIRE MCCASKILL

United States Senator

HARRY REID

United States Senator

DICK DURBIN
United States Senator

CHARLES E. SCHUMER

United States Senator

PATTY MURRAY

United States Senator

Snowe: Subsidies Are “Unnecessary” And “Reckless”

Thune: “If In Fact They Are Making Such Enormous Profit, Perhaps They Don’t Need The Support Of The Tax Incentives That Are Given To Them By The American Taxpayer”

Collins: We Should Not “Continue to Subsidize The Oil And Gas Industry”

Senator Collins Said We Should Not “Continue to Subsidize the Oil & Gas Industry” While Taxpayers Struggle to Pay Bills. “With net profits of a single oil company reaching almost 10 billion dollars in a single quarter, we should not expect taxpayers struggling to pay their bills to continue to subsidize the oil and gas industry. Congress should repeal unnecessary tax breaks for big oil companies and use the billions of dollars instead to fund the remaining proposals in my 10-Point Energy Plan.” [Collins Press Release, 4/22/08]

Senator Mark Kirk Supported Nixing Big Oil Subsidies; They’re “Doing Just Fine on Their Own.” On C-Span’s Washington Journal, Sen. Mark Kirk (R-IL) broke with his party and called for cutting Big Oil’s subsidies, explaining that oil companies are “doing just fine on their own”: Q: Why can’t we start collecting royalties, finally, from the oil companies? Or do something about the subsidies that these very wealthy corporations have? Why can’t we get rid of these tax havens? Why can’t we talk about those things? Why can’t we put those on the table as well? KIRK: I think we should. In the House of Representatives, I voted to wipe out many of the oil company subsidies. They’re doing just fine on their own. I think that many of the corporate welfare programs are misplaced. [Think Progress, 3/1/11]

Senator Olympia Snowe: At a Time of Record Oil Profits and High Consumer Prices, Tax Breaks for Big Oil Are “Not Only Unnecessary, They Are Reckless.” Snowe said in a release, “In a time of record profits for oil companies and skyrocketing energy costs for consumers, tax breaks for the oil industry are not only unnecessary, they are reckless.  It would be far wiser to redirect the tax expenditures from these provision to incentives, such as the development of alternative and renewable energy sources from products that are developed, grown and manufactured domestically, so that the current energy crisis can be the last one.”  [Snowe Press Release, 4/26/06]

Thune: If Oil Companies Are Making Record Profits Then They Don’t Need Tax Incentives. Thune said in a floor speech,  “If in fact they are making such enormous profits then perhaps they don’t need the support and the tax incentives that are given to them by the American tax payer.” [Thune Floor Speech, 4/25/06]

·         Thune Authored Bill To Suspend Oil Subsidies, Called Them Unnecessary. In a 2006 press release Thune said, “Senator John Thune today introduced legislation that would provide immediate relief at the gas pump to American consumers. The Gas Price Reduction Act of 2006 would suspend the 18.4 cents per gallon federal gas tax through the end of September. The lost revenues would be reimbursed by a temporary suspension of a number of tax credits and royalty waivers currently enjoyed by the oil companies…Due to record oil profits, it is apparent many of these incentives are unnecessary. Many of these tax breaks were created years ago when the price per barrel was low and the federal government was trying to create incentives for further exploration. With the price of crude oil now at $73 per barrel, oil companies do not need taxpayer subsidized incentives to produce oil.” [Thune Release, 4/27/06]

Senator Dan Coats: “I Said Everything is on Table and That Includes Ethanol, That Includes Oil Subsidies.” “Coats said he would also be willing to discuss phasing out subsidies for oil production and ethanol – tax breaks he’s fought to maintain in the past. ‘I said everything is on the table. And that includes ethanol, that includes oil subsidies.’” [ABC News, 4/13/11]

Senator Lamar Alexander: Federal Subsidies for Coal, Oil, and Gas “May be too Expensive.” At a Department of Energy, Energy Innovation Summit, Tennessee Senator Lamar Alexander said, “Sometimes we get so entranced with an idea that we initiate a federal subsidy for it, and it never goes away.  We’ve done that with renewable energy, ethanol, mature sources such as coal, oil and gas. That may be too expensive.” According to Platts, “Later, on the sidelines of the conference, Alexander, the third ranking Republican in the Senate, said he may support some of President Barack Obama’s proposal to eliminate $26 billion in oil and gas tax breaks.” [Platts.com, 3/2/11]

Lindsey Graham Has Supported Ending Tax Breaks for Big Oil in Past: “It is Irrational to be Allocating Around $1 Billion Per Year in Tax Dollars When Oil Companies Are Recording Record Profits.” “It is irrational to be allocating around $1 billion per year in tax dollars to assist in production at a time when oil is $124 per barrel and companies are recording record profits. The proposal also seeks royalty payments due on existing leases where royalties were not previously charged. The inability to collect royalties was a result of poor drafting of the leases during the Clinton Administration and could result in billions in payments being collected over the next 10 years. These revenues will be invested in alternative fuel technology.” [Graham Press Release, 8/1/08]

Asbury Park, NJ Editorial: Oil Company Claims “Absolutely Embarrassing,” “Take The Breaks Away From the Big Oil Companies.”

Albert Lea, MN Editorial: “Use The Money Where It Is Really Needed”

Salt Lake Tribune Editorial (UT): Republicans “Downright Dishonest” To Talk Debt and Defend Big Oil Subsidies. “U.S. Tax Code benefits that oil companies seek out with at least as much vigor as any new pocket of petroleum mean higher profits for the firms, and lower revenues for the United States Treasury, amounting to some $4.4 billion a year. President Obama and the Democrats in the Senate want to end those tax breaks. Hatch does not. On this matter, the Democrats are right, and Hatch is not only wrong, he is being downright dishonest if he keeps defending the tax breaks even as he decries the size of the national debt.” LINK

Great Falls Tribune (MT): Baucus Calls For End To Big Oil Tax Breaks Big Oil. “Max Baucus told the heads of America’s biggest oil companies Thursday that they should stop getting billions of dollars in tax breaks because the country’s better off using the money to reduce the national debt than padding the profits of Fortune 500 companies. ‘We can put this money to better use, I believe, and we should,’ the Montana Democrat and chairman of the Senate Finance Committee told the assembled executives at a Capitol Hill hearing. ‘We should use this money to reduce our deficit instead of putting the burden on seniors and our children’s future. … We have to make choices. None of them are easy.’” LINK

Somerset County Daily-American Editorial (PA): Big Oil Tax Breaks Are Un-American. “Gasoline has been hovering around $4 a gallon, but big oil companies think the taxpayers should continue to subsidize the industry. It would be one thing if they were using the subsidies to expand production and lower prices at the pump. But they are not. The oil company executives testified before Congress that they don’t need incentives for oil and gas exploration and production. They spend most of their profits to purchase their own stock and boost their dividends. Congress should rescind the tax breaks that account for the $20 billion for the oil industry.” LINK

Albert Lea Tribune Editorial (MN): Time For A Change On Oil Subsidies. “the reality is that handing out fewer tax breaks to oil companies would mean either fewer tax dollars coming from everyone else or a bite out of the deficit. So the question facing Congress and the American people is whether they are better off giving their dollars to wealthy oil companies or conserving them for larger needs. For most, the choice is obvious: Use the money where it is really needed, not where it just adds to an already giant profit.” LINK

Asbury Park Press Editorial (NJ): No More Tax Breaks For Oil Companies. “There is no way the oil company executives can claim they are just regular Joes, trying to get ahead in a hard world. That claim is more accurately made by the people who are hoping they have enough gas in their cars to get to and from work until the next payday. It’s absolutely embarrassing. Take the breaks away from the big oil companies. Use the money to fuel other programs.” LINK

Lompoc Record Editorial (CA): The Dark Humor Of Oil Prices. “It was, at times, laughable to listen to the oil CEOs, one of whom whined that Congress ought not to ‘punish our industry for doing its job well.’ Talk about non sequiturs. What the well-dressed oil boss meant was that U.S. consumers paying record-high prices at the pump should continue to pony up about $4 billion in a year in what amounts to a taxpayer subsidy of an industry that does what it pleases, when it pleases and to whom it pleases. If the oil industry is in search of sympathy, they won’t get it from American motorists stressed by pump prices that may soon jump above $5 a gallon.”  LINK

ABC 2 News, Baltimore (MD): Cardin Speaks Up Against Breaks For Oil Companies. “Higher gas prices mean cutting back for most of us. But it turns out, big oil companies are still banking big money with some tax breaks. Now U.S. Senator, Ben Cardin wants to even the score. On Monday, Cardin held a press conference calling for the passage of legislation that would end $4 billion a year in subsidies and tax breaks for the five biggest oil companies.” LINK

NBC 10 News, Providence (RI): Congressional Delegation Wants End To Oil Subsidies. “As gasoline prices float at about $4 a gallon, Sens. Sheldon Whitehouse and Jack Reed and Rep. David Cicilline stood in front of the ExxonMobil terminal in the Port of Providence to demand action. ‘While Rhode Islanders are paying over $4 a gallon for gas, we are giving the oil industry $4 billion in tax subsidies a year. It’s extraordinary,’ Reed said. Whitehouse echoed those words. ‘At the same time Rhode Islanders are getting clobbered at the pump by big oil, big oil is making the biggest profits it’s practically ever made. Just in the first three months of this year, the Big 5 made $33 billion dollars in profits,’ Whitehouse said.” LINK

ABC News (MI): Senator Debbie Stabenow Discusses Gas Prices. “Fresh from questioning oil company executives at a hearing Thursday, U.S. Senator Debbie Stabenow stopped in Mid-Michigan Friday to talk gas prices. The Senator was discussing efforts to combat rising gas prices and ways to help those oil companies become part of the solution. ‘I think it’s fair as we’re asking everybody to sacrifice, to be part of what we need to do to pay down the national debt, that we be saying to the oil companies, We are asking you to support taking 1 percent of your profits and putting it towards America being secure,’ Stabenow said.” LINK

Saginaw News (MI): Senator Debbie Stabenow: Oil Companies Should Share Their Profits To Pay Down The National Debt. “U.S. Sen. Debbie Stabenow, D-Lansing, has an idea to reduce the national debt: Make oil companies share their profits.  … ‘We are asking (oil companies) to take 1 percent of their profits and put it towards paying down our national debt,’ she said. Stabenow also advocated eliminating federal oil company subsidies.” LINK

