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US taxpayers subsidizing world’s biggest fossil fuel companies

Repost from The Guardian

US taxpayers subsidising world’s biggest fossil fuel companies

Shell, ExxonMobil and Marathon Petroleum got subsidises granted by politicians who received significant campaign contributions from the fossil fuel industry, Guardian investigation reveals
By Damian Carrington and Harry Davies, 12 May 2015 07.00 EDT
Marathon Petroleum refinery in Canton, Ohio, got a job subsidy scheme worth $78m when it started in 2011. Photograph: PR

The world’s biggest and most profitable fossil fuel companies are receiving huge and rising subsidies from US taxpayers, a practice slammed as absurd by a presidential candidate given the threat of climate change.

A Guardian investigation of three specific projects, run by Shell, ExxonMobil and Marathon Petroleum, has revealed that the subsidises were all granted by politicians who received significant campaign contributions from the fossil fuel industry.

The Guardian has found that:

  • A proposed Shell petrochemical refinery in Pennsylvania is in line for $1.6bn (£1bn) in state subsidy, according to a deal struck in 2012 when the company made an annual profit of $26.8bn.
  • ExxonMobil’s upgrades to its Baton Rouge refinery in Louisiana are benefitting from $119m of state subsidy, with the support starting in 2011, when the company made a $41bn profit.
  • A jobs subsidy scheme worth $78m to Marathon Petroleum in Ohio began in 2011, when the company made $2.4bn in profit.

“At a time when scientists tell us we need to reduce carbon pollution to prevent catastrophic climate change, it is absurd to provide massive taxpayer subsidies that pad fossil-fuel companies’ already enormous profits,” said senator Bernie Sanders, who announced on 30 April he is running for president.

Sanders, with representative Keith Ellison, recently proposed an End Polluter Welfare Act, which they say would cut $135bn of US subsidies for fossil fuel companies over the next decade. “Between 2010 and 2014, the oil, coal, gas, utility, and natural resource extraction industries spent $1.8bn on lobbying, much of it in defence of these giveaways,” according to Sanders and Ellison.

In April, the president of the World Bank called for the subsidies to be scrapped immediately as poorer nations were feeling “the boot of climate change on their neck”. Globally in 2013, the most recent figures available,the coal, oil and gas industries benefited from subsidies of $550bn, four times those given to renewable energy.

“Subsidies to fossil fuel companies are completely inappropriate in this day and age,” said Stephen Kretzmann, executive director of Oil Change International, an NGO that analyses the costs of fossil fuels. OCI found in 2014 that US taxpayers were subsidising fossil fuel exploration and production alone by $21bn a year. In 2009, President Barack Obama called on the G20 to eliminate fossil fuel subsidies but since then US federal subsidies have risen by 45%.

“Climate science is clear that the vast majority of existing reserves will have to stay in the ground,” Kretzmann said. “Yet our government spends many tens of billions of our tax dollars – every year – making it more profitable for the fossil fuel industry to produce more.”

Tax credits, defined as a subsidy by the World Trade Organisation, are a key route of support for the fossil fuel industry. Using the subsidy tracker tool created by the Good Jobs First group, the Guardian examined some of the biggest subsidies for specific projects.

Shell’s proposed $4bn plant in Pennsylvania is set to benefit from tax credits of $66m a year for 25 years. Shell has bought the site and has 10 supply contracts in place lasting up to 20 years, including from fracking companies extracting shale gas in the Marcellus shale field. The deal was struck by the then Republican governor, Tom Corbett, who received over $1m in campaign donations from the oil and gas industry. According to Guardian analysis of data compiled by Common Cause Pennsylvania, Shell have spent $1.2m on lobbying in Pennsylvania since 2011.

A Shell spokesman said: “Shell supports and endorses incentive programmes provided by state and local authorities that improve the business climate for capital investment, economic expansion and job growth. Shell would not have access to these incentive programmes without the support and approval from the representative state and local jurisdictions.”

ExxonMobil’s Baton Rouge refinery is the second-largest in the US. Since 2011, it has been benefitting from exemptions from industrial taxes, worth $118.9m over 10 years, according to the Good Jobs First database. The Republican governor of Louisiana, Bobby Jindal has expressed his pride in attracting investment from ExxonMobil. In state election campaigns between 2003 and 2013, he received 231 contributions from oil and gas companies and executives totalling $1,019,777, according to a list compiled by environmental groups.

A spokesman for ExxonMobil said: “ExxonMobil will not respond to Guardian inquiries because of its lack of objectivity on climate change reporting demonstrated by its campaign against companies that provide energy necessary for modern life, including newspapers.”

