Big Change, Not Big Oil

By Carl Pope
TomPaine.com

Wednesday 17 January 2007

The disastrous effects of the energy policy written for Big Oil by Big Oil came home to roost last year. While American families had to cope with skyrocketing energy costs, oil companies raked in record profits - due in no small measure to the generous giveaways engineered by the president and his friends in Congress. The first step toward an energy policy need and deserve is to roll back these billions of dollars in unnecessary subsidies for outdated energy industries, and to redirect the money to programs that benefit American jobs and families, help end our dangerous oil dependence and put us on the path toward real energy security. Fortunately, on Thursday the new Congress is poised to take just such an action.

On Election Day, Americans rejected the dirty politics wrought by Big Oil's deep pockets and the dirty outdated technologies of yesterday that threaten our security, our pocketbooks and our environment. Even as energy costs continued to rise, Big Oil's friends in Congress had continued to push for billions more in subsidies and tax breaks while ignoring common sense proposals that would save consumers money, help curb global warming, and fight our dangerous dependence on oil. Election-day polling by Lake Research found that 74 percent of responders said their vote was influenced by dissatisfaction with Big Oil's influence in Congress and the desire to embrace an alternative. In a year where voters saw $3-a-gallon gas and a $400 million retirement package at ExxonMobil, it is hardly surprising that 96 percent of voters said they wanted a new direction for energy.

Since some of Big Oil's best friends have been shown the door, the new Congress has a solid opportunity and responsibility to move America forward. For example, for the past several years the oil and gas industry has received numerous tax breaks and loopholes that make it easier for them to avoid paying taxes on the oil they drill for. These range from changing the definition of oil for a "commodity" to a "service," to reducing the amount in royalties they have to pay the government for oil drilled on leased public land.

On Thursday the House will vote on H.R. 6, which will cut an estimated $13 billion worth of handouts to the oil industry. The money saved and generated from this legislation will be placed into a fund for various initiatives and programs to promote cleaner, safer and more affordable energy solutions. Sending the "stop payment" notice to Big Oil is an important first step of the 100 Hours Agenda. The next step will be to make sure that the new funds are spent on the energy solutions that provide the best deal for the American People.

Congress can enact and extend several incentives that directly benefit American families and businesses. Beginning this past October, consumers buying some of the most fuel-efficient vehicles on the road only received half the original tax credit due to an arbitrary cap. Come April 1, consumers will only receive a quarter of the original tax credit for some vehicles and they will receive none at all after September 1. Even President Bush has said he supports removing the arbitrary cap - a policy that hurts consumers and only stands to increase our dependence on oil.

Congress can also authorize and extend several other incentives that will save Americans money, reduce our global warming emissions and help break our addiction to oil. Increasing incentives for green buildings, for example, will encourage the construction of the most energy efficient buildings possible. This will reduce energy consumption - obviating the need for new, costly and potentially dirty power plants - reduce emissions, and save businesses money on their energy bills.

Many similar incentives exist or could be created to encourage investments in renewable energy. The renewable energy production tax credit has already begun to work but is set to expire this year. Congress should extend it to make sure the momentum to convert to renewable energy like wind and solar power isn't lost.

Businesses and consumers understand that these investments are economically advantageous and environmentally beneficial in the long-term; however, higher initial costs often act as a barrier. Congress can help develop markets and foster investments in efficiency and renewables. Of course once the House votes, we will need to see similar action in the Senate. By taking the next step, Congress can make sure our energy policies directly benefit American families and consumers while fighting dangerous global warming pollution.

Carl Pope is executive director of the Sierra Club, the nation's oldest and largest grassroots environmental organization.

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