Associated Press (MD): Md. Senator To Push For Ending Tax Breaks For Oil Companies. “Maryland Sen. Benjamin Cardin is pushing for an end of $4 billion a year in subsidies and tax breaks for the five biggest oil companies.” LINK

KOMO News (WA): Cantwell Pushes Plan To Slash Gas Prices ‘Overnight’. “With no relief in sight at the gas pump, one of our state’s senators is going on the attack. U.S. Sen. Maria Cantwell says oil speculators are to blame for budget-busting prices – and she says it’s time to rein them in. As drivers wonder just how high gas prices can go, Cantwell and other lawmakers have been grilling oil company execs.” LINK

WPRI News (RI): RI Leaders Crack Down On Oil Companies. “With gas prices continuing to loom around $4 per gallon – national leaders are now considering tapping into the country’s strategic petroleum reserves and investigating Wall Street speculators. Sen. Sheldon Whitehouse said, ‘Undoubtedly, Rhode Islanders are being clobbered at the pump and something needs to be done.’” LINK

Snowe: Subsidies Are “Unnecessary” And “Reckless”

Thune: “If In Fact They Are Making Such Enormous Profit, Perhaps They Don’t Need The Support Of The Tax Incentives That Are Given To Them By The American Taxpayer”

Collins: We Should Not “Continue to Subsidize The Oil And Gas Industry”

Senator Collins Said We Should Not “Continue to Subsidize the Oil & Gas Industry” While Taxpayers Struggle to Pay Bills. “With net profits of a single oil company reaching almost 10 billion dollars in a single quarter, we should not expect taxpayers struggling to pay their bills to continue to subsidize the oil and gas industry. Congress should repeal unnecessary tax breaks for big oil companies and use the billions of dollars instead to fund the remaining proposals in my 10-Point Energy Plan.” [Collins Press Release, 4/22/08]

Senator Mark Kirk Supported Nixing Big Oil Subsidies; They’re “Doing Just Fine on Their Own.” On C-Span’s Washington Journal, Sen. Mark Kirk (R-IL) broke with his party and called for cutting Big Oil’s subsidies, explaining that oil companies are “doing just fine on their own”: Q: Why can’t we start collecting royalties, finally, from the oil companies? Or do something about the subsidies that these very wealthy corporations have? Why can’t we get rid of these tax havens? Why can’t we talk about those things? Why can’t we put those on the table as well? KIRK: I think we should. In the House of Representatives, I voted to wipe out many of the oil company subsidies. They’re doing just fine on their own. I think that many of the corporate welfare programs are misplaced. [Think Progress, 3/1/11]

Senator Olympia Snowe: At a Time of Record Oil Profits and High Consumer Prices, Tax Breaks for Big Oil Are “Not Only Unnecessary, They Are Reckless.” Snowe said in a release, “In a time of record profits for oil companies and skyrocketing energy costs for consumers, tax breaks for the oil industry are not only unnecessary, they are reckless.  It would be far wiser to redirect the tax expenditures from these provision to incentives, such as the development of alternative and renewable energy sources from products that are developed, grown and manufactured domestically, so that the current energy crisis can be the last one.”  [Snowe Press Release, 4/26/06]

Thune: If Oil Companies Are Making Record Profits Then They Don’t Need Tax Incentives. Thune said in a floor speech,  “If in fact they are making such enormous profits then perhaps they don’t need the support and the tax incentives that are given to them by the American tax payer.” [Thune Floor Speech, 4/25/06]

·         Thune Authored Bill To Suspend Oil Subsidies, Called Them Unnecessary. In a 2006 press release Thune said, “Senator John Thune today introduced legislation that would provide immediate relief at the gas pump to American consumers. The Gas Price Reduction Act of 2006 would suspend the 18.4 cents per gallon federal gas tax through the end of September. The lost revenues would be reimbursed by a temporary suspension of a number of tax credits and royalty waivers currently enjoyed by the oil companies…Due to record oil profits, it is apparent many of these incentives are unnecessary. Many of these tax breaks were created years ago when the price per barrel was low and the federal government was trying to create incentives for further exploration. With the price of crude oil now at $73 per barrel, oil companies do not need taxpayer subsidized incentives to produce oil.” [Thune Release, 4/27/06]

Senator Dan Coats: “I Said Everything is on Table and That Includes Ethanol, That Includes Oil Subsidies.” “Coats said he would also be willing to discuss phasing out subsidies for oil production and ethanol – tax breaks he’s fought to maintain in the past. ‘I said everything is on the table. And that includes ethanol, that includes oil subsidies.’” [ABC News, 4/13/11]

Senator Lamar Alexander: Federal Subsidies for Coal, Oil, and Gas “May be too Expensive.” At a Department of Energy, Energy Innovation Summit, Tennessee Senator Lamar Alexander said, “Sometimes we get so entranced with an idea that we initiate a federal subsidy for it, and it never goes away.  We’ve done that with renewable energy, ethanol, mature sources such as coal, oil and gas. That may be too expensive.” According to Platts, “Later, on the sidelines of the conference, Alexander, the third ranking Republican in the Senate, said he may support some of President Barack Obama’s proposal to eliminate $26 billion in oil and gas tax breaks.” [Platts.com, 3/2/11]

Lindsey Graham Has Supported Ending Tax Breaks for Big Oil in Past: “It is Irrational to be Allocating Around $1 Billion Per Year in Tax Dollars When Oil Companies Are Recording Record Profits.” “It is irrational to be allocating around $1 billion per year in tax dollars to assist in production at a time when oil is $124 per barrel and companies are recording record profits. The proposal also seeks royalty payments due on existing leases where royalties were not previously charged. The inability to collect royalties was a result of poor drafting of the leases during the Clinton Administration and could result in billions in payments being collected over the next 10 years. These revenues will be invested in alternative fuel technology.” [Graham Press Release, 8/1/08]

“Republicans would rather cut college scholarships, slash cancer research and end Medicare than take away taxpayer-funded giveaways to oil companies that are raking in billions in profits. That tells you everything you need to know about their priorities.

“We could have cut our deficit by $20 billion today, but Republicans defended oil companies instead. This is exactly the kind of wasteful spending we should be cutting. Democrats are not going to stop trying to end these wasteful taxpayer giveaways. I hope next time my Republican colleagues will put America’s seniors, students and middle-class families ahead of oil companies.”

Lakeland, Florida Editorial: “Speaker Boehner Had It Right The First Time When He Said Big Oil Companies Don’t Need Those Tax Breaks”

Wall Street Journal Editorial: “Maybe Mr. Mulva Should Work On Being A Better American”

Philadelphia Daily News: We Should Cut The Deficit By Ending Giveaways To Oil Companies, Not by Ending Medicare. “These companies are swimming in profits. The big five who were questioned in Washington yesterday booked $36 billion in profits just for the past quarter. Yet, ExxonMobil CEO Rex Tillerson whined that taking away subsidies would mean fewer explorations and less production, leading to higher prices at the pump. This was curious. First they tell us they can’t control an international market that sets oil prices. So why would losing a tax break that adds about 2 percent to their annual profits have an instant impact on pump prices?” LINK

Jackson Clarion Ledger: Oil Profits: Tax Breaks Raise Ire. “Meanwhile, in 2006, Exxon Mobil Corp. posted record profits for any U.S. company in history – $10.71 billion for the fourth quarter and $36.13 billion for the year. In 2008, it broke its own record with $11.68 billion in the second quarter. Then, did it again with $14.83 billion in the third quarter. The other oil companies profited immensely, as well. What goes up … stays up? And U.S. taxpayers are adding to the companies’ profits? While tea party Republicans attack middle-class tax breaks and the social safety net for the elderly, the sick and the poor? And want more tax breaks for the rich? That’s fiscal responsibility?” LINK

Las Vegas Sun: Who Needs Subsidies? “Republicans are taking the oil companies’ view. They say the bill wouldn’t lower the prices at the pump, but if that’s true, what’s the point of giving the subsidies? The Republicans also complain that the Democrats are trying to raise taxes, but Democrats just want them to pay their fair share. … The fact is the oil industry can and should pay more. Congress should pass the bill. It’s disgusting that Republicans are letting the oil companies gorge themselves while average Americans get stuck with the bill.” LINK

Louisville Courier Journal Editorial: Big Oil’s Breaks. “Late last month, ExxonMobil announced it had made almost $11 billion in the first few months of 2011, an improvement of about 70 percent over the same time last year. Ditto Shell: more than $6 billion net income in the first quarter, 22 percent higher than in the same quarter last year. So why, some may ask, haven’t the tax breaks given to big oil companies — some of those sweeteners in place since the 1920s — become part of the scything operation as congressional deficit hawks go after Planned Parenthood, Medicare and whole executive departments in their zeal to cut spending?” LINK

Miami Herald: On Tax Fairness And Loopholes. “In a scene reminiscent of the congressional hearing where tobacco company executives innocently denied that nicotine is addictive, oil company executives solemnly told Congress last week that their exorbitant profits are no big deal. One even suggested that closing big oil’s tax loopholes is somehow ‘un-American.’ Tell that to Americans struggling to make ends meet as they cope with $4-a-gallon gasoline and the economy gets hit with a sudden inflationary spike because of rising fuel prices. Meanwhile, oil companies report record earnings. To top it off BP acknowledges that taxpayers, in effect, are being asked to pick up part of the cost for BP’s oil spill in the Gulf of Mexico.” LINK

Wall Street Journal: Big ‘Un-American’ Oil. “The five oil companies bagged more than $35 billion in profits in the first quarter, noted Democratic Sen. Max Baucus of Montana, the committee chairman. That puts them on track for record profits of more than $100 billion this year. Eliminating some tax deductions, by contrast, aims to raise about $2 billion a year. And this has got Mr. Mulva hurling the ‘un-American’ bomb? Maybe Mr. Mulva should work on being a better American.” LINK