The Guardian is running a campaign asking the world’s biggest health charities, the Bill and Melinda Gates Foundation and the Wellcome Trust, to sell their fossil fuel investments on the basis that it is misguided to invest in companies dedicated to finding more oil, gas and coal when current reserves are already several times greater than can be safely burned. Many philanthropic organisations have already divested from fossil fuels, including the Rockefeller Brothers Fund whose wealth derives from Standard Oil, which went on to become ExxonMobil.

In Ohio, Marathon Petroleum is benefitting from a 15-year tax credit for retaining 1,650 jobs and a 10-year tax credit for creating 100 new jobs. The subsidy is worth $78.5m, according to the Good Jobs First database. “I think Marathon always wanted to be here,” Republican governor John Kasich said in 2011. “All we’re doing is helping them.” In 2011, Kasich was named as the top recipient of oil and gas donations in Ohio, having received $213, 519. The same year Kasich appointed Marathon Petroleum’s CEO to the board of Jobs Ohio, a semi-private group “in charge of the economic growth in the state of Ohio”.

A spokesman for Marathon Petroleum said: “The tax credit recognises the enormous contribution we make to the Ohio economy through the taxes we pay and the well-paying jobs we maintain. We have more than doubled the 100 new jobs we committed to create.” The spokesman said the company paid billions of dollars in income and other taxes every year across the US.

“Big oil, gas, and coal have huge influence on politicians and governments and they get that influence the old fashioned way – they buy it,” said Kretzmann. “Through campaign finance, lobbying, advertising and superpac spending, the industry has many ways to influence candidates and government officials seeking re-election.”

He said fossil fuel subsidies were endemic in the US: “Every single well, pipeline, refinery, coal and gas plant in the country is heavily subsidised. Big Fossil’s lobbyists have done their jobs well for the last century.”

Ben Schreiber, at Friends of the Earth US, said. “There is a vibrant discussion about the best way to keep fossil fuels in the ground – from carbon taxation to divestment – but ending state and federal corporate welfare for polluters is one of the easiest places to start.”

Schreiber also defended subsidies for renewable energy: “Fossil fuels are a mature technology while renewable energy is nascent and still developing. It makes sense to subsidise technologies that are going to help solve climate change, but not to do the same for those that are causing the problem.”

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    Yes, they are “Bomb Trains.” Even more importantly, they are “Global Destruction Trains”

    Our Earth Day refocus on the larger issues

    By Roger Straw, Editor, The Benicia Independent, April 22, 2015
    tarsands_wis-sierra-club
    This Sierra Club before-and-after photo of tar sands strip mining appeared with my 6/14/13 opinion in the Benicia Herald, “Do Benicians want tar-sands oil brought here?” – Roger Straw

    My initial alarm over Valero’s proposal to build a crude-by-rail offloading facility here in my hometown came almost two years ago now, when I learned of the destruction in Alberta Canada caused by the mining and processing of tar sands.   It was plain to me that a decision to permit Valero Crude By Rail here, thousands of miles from those dirty bitumen mines, would position my hometown as a valued partner in the world’s most toxic oil extraction and transport operation.  I joined with others here in Benicia to organize so that we would have no part in that dirty game.

    Lac-Mégantic, Quebec
    Lac-Mégantic, Quebec

    For me and for many along the rails in the U.S., our focus shifted gradually – or in some cases suddenly – to public safety issues surrounding Bakken shale oil train derailments and the resultant catastrophic explosions and fireballs.

    Lately, I’m thinking that even though these safety concerns will not go away with the eventual passage of a few new laws and long-delayed safety regulations, we all might want to consider renewing and strengthening our original focus.

    What we decide here along the tracks and in refinery towns has EVERYTHING to do with the situation in Alberta and the Upper Midwest where tar sands bitumen and shale oil is being produced.  People there, the land there, the wildlife, the air and water … these are the first and lasting victims of our thirst for cheap oil.

    We hear so much about the oil boom’s contribution to “energy independence.”   Well, let’s focus on REAL energy independence: leave the oil in the ground, tax carbon, invest in clean energy.

    The Benicia Independent has always been concerned with climate change, the air we breathe and the water and land that sustains life.  But our focus, like that of much of the media, has been primarily on the oil train derailments that have understandably shocked and frightened the public since July, 2013.  As editor and publisher, I’m serving notice this Earth Day, that the Benicia Independent is taking on a renewed commitment to cover the ongoing environmental damage and the increased risks of pollution if we permit oil trains.

