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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.”

    US House approves $279 million renewable energy cut; raises funding for fossil fuel research by $34 million

    Press Release from Friends of the Earth
    [Editor:  As you might expect, this travesty was passed on a nearly complete party line vote, with 230 Republicans and 10 Dems in favor.  Dems voting FOR the bill included:  A. Dutch Ruppersberger MD, Ami Bera CA, Brad Ashford NE, Collin Peterson MN, Doris Matsui CA, Filemon Vela TX, Gene Green TX, Henry Cuellar TX, Jim Costa CA, and William Keating MA.  Republicans voting AGAINST the bill included: Christopher Gibson NY, James Sensenbrenner Jr. WI, Joseph Heck NV, Justin Amash MI, Mo Brooks AL, Thomas Massie KY, Walter Jones Jr. NC.   Track the bill here.  – RS]

    House approves $279 million renewable energy cut

    By: Kate Colwell, May. 1, 2015

    WASHINGTON, D.C. — The House of Representatives passed H.R. 2028, “The Energy and Water Development and Related Agencies Appropriations Act of 2016,” by a vote of 240-177.

    The bill sets funding levels for important programs within the U.S. Departments of Energy, Interior, and the Army Corps of Engineers. While staying within the limits set by the sequester, the bill manages to raise funding for fossil fuel research by $34 million from 2015 levels while cutting renewable energy and efficiency research by $279 million. Simultaneously, it is packed with policy riders that undermine bedrock environmental laws like the Clean Water Act and limit the Environmental Protection Agency’s ability to study the dangers of hydraulic fracturing.

    Friends of the Earth Climate and Energy Campaigner Lukas Ross issued the following statement in response:

    Shoveling more of our tax dollars into the pockets of ExxonMobil and the Koch Brothers while defunding clean energy is climate denial at its worst. Fossil fuel interests don’t need more money. Solutions to the climate crisis do.

    From hobbling the Clean Water Act to limiting the Environmental Protection Agency’s ability to even study fracking, House Speaker John Boehner is continuing his assault on the air we breathe and the water we drink.

    ###

    Expert contact: Lukas Ross, (202) 222-0724, lross@foe.org
    Communications contact: Kate Colwell, (202) 222-0744, kcolwell@foe.org

      Federal Fracking Ban Re-introduced: Protect Our Public Lands Act, H.R. 1902

      Press release, Rep. Jan Schakowsky (D-IL)
      [Editor: Food & Water Watch supports the bill with a petition here.  “We know that this is just a first step — that in this political climate it seems like it’s nearly impossible to move things forward — but together we can build momentum to protect the lands that are such an important part of our country.”  – RS]

      On Earth Day Pocan and Schakowsky Introduce Strongest Federal Fracking Ban in the U.S.

      WASHINGTON, DC — On Earth Day, U.S. Reps. Mark Pocan (D-WI) and Jan Schakowsky (D-IL), members of the Safe Climate Caucus, introduced the Protect Our Public Lands Act, H.R. 1902. The legislation is the strongest anti-fracking bill introduced in Congress to date and would ban fracking on public lands.

      “Our national parks, forests and public lands are some of our most treasured places and need to be protected for future generations,” said Rep. Mark Pocan. “It is clear fracking has a detrimental impact on the environment and there are serious safety concerns associated with these type of wells. Until we fully understand the effects, the only way to avoid these risks is to halt fracking entirely. We should not allow short-term economic gain to harm our public lands, damage our communities or endanger workers.”

      “Today is Earth Day – a time to renew our commitment to protecting the air we breathe, the water we drink, and the planet we all call home,” said Rep. Jan Schakowsky. ‘Our public lands have been preserved and protected by the federal government for over one hundred years.  We owe it to future generations to maintain their natural beauty and rich biodiversity.  I believe the only way to do that is to enact the Protect Our Public Lands Act, and I will continue to fight to see that happen.”

      “Our public lands are a shared national heritage, and shouldn’t be polluted, destroyed, and fracked to enrich the oil and gas industry,” said Wenonah Hauter, Executive Director of Food & Water Watch. “Ironically, the President is speaking in the Everglades today, a unique and fragile ecosystem that is threatened by nearby fracking on public land. Congress must follow Congressman Pocan and Congresswoman Schakowsky’s bold leadership and ban fracking on these lands, so that future generations can enjoy these special places.”

      Mounting evidence shows that fracking threatens our air, water and public health. To make matters worse, reports have shown that existing fracking wells on public lands aren’t being adequately inspected, creating even more potential for disastrous accidents. Right now, about 90 percent of federally managed lands are available for oil and gas leasing, while only 10 percent are reserved for conservation, recreation, wildlife and cultural heritage.

      The Protect our Public Lands Act, H.R. 1902 prohibits fracking, the use of fracking fluid, and acidization for the extraction of oil and gas on public lands for any lease issued, renewed, or readjusted. The legislation is endorsed by the Food and Water Watch, the American Sustainable Business Council, Environment America, Friends of the Earth, Center for Biological Diversity, Progressive Democrats of America.