San Jose Mercury News: Oil Industry Reaping Benefits On Massive Campaign Contributions. “In the first quarter of 2011, the five largest multinational oil companies made nearly $36 billion in profits; they need taxpayer support like Warren Buffett needs welfare. Subsidies of this magnitude should be reserved for industries that serve a compelling national interest but are not yet profitable. And yet Senate Republicans who say debt and deficits are their top priority want to continue funneling taxpayer dollars to companies piling up massive profits, even as Congress cuts funding for food stamps and schools.” LINK

Lakeland Ledger: Big Oil Companies: Tax Breaks Not Needed. “On April 28, Exxon, Mobil and Shell reported ‘huge increases in their first-quarter profit … helped by higher oil prices and earnings from refining,’ reported The New York Times. In other words, while Americans are paying more at the pump to feed big oil’s profit margins, they continue to hand some of the most profitable companies in the world something like $4 billion a year in tax subsidies. Speaker Boehner had it right the first time when he said big oil companies don’t need those tax breaks. Obama has challenged Congress to side with the taxpayers against the oil lobby. The only question is, whose side is Congress on?” LINK

Longview Daily News: Big Oil Can Survive Without Federal Assistance. “There’s no doubt that earnings and profits are high. The six largest American oil companies returned profits of an aggregate $80 billion in 2010 and are well ahead of that schedule for 2011, with Exxon’s first-quarter profits exceeding $10.6 billion. At the same time, this immensely profitable industry remains entrenched at the front of the government welfare line, collecting an estimated $5 billion per year in outright government subsidies and tax abatements and perhaps another $3 or $4 billion in other special favors and considerations on the federal and state levels.” LINK

Santa Fe New Mexican: Ending Oil Subsidies Makes Fiscal Sense. “Republicans striking fiscally responsible poses are focusing on that ogre known as the federal debt. Forget that their party, and their party’s president, spun us from surplus to deficit in the course of eight years; they must cut spending — and keep financial burdens on the middle and lower classes. Well, looked at properly, the oil-business subsidies amount to spending — so here’s your chance, elephants, to take a nice bite out of it .” LINK

Cape Cod Times: End Oil Subsidies. “The sticker shock we are feeling at the gasoline pumps is a serious drag on efforts to restart the sputtering economy. With U.S. gas prices averaging more than $4 per gallon — and considerably more in many places on the Cape and Islands — filling the tank is tipping $50 or more. … At a time when the most basic human service programs are being slashed and Americans are pinching every penny, it is extremely difficult to see the logic in continuing the subsidies for an industry that is demonstrating it clearly doesn’t need the support.” LINK

Joplin Globe: Another Place To Cut Spending. “When we pay our monthly bills at home, we follow a budget and spend only what we bring in. So when our budgets get lean and we have to cut back, we look at unnecessary spending. Maybe that means we buy hamburger instead of steak. We get generic items instead of name-brand items. The federal government has a chance to cut $2 billion annually for the next decade by rescinding government subsidies to the five largest oil companies in the world, according to a bill sponsored by Sen. Claire McCaskill, D-Mo. BP, Chevron, ConocoPhillips, Exxon and Shell reported profits of $32 billion in the first quarter alone. So we support McCaskill’s idea to get those subsidies back.” LINK

San Francisco Chronicle: Big Oil’s Money Gusher. “ExxonMobil’s first-quarter earnings of $10.7 billion are up 69 percent from last year. Other oil companies are also scoring record gains. The five biggest oil companies together report more than $35 billion in profits. This gusher is an embarrassment for an industry seeking to keep its $4 billion annual tax subsidy from the U.S. government. It’s especially embarrassing at a time when Americans are paying $4 a gallon or more at the pump.” LINK

Houston Chronicle: Let’s Cut Off The Subsidies To Profitable Oil Companies. “These subsidies cannot be defended. With the evidence against them piling up and oil companies reporting huge profits, the tide finally may be turning against the subsidies. Let’s hope that as momentum builds to end giveaways to big oil, it will be the beginning of an energy policy that relies less on an industry that rakes in huge profits while it takes from Americans on their tax returns and at the pump.” LINK

“I thank Chairman Baucus for holding this important hearing, and hope my Republican colleagues will come to their senses and work with us to end these wasteful giveaways of taxpayer dollars.”

Washington, D.C.–Nevada Senator Harry Reid made the following remarks today on the Senate floor regarding tax giveaways for oil companies:

“As I speak, the heads of the five largest oil and gas companies in the world are testifying across the street.  With the country watching, these extremely wealthy CEOs of extremely profitable corporations are trying to explain to the Senate – and most importantly, to the American people – why they need taxpayer handouts.

“I don’t envy them.  It’s an impossible position to defend.

“Think about this: In just the first three months of this year, the oil industry made $36 billion in profits alone.  Not revenues – profits.  That’s $12 billion a month.  That’s $3 billion a week.  That’s pretty good money.

Detroit Free Press: Stabenow Takes Aim At Oil Subsidies. “On the eve of a congressional hearing, Michigan Sen. Debbie Stabenow and four other Democratic members of the Senate Finance Committee today asked oil company executives to acknowledge they no longer need subsidies that reduce the amount of federal taxes their companies pay. The oil company executives are expected to take part in a Finance Committee hearing on tax incentives and fuel costs on Thursday. The senators who signed a letter to the chief executives of BP America, Chevron, ConocoPhillips, Exxon Mobil and Shell said with oil prices high, they can make billions of dollars a week in profits while still getting billions of dollars a year in subsidies. ‘We have families that are paying as much for gasoline at the pump as they are paying for their groceries to put food on the table,’ Stabenow said.” LINK

Mid Hudson News: Schumer Backs Repeal Of Tax Breaks For Big Oil. “US Senator Charles Schumer announced his support for a proposal to repeal $4 billion in annual tax breaks to the largest oil companies. Schumer’s announcement comes with Hudson Valley gas prices well over $4 per gallon, but now beginning to pull back, slightly, in some places. ‘Decades ago when oil was $17 a barrel, it made sense to give companies an incentive to explore and produce; that’s when these things were passed,’ he said Wednesday. ‘But, with oil hovering around $100 a barrel and Big Oil reaping record it defies logic to spend billions of dollars every year to tax giveaways to Big Oil.’” LINK

The Mitchell Daily Republic: Tim Johnson Calls For End To Oil Subsidies; Thune Disagrees. “Sen. Tim Johnson, D-S.D., called for an end to taxpayer subsidies for oil and natural gas companies Wednesday, saying instead the United States should invest in further ethanol production and improving the infrastructure to deliver ethanol to market. ‘High-priced oil threatens both our energy and economic security. We have a homegrown solution — ethanol,’ Johnson told reporters. ‘It’s time to end the $4 billion a year of taxpayer giveaway to big oil. Oil companies don’t need any help.’” LINK

Coventry Patch: Whitehouse Calls for End to Tax Breaks for Big Oil. “With Rhode Island drivers continuing to feel the pain of rising costs at the pump, U.S. Senator Sheldon Whitehouse (D-RI) today cosponsored legislation introduced in the Senate to end expensive tax breaks for big oil companies.  The Close Big Oil Tax Loopholes Act would end these handouts to the five largest oil companies and use the billions in savings to help reduce our federal deficit. ‘These companies are doing just fine on their own, making over $33 billion in profit last quarter, and shouldn’t be double dipping into Rhode Islanders’ wallets by charging record prices and taking our tax dollars,’ said Whitehouse.  ‘We should put an end to these tax breaks to Big Oil.’” LINK

The Clark Fork Chronicle: Tester Plan Ends $4 Billion In Taxpayer Subsidies To Big Oil Executives. “After introducing new legislation to hold the world’s largest energy giants accountable to American taxpayers, Senator Jon Tester is calling for end to the $4 billion in ‘taxpayer handouts’ that allow the nation’s top Big Oil executives to pull in billions in profit every year. America’s five largest oil giants receive more than $4 billion in taxpayer-funded subsidies every year. The same companies recently reported profits of $4 billion every week.” LINK

KTVZ News Oregon: Wyden, Senators Take Aim At Oil Speculators. “Sens. Maria Cantwell (D-WA) and Ron Wyden (D-OR) led a bipartisan group of 17 senators Wednesday in calling on federal regulators to expedite long-stalled rules to rein in excessive Wall Street speculation in West Texas Intermediate (WTI) crude oil futures and other energy commodities. They said numerous experts have concluded that excessive trading in oil futures is causing oil price volatility unrelated to supply-and-demand fundamentals, and contributing to rising gas prices. According to the U.S. Commodity Futures Trading Commission’s (CFTC) own report, speculators hold futures and options on more than 258 million barrels of oil. That is more than one-third of the amount in the Strategic Petroleum Reserve.” LINK

WNEW News Michigan: Sen. Stabenow, Colleagues Target Oil CEOs. “Sen. Debbie Stabenow and four other Democratic Senators sent a letter to the CEOs of the Big Five oil companies urging them to admit that they no longer need taxpayer-funded subsidies. The heads of the country’s five largest oil companies are scheduled to testify Friday before the Finance Committee.” LINK

KELO News South Dakota: Johnson’s Plan To Save At Pump. “South Dakota Senator Tim Johnson has a plan to save you some money at the pump. He’s co-sponsoring legislation that would extend ethanol and alternative fuel tax credits through 2016. In addition to lowering the cost of fuel, Johnson says it would create jobs. ‘A home-grown solution: ethanol. This is not a new answer but is one that we must continue to invest in for the future,’ S.D. Senator Tim Johnson said.” LINK

KRMS News Michigan: McCaskill Backs Bill Cutting Oil Company Tax Breaks. “With gas prices on the rise and federal debt worries, U.S. Senator Claire McCaskill’s announced her support for legislation that would help address our fiscal crisis by clawing back tax giveaways to the most profitable companies in the world.” LINK

Money Saved Would Reduce The Deficit By Tens of Billions

Washington, DC—Nevada Senator Harry Reid and New Jersey Senator Robert Menendez today sent a “Dear Colleague” letter to Senate Republicans asking them to cosponsor legislation that would reduce the deficit by ending wasteful taxpayer handouts to big oil companies making record profits while American families pay $4 at the pump.

The bill would eliminate more than $21 billion in subsidies for the five largest, most profitable oil companies in the world. Some Republicans have publicly expressed a willingness to consider supporting legislation to cut wasteful subsidies for oil companies.