    You will begin to see more stories about proposed carbon taxes, polar ice, the destruction of land and lives in Alberta and the Upper Midwest and more.

    Note that I fully expect my work to be dominated from time to time by the NEXT BIG EXPLOSION, and the NEXT ONE….  As long as oil trains rumble through our neighborhoods, city centers, mountains and wetlands and into our refinery industrial centers, we WILL see derailments.  And no matter the new federal safety rules and the efforts of the rail and oil industries, NOTHING can prevent the massive weight of a moving chain of these monstrous tank cars from coming off the tracks occasionally, accordion jackknifing, flipping and puncturing, setting off horrific explosions, and endangering human life and our natural world.  It will happen, and I will cover the news.

    But for every day that you DON’T see a news report with fiery skies and black billowing smoke, please understand that the not-so-silent killer strip-mines and the fracking and horizontal drilling continue, too often unreported.  Far from most of us, but up close and real to the people who live there, our earth is groaning under the weight of our permitting decisions and our corporate desire for continued crude-oil profitability.

    Here in Benicia, we will say NO to crude by rail.  It’s a tangible way to have a small say in the welfare of our town, our state, our nation and our beautiful planet earth.

    Leave the oil in the ground.  Tax carbon.  Invest in clean energy.


    MORE ON TAR SANDS …

    Sightline Daily

    Understanding the North American Tar Sands
    Jan 14, 2015 Last year, Portland’s KBOO Community Radio profiled what is “the largest industrial project on Earth”: the North American tar sands. Typically, one hears of the “Canadian tar sands,” as if the issue is one that lives only north of the US national border and need not concern American citizens. But reporter Barbara Bernstein’s documentary, “Fighting Goliath,” revealed an alarming and very real threat…

    Oil Change International

    Tar Sands
    Tar sands are found underneath Canada’s great boreal forest and consist of heavy crude oil trapped in a mixture of sand and clay. To extract oil from tar sands, companies must destroy fragile forest ecosystems and then use a very energy-intensive upgrading and refining process to turn that sludge into transportation fuel….

    Natural Resources Defense Council

    Stop Dirty Fuels : Tar Sands
    In Canada, the oil industry is transforming one of the world’s last remaining intact ecosystems into America’s gas tank….

    Forest Ethics

    Canada’s tar sands is one of the largest industrial projects on the planet, and its environmental footprint is growing by the second. At a time when the world needs to transition to cleaner energy, the tar sands is the poster child of what we should not be doing. It’s time to put a healthy environment above corporate profit and the endless drive for more oil….

    [More Google links on tar sands …]

    Tar Sands Basics

    ostseis.anl.gov/guide/tarsands/
    Argonne National Laboratory
    Tar sands (also referred to as oil sands) are a combination of clay,
    sand, water, and bitumen, a heavy black viscous oil. Tar sands can
    be mined and processed to extract the oil-rich bitumen, which is
    then refined into oil.

    Oil sands – Wikipedia, the free encyclopedia

    en.wikipedia.org/wiki/Oil_sands
    Oil sand is either loose sand or partially consolidated sandstone
    containing a naturally occurring mixture of sand, clay, and water,
    saturated with a dense and extremely viscous form of petroleum
    technically referred to as bitumen  (or colloquially tar due to its
    similar appearance, odour, and colour).

    Stop Dirty Fuels: Tar Sands

    www.nrdc.org/…/dirtyfuels_tar.asp

    Extracting tar sands, and turning bitumen into crude oil, uses vast amounts of energy and water, and causes significant air and water pollution, and three times …

    What are the Tar Sands? | Rainforest Action Network

    www.ran.org/what-are-tarsands
    Rainforest Action Network
    The Keystone XL pipeline is a disastrous project of tar sands oil
    companies that will do serious damage to our country and
    climate.  If built, the spill prone …

    Canada’s oil sands: The steam from below | The Economist

    www.economist.com/…/21615488-new-technologies-are-…
    The Economist
    Sep 6, 2014 – ONE of the bleakest scenes of man-made
    destruction is the strip mining of oil sands in the forests of
    Alberta, Canada. The sand is permeated …

    Tar sands – Friends of the Earth

    www.foe.org/projects/climate-and-energy/tarsands

    Tar sands are found underneath Canada’s great boreal forest and consist of heavy crude oil trapped in a mixture of sand and clay. To extract oil from tar sands, …

    Canada’s tar sands: Muck and brass | The Economist

    www.economist.com/node/17959688‎ – The Economist

    But golf courses and suburban housing make the place liveable, and some locals have grown attached to Alberta’s tar sands and Fort McMurray, the town at the centre of them. “I’d like …

