Obama Wants To Eliminate Tax Breaks For Oil Companies

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Originally published on sister site Gas 2.


It’s tax season again, and that means the annual plea from the Obama Administration for eliminating $4 billion in annual federal tax incentives for the oil and natural gas industry.  This year there was an additional request however, earmarking that money for advanced alternative fuel technology research. Does it stand a chance of passing?

Every year around tax season, President Obama asks that the taxpayer subsidies that go to oil and gas companies be repealed. The logic being that since these companies are making record-breaking profits, they don’t need subsidies. That sounds logical. In addition to abolishing the subsidies, the President also asked to cut tax credits for oil and gas produced from marginal wells.

Notably different this year was Obama’s request for $2 billion for alternative fuel research projects – with the $2 billion coming directly from royalties from oil and gas development on federal land. The federal land catch is an interesting tactic, as companies are lining up to start drilling on federal lands containing once-unreachable natural gas and oil pockets through fracking.The proposal also included new inspection fees totalling $48 million for onshore oil and gas drilling on federal lands, though obviously some people are wary of opening places like George Washington National Forest to fracking.

Unfortunately, these annual proposals are mostly symbolic in nature. Congress is responsible for writing and passing government spending bills, not the President. Will we ever see the corporate handouts to oil and gas companies ended?

Source: Platts.com | Image: Argonne National Laboratories

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28 thoughts on “Obama Wants To Eliminate Tax Breaks For Oil Companies

  • CleanTechnica: do you realize that at the top of this article, there is a banner ad from TransCanada, promoting the Keystone XL pipeline ??!

    • They don’t chose the ads. They are probably with Google and the ads are personalized. The banner I get is for an energy efficient heat pump wash dryer in Dutch. You probably have a search history for Keystone XL.

      • I’ve never searched any of the keywords associated with that AD and it’s on my browser as well…So someone chooses the ads, regardless of who, and that someone chose TransCanda propaganda…

        • Searching for the keywords associated with an AD is not a prerequisite for seeing that AD.

          • no, but Gmail reads you email too to build your advertisement profile. As well as tracks what sites you have visited.

        • Please calm down. Ad companies are not out to get you. In fact, if you knew about browser extensions then you could have adblock and not see any ads, but you knew that right?

        • I actually do SEM for work. That ad spot up there is likely part of the Google Display Network. Companies can create ads for this network and then whenever there’s an open display network ad spot, that ad has a chance of being put there. It’s likely that TransCanada has honed their ads to be placed on news sites and maybe specifically this site. The type of ad’s that ‘follow’ you are usually Dynamic Remarketing ads. The way those latch onto you are like this: Say you were to visit amazon.com and you don’t buy anything; well, when you visit the site your browser grabs a peice of code that, when you come across one of these DisNet ad spots, will say “Hey! This guy came to amazon.com, we have ads with you, display an ad to this guy!” and thus you get the following ads.

          • To add to this cleantechnica can, if they want to, block specific advertisers from advertising on their site. This is usually done to increase ad revenue ie. block a poor performing ad in favour of better performing ones. So maybe the TransCanada add is big money for them or they haven’t gotten around to blocking advertisers.

        • Someone , don’t know who so lets blame Obama.

        • My banner is for clean Solar Energy!

    • Yup, personalized ads, mine is for solar.

    • the ad at the top was publisher clearing house when I opened it!!!

  • It’s a sad state of affairs: the money the oil companies spend on lobbying TO DATE has over a 50 to 1 ANNUAL return in the form of these subsidies. Lobbying has the highest returns to be had anywhere short of robbing a bank, but only if you’re a big enough corporate “person” to actually affect the outcome of elections. I don’t expect government largesse flowing to the powerful and connected to stop until we fundamentally reform our election laws and change the makeup of Congress. Since the people utterly dependent on this corrupt status quo are the only ones who can actually change it, we’re in for a long, hard slog just to REDUCE government distortion of energy markets!

    • “Lobbying has the highest returns to be had anywhere short of robbing a bank,”

      Higher, even if you get very lucky with minimal tools, there’s still a massive risk of prison.

  • Good for him. I agree that companies making more profit than any other company in the history of the world probably don’t need my taxpayer dollars to stay in business.

    • That just makes too much sense, and common sense has become very rare these days.

  • If they remove the tax breaks, will that not only up the cost of oil for the consumer. I figure that these oil companies would raise their prices to acclimate their prices?

    • They would because they are sleazy and do it because they can, then cry about the tax dollars as an excuse to do so.

      • That’s what I’m thinking. The uninformed American that does not follow politics can’t be mad for their gas prices staying the same when they are ignorant to the changes that are happening in their country. Even if these tax breaks were to go away, I doubt most of the country would even know enough to ask why the price of gas hasn’t fallen.

  • “Will we ever see the corporate handouts to oil and gas companies ended?”
    Roughly about the same time hell reaches <=0°C.

  • How socialistic of him.

    • We should have the CIA investigate him.

  • So they should be eliminated. Same for Canada btw. But the US Congress is run by big oil and we will never see it happen. I doubt we will ever see it happen in Canada as well. Yet politicians will cut things to the poor like food stamps etc After all it is a ‘sin’ to remove subsidies to Big Oil. This just shows the US is a corportist state aka fascist and not a capitalist one, as with capitalism they would get nothing and sink and swim on their own instead of money from tax payers they do not need…(anywhere in the world really)

    • Removing a subside from oil, is a new tax!

  • Q. “Will we ever see the corporate handouts to oil and gas companies ended?”
    A. “No.”

  • You are all wrong. It is just a matter of time now. Even if the USA is a “corporatist state”, and I agree with that, …even then, solar, wind, EVs/EREVs, and energy storage are all still dropping in cost …They are still becoming more economical, more profitable. Oil and coal are becoming less profitable. NG will leap in price when (not if) we start exporting it. Solar in particular is the cell phone of the power industry. As the profit margins and profit volumes continue to grow, the balance of power will change. It has already been happening some. You all know this. The cup is 3/4 full! The tide has already changed in favor of renewables!
    I doubt Obama will get this past the congress this year, but notice every year he asks to cut these oil subsidies. Every year it’s blocked. This year is congressional elections. How do candidates answer questions about this? How will a question about this be answered in 2016 presidential debates?
    How will the Idiot-Abbott government look when they come up for re-election if they’ve made the stranded asset problem even worse and electricity prices are even higher? Solar, wind, and energy storage prices keep dropping. Electricity is ridiculously expensive in Australia, twice the price of the USA. Abbott isn’t doing anything to workout the inevitable utility paradigm (ok business model) shift. How will that look for him in a few short years?
    Good volleyball. Setup it up …wait for it …ok NOW …SPIKE IT!
    All of you here, please get out and vote when the time comes.
    btw Ads are for ignoring, not rehashing.
    The very rich, the plutocracy, aren’t bad people. If you cook them slow and use a good barbeque sauce they’re pretty nice really.

  • Just means instead of the government, taxpayers will be paying the oil companies… Either way oil companies will do fine..

    • The government paying = taxpayers paying.

      Perhaps you mean if we cease taxpayer support the prices will rise at the pump. That’s fine to some extent. It would make EVs and PHEVs more attractive. But too much increase could damage the economy.

Comments are closed.