“It is encouraging that some Republicans have publicly expressed a willingness to consider supporting legislation to cut wasteful subsidies for oil companies and we look forward to working with all of you to lower the deficit,” the Senators wrote. “If we are to truly address our national debt, we will all have to tighten our belts and make sacrifices – even the most wealthy and powerful among us… The Big 5 oil companies have made nearly $1 trillion in profits in the last decade – and more than $30 billion of that in the first three months of this year alone. At the same time, many Americans are struggling to make ends meet, find a job, or fill their gas tanks with $4 per gallon gasoline. We simply cannot solve our budget problems by asking working class families to shoulder the burden alone.”

Full text of the letter is below:

Dear Colleague:

We are writing to ask that you consider cosponsoring S. 940, legislation we introduced this week to eliminate more than $21 billion in oil subsidies for the five largest, most profitable oil companies in the world.  It is encouraging that some Republicans have publicly expressed a willingness to consider supporting legislation to cut wasteful subsidies for oil companies and we look forward to working with all of you to lower the deficit.

If we are to truly address our national debt, we will all have to tighten our belts and make sacrifices – even the most wealthy and powerful among us.  The Big 5 oil companies have made nearly $1 trillion in profits in the last decade – and more than $30 billion of that in the first three months of this year alone.  At the same time, many Americans are struggling to make ends meet, find a job, or fill their gas tanks with $4 per gallon gasoline.  We simply cannot solve our budget problems by asking working class families to shoulder the burden alone.

Some have claimed that cutting $2 billion in annual oil subsidies to the Big 5 oil companies will somehow make oil and gasoline more expensive.  We all know this argument is false.  If we just compare the $2 billion in taxpayer subsidies to the projected $125 billion in profits the Big 5 oil companies are expected to make this year, it becomes very clear that repealing these subsidies would be only a small sacrifice for these companies.  If the Big 5 oil companies could live with just $123 billion in profits, they could pay their fair share in taxes, help lower the deficit, and not raise the price of gasoline.

Thank you for taking the time to consider cosponsoring our bill to eliminate more than $21 billion in oil subsidies for the Big 5 oil companies.  Please do not hesitate to contact either of us or our staff if you have any questions.  We look forward to working with you to lower the deficit in an equitable and effective manner.

Sincerely,

Senate Majority Leader Harry Reid

Senator Robert Menendez

Money Saved By Revoking Wasteful Giveaways Would Reduce Deficit

Washington, DC—Today Democrats sent a letter to the CEOs of the Big Five oil companies urging them to admit in Senate hearings tomorrow that they no longer need taxpayer-funded subsidies. The heads of the country’s five largest oil companies are scheduled to testify before the Finance Committee tomorrow.

With oil at more than $100 a barrel, these five companies make $2.8 billion a week in profits while taking home billions a year in subsidies.

“We urge you to take this opportunity to publicly admit that, given your companies’ prodigious profits, you no longer need taxpayer subsidies,” the Senators wrote. “We hope you will do the right thing for our country’s fiscal health and endorse their discontinuation.

“We are sure you will agree that our nation’s mounting debt is a serious threat to our recovering economy.  But if we are truly serious about cutting our deficit, it is imperative that we start by getting rid of wasteful and ineffective corporate subsidies that have outlived their usefulness…. While families across the country are being squeezed, your industry is doing better than ever.  And yet the U.S. government continues to dole out $4 billion a year in tax breaks to your companies. These subsidies are not sustainable, and we intend to end them.”

The full text of the letter is below:

Rex W. Tillerson                                                         John S. Watson

Exxon Mobil Corporation                                           Chevron Corporation

5959 Las Colinas Boulevard                                       6001 Bollinger Canyon Road
Irving, Texas 75039-2298                                           San Ramon, CA 94583

James J. Mulva                                                            Marvin Odum

ConocoPhillips                                                            Shell

600 North Dairy Ashford                                           One Shell Plaza

P.O. Box 2197                                                            910 Louisiana Street
Houston, TX 77252-2197                                           Houston, TX. 77002

H. Lamar McKay

BP America

501 Westlake Park Blvd

Houston, TX. 77079

Dear Sirs:

As members of the Senate Committee on Finance, we eagerly await your testimony at our panel’s hearing tomorrow. We urge you to take this opportunity to publicly admit that, given your companies’ prodigious profits, you no longer need taxpayer subsidies. We hope you will do the right thing for our country’s fiscal health and endorse their discontinuation.

We are sure you will agree that our nation’s mounting debt is a serious threat to our recovering economy.  But if we are truly serious about cutting our deficit, it is imperative that we start by getting rid of wasteful and ineffective corporate subsidies that have outlived their usefulness.  That is why we introduced legislation yesterday—the Close Big Oil Tax Loopholes Act (S. 940)—that would end $21 billion in projected taxpayer subsidies for the five largest integrated oil companies.  The former President of Shell Oil, John Hofmeister, had the courage to say, in no uncertain terms, that your companies no longer need these giveaways. We urge you, in your testimony tomorrow before the Senate Finance Committee, to acknowledge the same.

We agree with the vast majority of Americans that taxpayer subsidization of your companies is no longer necessary.  When many of these tax breaks were passed into law, oil was less than $20 a barrel. Today, the price of oil is hovering around $100 a barrel.  Because of the exponential increase in the price of oil, the companies you successfully manage have reported a combined total of $36 billion in corporate profits in the first quarter of 2011 alone. That amounts to a staggering $2.8 billion per week of profit.

Every single one of us has heard from constituents back home who are struggling with the rising price of gasoline. While families across the country are being squeezed, your industry is doing better than ever.  And yet the U.S. government continues to dole out $4 billion a year in tax breaks to your companies. These subsidies are not sustainable, and we intend to end them.

We are hopeful that you will agree that S. 940 makes economic sense in our shared goal of putting our country back on the right fiscal track.

Sincerely,

Senator Bob Menendez

Senator Chuck Schumer

Senator Debbie Stabenow

Senator Bill Nelson

Senator Ben Cardin

Money Saved By Revoking Wasteful Giveaways Would Reduce Deficit

Washington, DC—Today Democrats sent a letter to the CEOs of the Big Five oil companies urging them to admit in Senate hearings tomorrow that they no longer need taxpayer-funded subsidies. The heads of the country’s five largest oil companies are scheduled to testify before the Finance Committee tomorrow.

With oil at more than $100 a barrel, these five companies make $2.8 billion a week in profits while taking home billions a year in subsidies.

“We urge you to take this opportunity to publicly admit that, given your companies’ prodigious profits, you no longer need taxpayer subsidies,” the Senators wrote. “We hope you will do the right thing for our country’s fiscal health and endorse their discontinuation.

“We are sure you will agree that our nation’s mounting debt is a serious threat to our recovering economy.  But if we are truly serious about cutting our deficit, it is imperative that we start by getting rid of wasteful and ineffective corporate subsidies that have outlived their usefulness…. While families across the country are being squeezed, your industry is doing better than ever.  And yet the U.S. government continues to dole out $4 billion a year in tax breaks to your companies. These subsidies are not sustainable, and we intend to end them.”

The full text of the letter is below:

Rex W. Tillerson                                                         John S. Watson

Exxon Mobil Corporation                                           Chevron Corporation

5959 Las Colinas Boulevard                                       6001 Bollinger Canyon Road
Irving, Texas 75039-2298                                           San Ramon, CA 94583

James J. Mulva                                                            Marvin Odum

ConocoPhillips                                                            Shell

600 North Dairy Ashford                                           One Shell Plaza

P.O. Box 2197                                                            910 Louisiana Street
Houston, TX 77252-2197                                           Houston, TX. 77002

H. Lamar McKay

BP America

501 Westlake Park Blvd

Houston, TX. 77079

Dear Sirs:

As members of the Senate Committee on Finance, we eagerly await your testimony at our panel’s hearing tomorrow. We urge you to take this opportunity to publicly admit that, given your companies’ prodigious profits, you no longer need taxpayer subsidies. We hope you will do the right thing for our country’s fiscal health and endorse their discontinuation.

We are sure you will agree that our nation’s mounting debt is a serious threat to our recovering economy.  But if we are truly serious about cutting our deficit, it is imperative that we start by getting rid of wasteful and ineffective corporate subsidies that have outlived their usefulness.  That is why we introduced legislation yesterday—the Close Big Oil Tax Loopholes Act (S. 940)—that would end $21 billion in projected taxpayer subsidies for the five largest integrated oil companies.  The former President of Shell Oil, John Hofmeister, had the courage to say, in no uncertain terms, that your companies no longer need these giveaways. We urge you, in your testimony tomorrow before the Senate Finance Committee, to acknowledge the same.

We agree with the vast majority of Americans that taxpayer subsidization of your companies is no longer necessary.  When many of these tax breaks were passed into law, oil was less than $20 a barrel. Today, the price of oil is hovering around $100 a barrel.  Because of the exponential increase in the price of oil, the companies you successfully manage have reported a combined total of $36 billion in corporate profits in the first quarter of 2011 alone. That amounts to a staggering $2.8 billion per week of profit.

Every single one of us has heard from constituents back home who are struggling with the rising price of gasoline. While families across the country are being squeezed, your industry is doing better than ever.  And yet the U.S. government continues to dole out $4 billion a year in tax breaks to your companies. These subsidies are not sustainable, and we intend to end them.

We are hopeful that you will agree that S. 940 makes economic sense in our shared goal of putting our country back on the right fiscal track.

Sincerely,

Senator Bob Menendez

Senator Chuck Schumer

Senator Debbie Stabenow

Senator Bill Nelson

Senator Ben Cardin

Money Saved Would Reduce The Deficit By Tens of Billions

Washington, DC—Nevada Senator Harry Reid and New Jersey Senator Robert Menendez today sent a “Dear Colleague” letter to Senate Republicans asking them to cosponsor legislation that would reduce the deficit by ending wasteful taxpayer handouts to big oil companies making record profits while American families pay $4 at the pump.

The bill would eliminate more than $21 billion in subsidies for the five largest, most profitable oil companies in the world. Some Republicans have publicly expressed a willingness to consider supporting legislation to cut wasteful subsidies for oil companies.