    Unconventional Crude – The New Yorker

    www.newyorker.com/magazine/…/unconventional-crud…‎ – The New Yorker

    The tar sands begin near the border of Saskatchewan, around the latitude of Edmonton, and extend, in three major deposits, north and west almost to British Columbia. All in all, they …

    How Much Will Tar Sands Oil Add to Global Warming?

    www.scientificamerican.com/…/tarsands-and-keyston…‎  – Scientific American

    The Opposite of Mining: Tar Sands Steam Extraction Lessens Footprint, but Environmental Costs Remain · Oil Sands Raise Levels of Cancer-Causing Compounds in Regional Waters.

    What are Oil Sands? – Canadian Association of Petroleum …

    www.capp.ca/…oil…/oilsa

    Canadian Association of Petroleum Producers

    Oil sands are a mixture of sand, water, clay and bitumen. They are found in several locations around the globe including Venezuela, USA, Russia and Canada.

    No Tar Sands | UK Tar Sands Network | What are tar sands?

    www.no-tarsands.org/what-are-the-tarsands/

    Canada’s tar sands are the biggest energy project in the world,
    currently producing 1.9 million barrels of oil a day. Largely located
    in Alberta, the tar sands …

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      Are We Past the Point of No Return on Climate Change?

      Repost from  EarthTalk.org

      Are We Past the Point of No Return on Climate Change?

      Greens give us five years to cut back emissions
      By Roddy Scheer and Doug Moss, 04/11/2015

      Dear EarthTalk: What is the best way to measure how close we are to the dreaded “point of no return” with climate change? In other words, when do we think we will have gone too far?  — David Johnston, via EarthTalk.org

      While we may not yet have reached the “point of no return” — when no amount of cutbacks on greenhouse gas emissions will save us from potentially catastrophic global warming — climate scientists warn we may be getting awfully close. Since the dawn of the Industrial Revolution a century ago, the average global temperature has risen some 1.6 degrees Fahrenheit. Most climatologists agree that, while the warming to date is already causing environmental problems, another 0.4 degree Fahrenheit rise in temperature, representing a global average atmospheric concentration of carbon dioxide (CO2) of 450 parts per million (ppm), could set in motion unprecedented changes in global climate and a significant increase in the severity of natural disasters—and as such could represent the dreaded point of no return.

      Polar bear
      If we don’t get our carbon emissions in check soon, it could be too late for the polar bear and many other species impacted by global warming. Credit: Gregory “Slobirdr” Smith, FlickrCC

      Currently the atmospheric concentration of CO2 (the leading greenhouse gas) is approximately 398.55 parts per million (ppm). According to the National Oceanic and Atmospheric Administration (NOAA), the federal scientific agency tasked with monitoring the health of our oceans and atmosphere, the current average annual rate of increase of 1.92 ppm means we could reach the point of no return by 2042.

      Environmental leaders point out that this doesn’t give us much time to turn the tide. Greenpeace, a leading environmental advocacy group, says we have until around 2020 to significantly cut back on greenhouse gas output around the world—to the tune of a five percent annual reduction in emissions overall—if we are to avoid so-called “runaway” climate change. “The world is fast approaching a ‘point of no return’ beyond which extremely dangerous climate change impacts can become unavoidable,” reports the group. “Within this time period, we will have to radically change our approach to energy production and consumption.”

      In a recent lecture at Georgetown University, World Bank president Jim Yong Kim reported that whether we are able to cut emissions enough to prevent catastrophe likely depends on the policies of the world’s largest economies and the widespread adoption of so-called carbon pricing systems (such as emissions trading plans and carbon taxes). International negotiators meeting in Paris next December are already working to hammer out an agreement mandating that governments adopt these types of systems to facilitate emissions reductions. “A price on carbon is the single most important thing we have to get out of a Paris agreement,” Kim stated. “It will unleash market forces.”

      While carbon pricing will be key to mitigating global warming, Greenpeace adds that stemming the tide of deforestation in the world’s tropical rainforests and beyond and adapting our food systems to changing climatic conditions and increasingly limited resources will also be crucial to the health of the planet.

      “Without additional mitigation, and even with adaptation, warming by the end of the 21st century will lead to high to very high risk of severe, widespread and irreversible impacts globally,” reports the Intergovernmental Panel on Climate Change (IPCC), an international group of leading climate experts convened by the United Nations to review and assess the most recent scientific, technical and socio-economic information on global warming. Indeed, there’s no time like the present to start changing our ways.

       

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