Why are Americans Subsidizing Our Own Extinction?
Why are Americans Subsidizing Our Own Extinction?
To stop our climate-change-driven suicide, Congress must stop allowing oil exports, end subsidies to the fossil fuel industry, and promote clean American energy
Each American — man, woman and child — paid around $2000 last year to subsidize the fossil fuel industry, according to an analysis this year by the International Monetary Fund (IMF).
Worldwide, the fossil fuel industry’s lobbying power has gotten it about $6 trillion a year in subsidies; America’s $600 billion a year gift to the energy barons pours cash into this massively profitable industry at the rate of a million dollars a minute.
We’re funding our own suicide: the world’s largest fossil fuel companies right now have drilling and mining operations underway that, if completed, will push the world well past a catastrophic 2.7 degrees Celsius, the level that some scientists estimate could lead to a dinosaur-level extinction.
And while the fossil fuel companies all give lip service to becoming “carbon neutral” they’re entirely talking about their own operations, not the fossil fuel products their operations are producing.
So BP is going to super-insulate their buildings: that’ll do nothing about the carbon bomb they and their colleagues in the industry are planning to throw into our atmosphere over the next 30 years.
It doesn’t have to be this way, and the US could lead the world in getting off our fossil fuel addiction if only our politicians could stop taking money from the fossil fuel industry and instead do the right thing.
As President Trump loved to proclaim, the USA is now “energy independent,” meaning we produce more energy — including oil — than we use. You’d think that would mean we’d redirect our efforts from fossil fuels into greening America, but you’d think wrong.
It costs, in 2022 dollars, an average of $23 a barrel to produce oil in the US from existing wells and $48 a barrel from new wells (which includes all the costs of ramping up to production).
So why isn’t oil in the US selling for, say, $50 or $60 a barrel, where oil companies could make a sweet profit and gas prices would float around $2.50 a gallon?
It goes back to a massive and expensive lobbying effort by Big Oil in 2015: a handful of fossil-fuel-owned Democrats joined the entire bought-off GOP in pushing legislation through Congress that reversed President Ford’s 1975 ban on exporting American oil. President Obama, over the loud objections of most Democrats, signed the legislation on December 18th of that year.
Wherever you find politicians willing to sell out to big money, you find politicians dancing to the tune of Big Oil. Former North Dakota Democratic Senator Heidi Heitkamp, for example, said when she voted to end the export ban:
“The facts are clear: lifting the ban is good for consumers, our economy, national security and energy security.”
The former Senator is now a lobbyist, most recently working to block tax increases on morbidly rich people and corporations by spreading money and favors around Congress to kill President Biden’s Build Back Better legislation. As The New York Times noted last September:
“Congressional Democrats always knew their battle plan for raising taxes on corporations, large inheritances and the superwealthy would not survive initial contact with the enemy. They just didn’t realize that enemy would be North Dakota-nice Heidi Heitkamp.”
Now that America produces more oil that we use (and our consumption will begin a real nose-dive over the next few years as more electric vehicles come online), America has gone stupid.
Chalk it up to five corrupt Republican justices on the Supreme Court legalizing political bribery with their 2010 Citizens United decision: the lobbying and dark money businesses have since exploded, particularly for the insurance, pharma and oil industries.
Which is why instead of keeping that oil in the US to hold down prices for working people still driving gas-powered cars and trucks, we’re letting the big oil giants export cheap American oil into world markets, jacking up our gas prices here and their profits worldwide.
Meanwhile, Europe — which is nowhere near energy independent, but doesn’t allow industry to legally buy off politicians — has just committed to putting solar panels on the rooftops of every public building in every country across the entire European Union by 2025.
The EU took this extraordinary action this week, so they could end their need to import oil and gas from Russia.
Here in America, though, every fossil fuel company in the country — from Joe Manchin’s little operation in West Virginia to the largest oil giants — is committed to extracting as much of these environmental poisons from the ground as they can.
They put out nice press releases about their commitment to reducing America’s use of fossil fuels, but they’re no more meaningful than the neighborhood heroin dealer’s proclamation that he’s just trying to help his customers overcome their addictions.
Each will tell you that their operations won’t be enough to produce catastrophic climate change. But add them up and we’re in deep trouble, and as an industry they’re still promoting climate disinformation while buying as many politicians as they can, worldwide.
Way back in 2009, the G20 — including America — signed an agreement to phase out that $6 trillion a year in worldwide government subsidies to the fossil fuel industry. While many countries have taken small bites out of their subsidies, here in the US they’ve actually grown.