“It is encouraging that some Republicans have publicly expressed a willingness to consider supporting legislation to cut wasteful subsidies for oil companies and we look forward to working with all of you to lower the deficit,” the Senators wrote. “If we are to truly address our national debt, we will all have to tighten our belts and make sacrifices – even the most wealthy and powerful among us… The Big 5 oil companies have made nearly $1 trillion in profits in the last decade – and more than $30 billion of that in the first three months of this year alone. At the same time, many Americans are struggling to make ends meet, find a job, or fill their gas tanks with $4 per gallon gasoline. We simply cannot solve our budget problems by asking working class families to shoulder the burden alone.”

Full text of the letter is below:

Dear Colleague:

We are writing to ask that you consider cosponsoring S. 940, legislation we introduced this week to eliminate more than $21 billion in oil subsidies for the five largest, most profitable oil companies in the world.  It is encouraging that some Republicans have publicly expressed a willingness to consider supporting legislation to cut wasteful subsidies for oil companies and we look forward to working with all of you to lower the deficit.

If we are to truly address our national debt, we will all have to tighten our belts and make sacrifices – even the most wealthy and powerful among us.  The Big 5 oil companies have made nearly $1 trillion in profits in the last decade – and more than $30 billion of that in the first three months of this year alone.  At the same time, many Americans are struggling to make ends meet, find a job, or fill their gas tanks with $4 per gallon gasoline.  We simply cannot solve our budget problems by asking working class families to shoulder the burden alone.

Some have claimed that cutting $2 billion in annual oil subsidies to the Big 5 oil companies will somehow make oil and gasoline more expensive.  We all know this argument is false.  If we just compare the $2 billion in taxpayer subsidies to the projected $125 billion in profits the Big 5 oil companies are expected to make this year, it becomes very clear that repealing these subsidies would be only a small sacrifice for these companies.  If the Big 5 oil companies could live with just $123 billion in profits, they could pay their fair share in taxes, help lower the deficit, and not raise the price of gasoline.

Thank you for taking the time to consider cosponsoring our bill to eliminate more than $21 billion in oil subsidies for the Big 5 oil companies.  Please do not hesitate to contact either of us or our staff if you have any questions.  We look forward to working with you to lower the deficit in an equitable and effective manner.

Sincerely,

Senate Majority Leader Harry Reid

Senator Robert Menendez

“Saving money requires a lot of difficult choices.  Which programs do we cut in tough times?  Which priorities are more important than others?  As we’ve seen here in the Senate and across the country over the last few months, a lot of people have a lot of different answers to those questions.

“Then there are the choices that aren’t so tough at all.  There’s clear waste in the federal budget and the tax code.  And then there’s Big Oil.  We’re giving billions and billions of dollars every year – $4 billion to be exact – every cent of it taxpayer money – to oil companies that already are more than successful.

“These oil companies made $36 billion in profits during the first quarter of this year alone.  Exxon made 70 percent more this year than last year.

“The industry’s $36 billion in quarterly profits means it’s making $12 billion a month.  That’s $4 billion a week.  And yet the U.S. government is giving these companies $4 billion a year in corporate welfare?

“Why are taxpayers on the hook for oil companies that are doing just fine on their own?

“If we’re serious about reducing the deficit, this is an easy place to start.  It’s a no-brainer.  Let’s use the savings from these taxpayer giveaways to drive down the deficit, not drive up oil company profits.

“Let’s make one thing clear: wasteful subsidies have nothing to do with gas prices.  These oil handouts have existed for decades.  Prices have continued to rise.  Oil executives’ paychecks have gone up too.  The $4 billion a gallon Americans are paying at the pump are not related to these subsidies – but those profits are proof enough that they don’t need them.

“Even Big Oil CEOs like the head of Shell, and Republicans in Congress including the Speaker of the House, have admitted that these subsidies aren’t necessary.

“Some of our conservative colleagues have a hard time stomaching giving a hand to those who need it the most.  We should all agree – in the interest of fairness, common sense, and saving taxpayer money – that we can cut out corporate welfare to those Big Oil firms who need it the least.”

$21 Billion Recouped Over 10 Years Will Go Toward Reducing The Deficit

Washington, D.C.– With the nation’s five largest oil companies taking home nearly $1 trillion in profits over the past decade, a group of Democratic Senators today announced legislation to finally put an end to the unfair tax subsidies that only benefit Big Oil’s bottom line and CEOs. As families are paying more than $4 per gallon in gas prices and doing their part to address the country’s growing deficit, Big Oil needs to step up to the plate and share in the sacrifice to help balance the budget.

U.S. Sens. Robert Menendez (D-NJ), Sherrod Brown (D-OH), Claire McCaskill (D-MO), and Jon Tester (D-MT) announced the introduction of the Close Big Oil Tax Loopholes Act, which will put an end to taxpayer handouts to the 5 largest oil companies making record profits, and use the  billions in savings to help reduce the deficit. The Senators also called on Republicans to support the effort to close the loopholes and join other Republicans, including Speaker Boehner and Representative Ryan, who have voiced support for cutting subsidies.

“At a time when families are feeling the pain at the pump and our deficit keeps growing at an alarming rate, we simply can’t afford to keep giving away billions in taxpayer handouts to oil companies that are doing nothing to help lower prices. The ‘Close Big Oil Tax Loopholes Act’ is based on a simple premise: we need everyone to do their share to lower the deficit, not just working families and the elderly,” Menendez said.

“It’s bad enough that Ohioans have to pay more than $4.00 a gallon at the gas pump. They shouldn’t need to subsidize the oil industry through the tax code as well. Big Oil is reaping big profits while working- and middle-class Ohioans struggle to make ends meet. It’s about time this corporate welfare meet its end,” Brown said.

“If we are going to get serious about addressing our national debt,  we can no longer afford to keep giving away taxpayer’s money to the most profitable companies in the world. There are going to be some tough decisions when it comes to cutting back, but I hope we can agree that our government writing checks to oil and gas companies with tax dollars should be on the chopping block,” McCaskill said.

“For years, the world’s biggest oil companies have slipped their way through every loophole in the book to pad their profits at the expense of American taxpayers,” Tester said.  “This bill restores fairness and holds these corporations accountable to taxpayers, who deserve no less.”

According to a recent report from Citizens for Tax Justice, Big Oil companies spent most of their profits in the purchase of their own stocks and boosting its dividends between 2005-2010. In 2010, four of the largest “Big Five” oil companies (excluding BP due to the oil spill) allocated only 18 percent of their post tax profits on exploration and 60 percent on dividends and stock repurchases. Link to the full Report: http://www.ctj.org/pdf/energy20110429.pdf

Summary of the bill:

Modifications of foreign tax credit rules applicable to major integrated oil companies which are dual capacity taxpayers.

U.S. taxpayers are taxed on their income worldwide, but are entitled to a dollar-for-dollar tax credit for any income taxes paid to a foreign government.  U.S. oil and gas companies have been accused of disguising royalty payments to foreign governments as foreign taxes.  This allows them to lower their taxes in the U.S.  The bill would close this loophole that amounts to a U.S. subsidy for foreign oil production for the Big 5.

Limitation on deduction for income attributable to the production of oil, natural gas, or primary products thereof.

In 2004 Congress enacted Section 199, the domestic manufacturing tax deduction.  In 2008 Congress froze the Section 199 deduction at 6% for all oil and gas activity.  The bill eliminates the Section 199 deduction for the Big 5.

Limitation on deduction for intangible drilling and development costs.

Would deny the Big 5 oil companies the option of expensing Intangible Drilling Costs (IDCs) and require such costs be capitalized. IDCs are expenditures such as wages, fuel, repairs, hauling, and supplies necessary for the drilling of oil wells. Currently, integrated oil companies can expense 70% of the cost of IDCs.  The bill requires the Big 5 to capitalize all of its IDC costs.

Limitation on percentage depletion allowance for oil and gas wells.

Firms that extract oil and gas are permitted a deduction to recover their capital investment under one of two methods.  Cost depletion allows for the recovery of the actual capital investment—the costs of discovering, purchasing, and developing the well—over the period the well produces income.  Under this method, the taxpayer’s total deductions cannot exceed its original investment.

Percentage depletion allows the cost recovery to be computed using a percentage of the revenue from the sale of the oil or gas.  Under this method, total deductions could (and often do) exceed the taxpayer’s capital investment.  The bill repeals percentage depletion for the Big 5.

Limitation on deduction for tertiary injectants.

Tertiary injectants are used in enhanced oil recovery to drive more oil from an existing well.  Currently, oil companies are allowed to deduct the cost of tertiary injectants rather than capitalizing their costs and recovering them over time. The bill requires the Big 5 to capitalize the cost of tertiary injectants it uses during the year and recover those costs over time.

Repeal of Outer Continental Shelf deep water and deep gas royalty relief

Repeals Sections 344 and 345 of the Energy Policy Act of 2005.  Section 344 extended existing deep gas incentives and Section 345 provided additional mandatory royalty relief for certain deepwater oil and gas production.  These changes will help ensure that Americans receive fair value for Federally-owned fossil fuel resources.

Deficit Reduction

All savings realized as the result of the bill’s elimination of the tax breaks and other subsidies currently going to the major integrated oil companies are devoted to deficit reduction.

$21 Billion Recouped Over 10 Years Will Go Toward Reducing The Deficit

Washington, D.C.– With the nation’s five largest oil companies taking home nearly $1 trillion in profits over the past decade, a group of Democratic Senators today announced legislation to finally put an end to the unfair tax subsidies that only benefit Big Oil’s bottom line and CEOs. As families are paying more than $4 per gallon in gas prices and doing their part to address the country’s growing deficit, Big Oil needs to step up to the plate and share in the sacrifice to help balance the budget.

U.S. Sens. Robert Menendez (D-NJ), Sherrod Brown (D-OH), Claire McCaskill (D-MO), and Jon Tester (D-MT) announced the introduction of the Close Big Oil Tax Loopholes Act, which will put an end to taxpayer handouts to the 5 largest oil companies making record profits, and use the  billions in savings to help reduce the deficit. The Senators also called on Republicans to support the effort to close the loopholes and join other Republicans, including Speaker Boehner and Representative Ryan, who have voiced support for cutting subsidies.

“At a time when families are feeling the pain at the pump and our deficit keeps growing at an alarming rate, we simply can’t afford to keep giving away billions in taxpayer handouts to oil companies that are doing nothing to help lower prices. The ‘Close Big Oil Tax Loopholes Act’ is based on a simple premise: we need everyone to do their share to lower the deficit, not just working families and the elderly,” Menendez said.

“It’s bad enough that Ohioans have to pay more than $4.00 a gallon at the gas pump. They shouldn’t need to subsidize the oil industry through the tax code as well. Big Oil is reaping big profits while working- and middle-class Ohioans struggle to make ends meet. It’s about time this corporate welfare meet its end,” Brown said.

“If we are going to get serious about addressing our national debt,  we can no longer afford to keep giving away taxpayer’s money to the most profitable companies in the world. There are going to be some tough decisions when it comes to cutting back, but I hope we can agree that our government writing checks to oil and gas companies with tax dollars should be on the chopping block,” McCaskill said.

“For years, the world’s biggest oil companies have slipped their way through every loophole in the book to pad their profits at the expense of American taxpayers,” Tester said.  “This bill restores fairness and holds these corporations accountable to taxpayers, who deserve no less.”

According to a recent report from Citizens for Tax Justice, Big Oil companies spent most of their profits in the purchase of their own stocks and boosting its dividends between 2005-2010. In 2010, four of the largest “Big Five” oil companies (excluding BP due to the oil spill) allocated only 18 percent of their post tax profits on exploration and 60 percent on dividends and stock repurchases. Link to the full Report: http://www.ctj.org/pdf/energy20110429.pdf

Summary of the bill:

Modifications of foreign tax credit rules applicable to major integrated oil companies which are dual capacity taxpayers.

U.S. taxpayers are taxed on their income worldwide, but are entitled to a dollar-for-dollar tax credit for any income taxes paid to a foreign government.  U.S. oil and gas companies have been accused of disguising royalty payments to foreign governments as foreign taxes.  This allows them to lower their taxes in the U.S.  The bill would close this loophole that amounts to a U.S. subsidy for foreign oil production for the Big 5.

Limitation on deduction for income attributable to the production of oil, natural gas, or primary products thereof.

In 2004 Congress enacted Section 199, the domestic manufacturing tax deduction.  In 2008 Congress froze the Section 199 deduction at 6% for all oil and gas activity.  The bill eliminates the Section 199 deduction for the Big 5.

Limitation on deduction for intangible drilling and development costs.

Would deny the Big 5 oil companies the option of expensing Intangible Drilling Costs (IDCs) and require such costs be capitalized. IDCs are expenditures such as wages, fuel, repairs, hauling, and supplies necessary for the drilling of oil wells. Currently, integrated oil companies can expense 70% of the cost of IDCs.  The bill requires the Big 5 to capitalize all of its IDC costs.

Limitation on percentage depletion allowance for oil and gas wells.

Firms that extract oil and gas are permitted a deduction to recover their capital investment under one of two methods.  Cost depletion allows for the recovery of the actual capital investment—the costs of discovering, purchasing, and developing the well—over the period the well produces income.  Under this method, the taxpayer’s total deductions cannot exceed its original investment.

Percentage depletion allows the cost recovery to be computed using a percentage of the revenue from the sale of the oil or gas.  Under this method, total deductions could (and often do) exceed the taxpayer’s capital investment.  The bill repeals percentage depletion for the Big 5.

Limitation on deduction for tertiary injectants.

Tertiary injectants are used in enhanced oil recovery to drive more oil from an existing well.  Currently, oil companies are allowed to deduct the cost of tertiary injectants rather than capitalizing their costs and recovering them over time. The bill requires the Big 5 to capitalize the cost of tertiary injectants it uses during the year and recover those costs over time.

Repeal of Outer Continental Shelf deep water and deep gas royalty relief

Repeals Sections 344 and 345 of the Energy Policy Act of 2005.  Section 344 extended existing deep gas incentives and Section 345 provided additional mandatory royalty relief for certain deepwater oil and gas production.  These changes will help ensure that Americans receive fair value for Federally-owned fossil fuel resources.

Deficit Reduction

All savings realized as the result of the bill’s elimination of the tax breaks and other subsidies currently going to the major integrated oil companies are devoted to deficit reduction.

Money Saved By Revoking Handouts Will Go Towards Reducing The Deficit

Washington, DC—Nevada Senator Harry Reid and New Jersey Senator Robert Menendez today urged Senate colleagues to join them in ending wasteful taxpayer handouts to big oil companies making record profits while American families make sacrifices to afford rising prices at the pump, and use the savings to reduce the deficit.

Over the last decade, the nation’s five largest oil companies have taken home nearly $1 trillion in profits and tens of billions of dollars in taxpayer subsidies. Every year, taxpayers are giving away more than $4 billion to oil companies in the form of tax deductions, subsidies and royalty relief, the letter says. Meanwhile, they’ve hiked gas prices to $4.00 a gallon in some states.

And CEOs from the Big 5 oil companies have testified that they do not need incentives for oil exploration. And even Speaker John Boehner and Rep. Paul Ryan have said it is time to look at cutting oil subsidies.

“Every one of us is hearing from families back home who are struggling with rising gas prices. At the same time, we’re reading this week about the record-breaking profits that the major oil companies are raking in– more than $30 billion in profits for the first quarter of 2011 alone. Something just doesn’t add up.  Now that the five biggest oil companies have become some of the most profitable companies in the world, taxpayers shouldering $4 a gallon gas prices should not have to foot the bill for tens of billions of outdated, unnecessary subsidies that go straight into the pockets of oil industry executives particularly in light of our increasing deficit. Just as we ask families to do their part to help reduce the deficit, Big oil companies need to step up to the plate and share in the sacrifice.”

The senators believe it is time to work on a bipartisan basis to ask oil companies to pay their fair share and help us lower the deficit.

“By working together to end these wasteful giveaways to oil companies, we will not only make the tax code more fair, but we will decrease the federal deficit by tens of billions of dollars over the next ten years,” they wrote. “To a family struggling to pay rising gas prices, this is not a partisan or political issue – this is an economic issue. In the nature of bipartisanship, let’s work together to put the needs of middle-class families over the whims of the most profitable industry in the world.”

Full text of the letter is below:

Dear Colleague,

Every one of us is hearing from families back home who are struggling with rising gas prices. At the same time, we’re reading this week about the record-breaking profits that the major oil companies are raking in– more than $30 billion in profits for the first quarter of 2011 alone. Something just doesn’t add up.  Now that the five biggest oil companies have become some of the most profitable companies in the world, taxpayers shouldering $4 a gallon gas prices should not have to foot the bill for tens of billions of outdated, unnecessary subsidies that go straight into the pockets of oil industry executives particularly in light of our increasing deficit. Just as we ask families to do their part to help reduce the deficit, Big oil companies need to step up to the plate and share in the sacrifice.

Every year, taxpayers are giving away more than $4 billion to oil companies in the form of tax deductions, subsidies and royalty relief. It has always been questionable whether or not these subsidies for oil companies do anything to encourage new production, and it is especially questionable at a time when oil companies are reporting record profits.  The fact is, oil companies will continue to drill and produce oil with or without these subsidies. Testifying before the Senate in 2005, every CEO of the five biggest oil companies acknowledged that they do not need incentives to explore for oil and gas. And just this year, the former CEO of Shell Oil said “subsidies are not necessary.”

Last week, we were encouraged to hear some of our Republican colleagues, including Speaker Boehner, say that big oil companies “ought to be paying their fair share.” We could not agree more. Closing these loopholes will not raise gas prices for American consumers. Historically, gas prices have risen even as the major oil companies reap billions in tax subsidies that have outlived their usefulness, and there is scant evidence that ending these subsidies will have any effect on how oil and gas are priced in the global market.

In the Senate, we will act imminently to close these loopholes. Given the unprecedented number of lawmakers who have stepped forward in support of this idea for the first time, we believe this new push to end oil subsidies has a strong chance to succeed where previous efforts have failed. We invite ideas from both sides of the aisle about how best to bring these wasteful giveaways to an end. We intend to proceed with a bill that maximizes our chances of garnering bipartisan appeal.

By working together to end these wasteful giveaways to oil companies, we will not only make the tax code more fair, but we will decrease the federal deficit by tens of billions of dollars over the next ten years.

To a family struggling to pay rising gas prices, this is not a partisan or political issue – this is an economic issue. In the nature of bipartisanship, let’s work together to put the needs of middle-class families over the whims of the most profitable industry in the world.

Sincerely,

Senate Majority Leader Harry Reid

Senator Robert Menendez

Money Saved By Revoking Handouts Will Go Towards Reducing The Deficit

Washington, DC—Nevada Senator Harry Reid and New Jersey Senator Robert Menendez today urged Senate colleagues to join them in ending wasteful taxpayer handouts to big oil companies making record profits while American families make sacrifices to afford rising prices at the pump, and use the savings to reduce the deficit.

Over the last decade, the nation’s five largest oil companies have taken home nearly $1 trillion in profits and tens of billions of dollars in taxpayer subsidies. Every year, taxpayers are giving away more than $4 billion to oil companies in the form of tax deductions, subsidies and royalty relief, the letter says. Meanwhile, they’ve hiked gas prices to $4.00 a gallon in some states.

And CEOs from the Big 5 oil companies have testified that they do not need incentives for oil exploration. And even Speaker John Boehner and Rep. Paul Ryan have said it is time to look at cutting oil subsidies.

“Every one of us is hearing from families back home who are struggling with rising gas prices. At the same time, we’re reading this week about the record-breaking profits that the major oil companies are raking in– more than $30 billion in profits for the first quarter of 2011 alone. Something just doesn’t add up.  Now that the five biggest oil companies have become some of the most profitable companies in the world, taxpayers shouldering $4 a gallon gas prices should not have to foot the bill for tens of billions of outdated, unnecessary subsidies that go straight into the pockets of oil industry executives particularly in light of our increasing deficit. Just as we ask families to do their part to help reduce the deficit, Big oil companies need to step up to the plate and share in the sacrifice.”

The senators believe it is time to work on a bipartisan basis to ask oil companies to pay their fair share and help us lower the deficit.

“By working together to end these wasteful giveaways to oil companies, we will not only make the tax code more fair, but we will decrease the federal deficit by tens of billions of dollars over the next ten years,” they wrote. “To a family struggling to pay rising gas prices, this is not a partisan or political issue – this is an economic issue. In the nature of bipartisanship, let’s work together to put the needs of middle-class families over the whims of the most profitable industry in the world.”