If America wants to stop funding its own suicide, at a minimum Congress must reverse that lobbyist-purchased 2015 law allowing US oil exports and set a two- or three-year goal for ending all subsidies of the fossil fuel industry and redirect some or all of those subsidies to clean power projects and energy conservation.
Anything less is sheer lunacy.
Our Question of the Day today (to get there and comment, just click on the headline below) is:
If Elon Musk Lets Trump Back on Twitter, How Will It Effect America?
He's so well trained at media -- and the platform does matter! So when he gets a megaphone on twitter it'll be big and news. However, he's no longer president but, instead, the leader of a cult and a group within the GOP. The big question is whether he'll do more harm than good to the GOP, and whether they'll follow him as he tries to re-take the government, like Hitler did with radio and print media when he made his comeback in 1932/33. Elon Musk pledges to overturn Twitter’s ban on Donald Trump
I get all the stats and the insanity part of this Report, but you said the reason why to end fossil fuel subsidies at the beginning---it's the right thing to do.
That's the message we must send to the youth fighting for their future. We owe it to them to show our solidarity and sincere concern for what we have done. It's "adulting", it's being a good example, and it's putting our money where our mouth is. If we want a legacy in the form of a livable planet, we should try to save the world alongside these kids and the scientists.
No more blah blah blah. We have to do this work, because Greta can't be everywhere.
The fact is clear that Thom doesn't know oil that well. He gets a lot right, but a lot more wrong.
I spent 35 years in oil, mostly consulting outside the USA. I've consulted witt pretty much every major oil company. There is not one oil company on earth that I know of that thinks they can force people to buy oil by increasing the supply. Not one.
I'm frankly surprised that Thom thinks supply side economics works. Supply side economics is also known as "trickle down" or "reaganomics" or the term most actual economists use "Total Bullshirt".
Markets are demand driven. Oil companies supply oil, and NEVER drill until there is a large enough gap between supply and demand to drive up price.
If you want people to quit burning fossil fuels, which is MY goal, increasing the price of oil will do it, but Americans will scream about how they are being "ripped off". OK, so we decrease the price of oil, as 85% of Americans want, and the Democrats. There is only one possible way for the oil industry to decrease the price, increase supply. The oil industry can't do ANYTHING to make customers demand less oil.
So, how do we solve this?
Reaching back into my MBA training, the answer is obvious. In the MBA we learn a valuable - but totally obvious fact - incentives drive actions. So, CHANGE THE INCENTIVES.
Removing the corporate welfare going to oil won't do anything but increase cost. We need to reduce demand.
Here is one solution,
1. Implement a federal tax credit to allow the deduction of the ENTIRE COST of solar cells from taxes, and allow home owners to carry anything unused forward. That way installation is free.
2, Implement a federal tax credit to reimburse power companies for purchasing power from rooftop solar for the first 7 years. Since the solar is free to the owner, the power company doesn't need to lose money on this, our goal is to make fossil fuel power plants unprofitable so they get shut down.
3. Implement a federal tax credit on the purchase of electric cars, make it 100% of the price of the cheapest electric car.
5. Fully support the offer made by US oil companies a year ago to produce clean renewable fuels and substitute them for gasoline and diesel. They can do it right now, and the only reason they aren't [doing it] is because they need a federal law to standardize on the clean renewable fuel so they all sell fuel that any vehicle can use.
In very few years, nobody will be burning fossil oil.
I'll tell you what CANNOT work. If we tax the crap out of oil companies, the price of gasoline will go UP and all of us consumers will be sending more of our income to the federal government. That is silly. If we stop exporting US oil, pretty much nothing will change, a tiny few contracts will be rearranged to buy elsewhere, but again, oil is a demand driven market, supply side economics are bullshirt, and reducing supply won't reduce demand unless it increases price, and even then most demand is inelastic so it will just make everyone poorer without reducing oil demand. If we get the KSA to increase oil extraction, first we will find out THEY CAN'T, but also it will just rearrange supply because - ONE LAST TIME - oil is a demand driven market, supply side economics DO NOT WORK, and reducing supply won't reduce demand unless it increases price, and even then most demand is inelastic so it will just make everyone poorer without reducing oil demand.
Again, if you want people to do something, incentivize it. Only 2% of us and really only 2% with plenty of income, can increase our transportation cost without having to slash elsewhere.
You have to offer a CHEAPER alternative, and you can't tell an illiterate family of laborers to just run out and buy a Tesla.