Full text of the letter is below:

Dear Colleague,

Every one of us is hearing from families back home who are struggling with rising gas prices. At the same time, we’re reading this week about the record-breaking profits that the major oil companies are raking in– more than $30 billion in profits for the first quarter of 2011 alone. Something just doesn’t add up.  Now that the five biggest oil companies have become some of the most profitable companies in the world, taxpayers shouldering $4 a gallon gas prices should not have to foot the bill for tens of billions of outdated, unnecessary subsidies that go straight into the pockets of oil industry executives particularly in light of our increasing deficit. Just as we ask families to do their part to help reduce the deficit, Big oil companies need to step up to the plate and share in the sacrifice.

Every year, taxpayers are giving away more than $4 billion to oil companies in the form of tax deductions, subsidies and royalty relief. It has always been questionable whether or not these subsidies for oil companies do anything to encourage new production, and it is especially questionable at a time when oil companies are reporting record profits.  The fact is, oil companies will continue to drill and produce oil with or without these subsidies. Testifying before the Senate in 2005, every CEO of the five biggest oil companies acknowledged that they do not need incentives to explore for oil and gas. And just this year, the former CEO of Shell Oil said “subsidies are not necessary.”

Last week, we were encouraged to hear some of our Republican colleagues, including Speaker Boehner, say that big oil companies “ought to be paying their fair share.” We could not agree more. Closing these loopholes will not raise gas prices for American consumers. Historically, gas prices have risen even as the major oil companies reap billions in tax subsidies that have outlived their usefulness, and there is scant evidence that ending these subsidies will have any effect on how oil and gas are priced in the global market.

In the Senate, we will act imminently to close these loopholes. Given the unprecedented number of lawmakers who have stepped forward in support of this idea for the first time, we believe this new push to end oil subsidies has a strong chance to succeed where previous efforts have failed. We invite ideas from both sides of the aisle about how best to bring these wasteful giveaways to an end. We intend to proceed with a bill that maximizes our chances of garnering bipartisan appeal.

By working together to end these wasteful giveaways to oil companies, we will not only make the tax code more fair, but we will decrease the federal deficit by tens of billions of dollars over the next ten years.

To a family struggling to pay rising gas prices, this is not a partisan or political issue – this is an economic issue. In the nature of bipartisanship, let’s work together to put the needs of middle-class families over the whims of the most profitable industry in the world.

Sincerely,

Senate Majority Leader Harry Reid

Senator Robert Menendez

SPEAKER JOHN BOEHNER: Right. Listen, they’re gonna pay their fair share in taxes and they should… We’re in a time when– when the federal government is short on revenues. We need to control spending but we need to have revenues to keep the government movin’. And they oughta be payin’ their fair share

JONATHAN KARL: Well, the President’s proposed doing away with eight– eight different subsidies. This would be about $4 billion a year. You– you think that’s worth doin’?

SPEAKER JOHN BOEHNER: I think we gotta take a look at it.  [ABC News, 4/25/11]

Yet Senate Republican Leaders Have Opposed Repealing Oil and Gas Tax Breaks:

McConnell Called Repeal of Big Oil Company Tax Breaks “Mini-Van Tax.” McConnell said in a floor statement,  “At a time when increasing gas prices are already threatening our economic recovery a minivan tax that some on the other side have proposed won’t solve our nation’s fiscal crisis.”  [McConnell Floor Statement, 3/9/11]

·         McConnell Against Ending Subsidies For Oil Companies, Falsely Claims As A Tax Increase. In a statement McConnell says: “President Obama has proposed raising energy taxes of up to $90 billion over the next 10 years—most of which would be passed on to the consumer in the form of higher gas and electricity prices. The taxes could also slow down domestic oil production, enough to put up to 165,000 jobs in jeopardy over the next 10 years…Republicans have proposed two simple ideas that would provide real relief at the pump. First, we should seriously reform the rules and regulations holding America back from increased domestic energy production. And second, we should block any new regulations that would drive up the costs of energy production.” [Press Release, 4/22/11]

Cornyn In Favor Of Giving Billions In Subsidies To Oil Companies. Business Week reported that Cornyn, “Opposes the President’s efforts to repeal oil- and gas-industry tax breaks.” [Business Week, 4/07/11]

·         John Cornyn Claims Tax Hikes on Big Oil Will Result in Higher Prices Felt at Pump. Senator JOHN CORNYN (Republican, Texas): It may be fashionable to beat up on Big Oil and say, let’s tax the oil companies because they’re making too much money. But you know what, if we raise taxes on the oil companies, we all end up paying an increased price of gasoline at the pump. [NPR, 4/16/08]

“I agree with the President that it is long past time to end wasteful subsidies to big oil companies that are raking in record profits. If Senate Republicans are serious about cutting spending, as Democrats are, they’ll stop filibustering our efforts to eliminate corporate welfare that even a former Shell Oil CEO said is unnecessary.

“Rather than giving handouts to big corporations, we should be investing in clean energy development and construction here at home to create jobs, diversify our economy, break our dangerous dependence on oil and make our nation safer. As a bipartisan delegation of senators saw first-hand, China and other countries are aggressively investing in this industry for exactly those reasons. Abundant solar, wind and geothermal resources in Nevada and across the country combined with American know-how give our country the ability to be the world leader in clean energy. We should not lose our edge in this global competition just so Republicans can give even more taxpayer money to companies that don’t need it.”

Republican Budget Protects Nearly $44 Billion in Tax Loopholes and Subsidies For Oil and Gas Companies While Forcing Seniors To Pay the Same Amount in Additional Costs for their Prescription Drugs. The Republican budget protects $44 billion in unnecessary and expensive tax breaks and subsidies for oil and gas companies, even as oil companies are reporting record profits. Meanwhile, The Republican proposal would “re-open” the prescription drug donut hole and cost the average senior who falls into the donut hole approximately $11,794 between 2012 and 2020. Over that time, Ryan’s budget will cost seniors an estimated $44 billion in prescription drug costs, including $2.2 billion next year alone.  [Reuters, 2/1/10; OMB, FY12 Budget Proposal; HHS, 11/4/10; DPCC Report, 4/14/11; Republican Budget Proposal, 4/15/11].

Republican Plans To Dismantle Medicare and Provide Tax Giveaways to Big Oil and Gas Companies Extremely Unpopular With Americans. According to a new ABC/Washington Post survey, 84 percent of Americans oppose the Republican plan to privatize Medicare and force seniors to pay twice as much for their health care. Meanwhile, a February 2011 NBC / Wall Street Journal poll found that 74% of Americans support eliminating tax credits for the oil and gas industries in order to reduce the deficit. [ABC/Washington Post Poll, 4/20/11; NBC/Wall Street Journal Poll, February 2011]

Former Big Oil Executive: “Such Subsidies Are Not Necessary.” Large oil companies don’t need tax subsidies when oil prices are high, a former CEO of Shell Oil said in February. “In the face of sustained high oil prices it was not an issue—for large companies—of needing the subsidies to entice us into looking for and producing more oil,” John Hofmeister told National Journal Daily…“The fear of low oil prices drives some companies to say that subsidies should be sustained,” Hofmeister said. “And my point of view is that with high oil prices such subsidies are not necessary.” [National Journal, 2/11/11]

Study: “Oil Production Is Among the Most Heavily Subsidized Businesses.” “An examination of the American tax code indicates that oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process… According to the most recent study by the Congressional Budget Office, released in 2005, capital investments like oil field leases and drilling equipment are taxed at an effective rate of 9 percent, significantly lower than the overall rate of 25 percent for businesses in general and lower than virtually any other industry.” [New York Times, 7/4/10]

Biggest Oil Companies’ Profits Continue to Skyrocket. Exxon Mobil reported a 53 percent increase in its fourth-quarter 2010 profit. Exxon Mobil’s profit in the quarter was $9.25 billion compared with $6.05 billion in the period a year ago. Chevron’s fourth-quarter earnings surged 72 percent. Chevron reported a profit of $5.3 billion, up from $3.07 billion a year earlier. Royal Dutch Shell PLC reported that fourth quarter profit more than tripled from a year earlier. Fourth quarter net profit was $6.79 billion, up from $1.96 billion in the same period a year earlier. [New York Times, 1/31/11; Wall Street Journal, 1/28/11; Associated Press, 2/3/11]

Biggest Oil Companies Made Nearly $1 TRILLION in Profits Over the Last 10 Years. The big five oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Shell—made a total profit of nearly $1 trillion over the past decade. [Center for American Progress, 1/31/11]

Beijing, China – Nevada Senator Harry Reid issued the following statement on the first anniversary of the BP oil spill, which began in the Gulf of Mexico on April 20, 2010. Reid is in China this week, leading an historic delegation of 10 U.S. Senators to clean-energy sites across the country and to discussing other pressing matters with Chinese government and business leaders.

“The damage of BP’s devastating oil spill will be felt for years to come. For the families of the 11 workers killed in the explosion, no policy change or business decision can replace lost loved ones.

“Some of the other scars of that spill will be visible — in the water and wildlife and throughout the environment. But we also will endure economic pain — in the efforts of small businesses and communities to rebuild.

“These environmental and economic impacts remind us of one of the most important lessons from this tragedy: the United States must reduce our dependence on oil.

“We must invest more quickly and more significantly in job-creating American clean energy projects that will strengthen our economy, environment and national security, as well as setting long-term policies to promote clean alternatives to oil.  At this critical time in the recover of our economy, we cannot afford to keep giving huge tax breaks to big oil companies that even some of their executives have admitted they don’t need.

“During our Congressional delegation’s week-long trip to China, I am looking forward to learning more about how the Chinese are successfully investing in renewable energy, to see what we can do most effectively in the United States to encourage rapid investment in this important sector of our economy. Our nation has vast renewable energy resources, especially in states like Nevada, that can solve our environmental, economic and national security problems but only if we don’t make the mistakes of the past and choose instead to move forward to a clean energy future.”

Republican Budget Would Also Decimate Investments In Clean Energy, Making America More Reliant On Oil From Unstable Regions Of The World

Democrats Release New Web Video Compilation Of Independent Experts Explaining How Excessive Speculation Is Driving Up Prices At The Pump

Washington, DC – With consumers feeling the pinch of rising gas prices, forty-eight Senate Democrats sent a letter to Senate Minority Leader Mitch McConnell and House Speaker John Boehner today calling on Republicans to abandon a proposal that would make excessive speculation in the oil markets even worse.

Republicans’ reckless spending bill, H.R. 1, would reduce funding for the Commodity Futures Trading Commission (CFTC) by one-third, forcing layoffs to the watchdog agency that polices market manipulation that drives up oil prices.

Experts say that with demand fairly stable and supply at an all-time high, speculation is a factor driving up gas prices. One expert said speculation may add as much as $1.50 a gallon to the price consumers pay at the pump for gasoline.

***Click here to watch commodities experts explain how Republicans’ dangerous plan could leave excessive speculation unchecked.***

“At a time when gas prices are rising and squeezing American families, we have a responsibility to provide our watchdogs the resources they need to fulfill their important oversight and regulatory responsibilities,” Democrats wrote. “We stand ready to work with you to come to a responsible budget compromise that will not do anything to make our gas price problem worse, or undermine the progress we are making in developing the clean energy technologies we need so we can better compete with countries like China.”

Republicans’ reckless spending bill would also cut billions from development of alternative fuels and clean energy technology, which would set back efforts to stay competitive with growing nations such as China while simultaneously putting America’s independence from foreign oil even further out of reach. During this period of unrest in the Middle East, freeing ourselves from our reliance on foreign oil is more important now than ever before.

“This is a bad idea that has to go,” Senator Murray said. “At a time of skyrocketing gas prices, cutting support for the very agency charged with protecting consumers from excessive oil speculation on Wall Street is a recipe for higher prices at the pump and less economic security. There are responsible cuts, and then there are cuts like this one, which target consumers at a time when they can least afford it.”

The senators urged McConnell and Boehner to work with Democrats to negotiate a responsible budget that makes smart cuts that don’t undermine our transition to a safe, clean and affordable energy future.

The senators’ letter is below:

Dear Minority Leader McConnell:

As we work toward a long-term budget compromise to keep the government running through this year, we urge you to abandon the reckless energy proposals in the House-passed Continuing Resolution (H.R 1) that will condemn our country to continued reliance on foreign oil and allow market manipulation that could lead to gas prices rising unchecked.

As you know, H.R. 1 would reduce funding for the Commodity Futures Trading Commission (CFTC) by one-third.  The CFTC serves as an important “cop on the beat,” working to protect American consumers by cracking down on manipulation and other market abuses that can drive up oil prices.  Yet your spending plan would shrink the CFTC budget back to 2008 levels, when Americans were blindsided by both record high gas prices and a financial crisis that cost us millions of jobs. According to CFTC Chairman Gary Gensler, these cuts would cause “significant curtailment of staff and resources.”  At a time where gas prices are rising and squeezing American families, we have a responsibility to provide our watchdogs the resources they need to fulfill their important oversight and regulatory responsibilities.

We find it equally troubling that your preferred budget would cut billions of dollars in investments in critical programs focused on developing new alternative fuels and clean energy technologies, undermining our competitiveness and increasing our trade deficit with oil producing nations.  We urge you to reverse these policies that will only set our nation backward, and put America’s independence from foreign oil even further out of reach.

We stand ready to work with you to come to a responsible budget compromise that will not do anything to make our gas price problem worse, or undermine the progress we are making in developing the clean energy technologies we need so we can better compete with countries like China.  Together, we can craft a sensible fiscal policy that invests in what we need to grow and cuts what doesn’t, without undermining our mission to transition to a safe, clean and affordable energy future.

Sincerely,

Senator Harry Reid

Senator Dick Durbin

Senator Chuck Schumer

Senator Patty Murray

Senator Debbie Stabenow

Senator Kent Conrad

Senator Maria Cantwell

Senator Bill Nelson

Senator Max Baucus

Senator Barbara Mikulski

Senator Jeanne Shaheen

Senator Jeff Merkley

Senator Mark Begich

Senator Dianne Feinstein

Senator Mark Pryor

Senator Richard Blumenthal

Senator Mark Udall

Senator Kay Hagan

Senator Ben Cardin

Senator Al Franken

Senator Barbara Boxer

Senator Frank Lautenberg

Senator Jack Reed

Senator Carl Levin

Senator Mark Warner

Senator Tom Carper

Senator Daniel Akaka

Senator Tom Harkin

Senator Bob Menendez

Senator Ron Wyden

Senator Claire McCaskill

Senator Chris Coons

Senator Michael Bennet

Senator Sherrod Brown

Senator Jon Tester

Senator Amy Klobuchar

Senator Sheldon Whitehouse

Senator Bob Casey

Senator John Kerry

Senator Jay Rockefeller

Senator Jeff Bingaman

Senator Daniel Inouye

Senator Joe Lieberman

Senator Bernie Sanders

Senator Patrick Leahy

Senator Herb Kohl

Senator Tim Johnson

Senator Tom Udall

Cc: Speaker John Boehner

Here are the facts Republicans ignore:

Fact: U.S. oil production, including that on federal lands and waters,  has been increasing since 2008, with its largest single-year increase indecades in 2009. In the last two years, oil production from the federal U.S. Outer Continental Shelf has increased by more than a third, from 446 million barrels in 2008 to an estimated more than 600 million barrels in 2010.  Oil production from onshore public lands increased by 5 percent over the last year, from 109 million barrels in 2009 to 114 million barrels in 2010.  U.S. oil production is forecast to continue to increase through 2035.  And the U.S. oil industry has access to more than 60 million acres of federal land and water that they have not taken action to put into production.  [Bureau of Land Management and Energy Information Administration (EIA)]

Fact:Nearly 20 percent of U.S. oil refinery capacity currently sits idle, the highest idle capacity rate in over a decade; clearly, we do not have a problem with lack of refinery capacity. [EIA]

Fact: EPA’s current Clean Air Act standards for vehicles are projected to save consumers money at the pump – $130 – $160 per car per year – and save 1.8 billion barrels of oil. [EPA]

Fact: Oil production in the U.S. Gulf of Mexico continued unabated throughout the Deepwater Horizon disaster. The moratorium that was implemented after the Deepwater Horizon disaster was lifted in October 2010, affected only the initiation of new deepwater drilling activity, and had no application to existing producing wells.  Despite the Deepwater Horizon disaster, oil production in the Gulf of Mexico increased in 2009 and 2010 after falling since 2004. [EIA]

Fact: The best way to reduce our long-term dependence on oil from dangerous regions of the world is by investing in alternative fuels. Increased domestic drilling will not end the addiction to oil which compromises our economic and national security. With less than 1.5% of the world’s oil reserves, the only way to reduce long term dependence on oil is by investing in a alternative fuel sources.  The Democrats’ clean energy agenda would improve vehicle efficiency, increase our use of alternative fuels, and save more oil between now and 2030 than the U.S. currently has in oil reserves.  The Republican spending plan cuts funding for alternative energy sources by more than $700 million. It also slashes the Department of Energy’s loan guarantee program for clean energy developers and manufacturing companies designed to bring clean energy technologies to commercial scale use. [NYTimes 02/14/11, Forbes 03/03/11]

Myth: Domestic oil production is down in the United States under President Obama.

Fact: U.S. oil production, including that on federal lands and waters,  has been increasing since 2008, with its largest single-year increase in decades in 2009.  U.S. oil production is forecast to continue to increase through 2035.  And the U.S. oil industry has access to more than 60 million acres of federal land and water that they have not taken action to put into production.  [Bureau of Land Management and Energy Information Administration (EIA)]

Myth: Last fall’s moratorium on drilling new deepwater wells in the Gulf  reduced U.S. oil supply and is driving up gas prices.

Fact: Oil production in the U.S. Gulf of Mexico continued unabated throughout the Deepwater Horizon disaster, even while oil was spilling into the Gulf.   The moratorium – which was lifted in October 2010 — affected only the initiation of new deepwater drilling activity and had no application to existing producing wells.  Despite the Deepwater Horizon disaster, oil production in the Gulf of Mexico increased in 2009 and 2010 after falling since 2004.  Meanwhile, gas prices have increased over the last month, at the same time as domestic oil production has increased.  [EIA]

Myth: We can reduce oil prices if we just “drill baby drill” domestically.

Fact: More drilling is not a solution to high oil prices.  While U.S. oil production has dramatically increased in the last two years, oil prices have increased  as well.  In its 2007 Annual Energy Outlook, the Energy Information Administration analyzed the impacts of lifting drilling moratoria on the Atlantic, Pacific, and eastern Gulf coasts and found that: “The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030. Because oil prices are determined on the international market, however, any impact on average wellhead prices is expected to be insignificant.”  [EIA]

Myth: The Republican “all of the above” energy strategy will reduce consumption and make us less dependent on foreign oil.

Fact: A true “all of the above” strategy would require focus on transportation efficiency and alternatives, which have proven track records of reducing our oil consumption.  Increased domestic drilling will not end the addiction to oil which compromises our economic and national security.  With less than 1.5% of the world’s oil reserves, the only way to reduce long term dependence on oil is by investing in a clean energy economy.   The Energy Independence and Security Act of 2007, which improved vehicle efficiency and increased our use of biofuels, will save more oil between now and 2030 than the U.S. currently has in oil reserves.  The Republican spending bill cuts funding for Energy Efficiency and Renewable Energy by more than $700 million.  It also slashes the Department of Energy’s loan guarantee program for clean energy developers and manufacturing companies designed to bring clean energy technologies to commercial scale use.  [NYTimes 02/14/11, Forbes 03/03/11]

Myth: The EPA’s regulation of oil refineries and the President’s Cap & Trade policy is to blame for higher gas prices.

Fact: 18 percent of U.S. oil refinery capacity currently sits idle, the highest idle capacity rate in over a decade; clearly, we do not have a problem with lack of refinery capacity.   EPA’s current Clean Air Act standards for vehicles are projected to save consumers money at the pump — $130 – $160 per year – and save 1.8 billion barrels of oil.  And, of course, the cap and trade proposal never became law.  To blame that policy proposal for gasoline price increases is yet another example of a cynical attempt to gain political points rather than address our fundamental addiction to oil.  [EIA and EPA]