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May 24, 2011 5:45 PMPublication: The East Hampton Press

Bishop: Oil Bill Is Common Sense But Has Little Hope

May 24, 2011 6:28 PM

As the federal government struggles to close the gaps between spending and revenue, U.S. Representative Tim Bishop introduced two bills this month that would add billions to the federal coffers without raising taxes on citizens a dime.

At least, they would if they ever stood a chance of passing.

The bills Mr. Bishop introduced would have eliminated certain tax subsidies for the nation’s five biggest oil companies—ExxonMobile, BP America, Conoco Phillips, Chevron and Royal Dutch Shell—putting some $3.5 billion back onto the tax rolls. The five companies, known as the “Big Five,” posted profits totalling $77 billion in 2010.

“It is ludicrous to tell Americans who are having a hard time paying their mortgages, sending their kids to school and buying groceries that five companies that make $77 billion a year cannot have their tax credits reduced by, what is it, 4 percent?” Mr. Bishop said recently. “And to have that called un-American, it’s insulting.”

Mr. Bishop referred to testimony given to Congress by the heads of the Big Five on May 12 at which the CEO of Conoco Phillips, James Mulva, called Mr. Bishop’s bill and a similar one introduced in the Senate “un-American.”

At the hearings the heads of the five companies also said that reducing tax subsidies would lead to job losses, reduced oil 
exploration and climbing gas prices.

In 2005, President George W. Bush said that if the price of oil reached $50 a barrel, the subsidies, some of which have been in place since the 1920s, would not be necessary. A former president of Shell Oil differed with the then-president, saying it would take $70-per-barrel oil prices to make the subsidies unnecessary.

The price of oil this week ranged from between $96 per barrel and $105 per barrel.

“These subsidies were intended to incentivize activity in the oil business,” Mr. Bishop said. “But I don’t think you need to incentivize a business that is making over $70 billion a year in profits anymore.”

In addition to ending the subsidies, one of Mr. Bishop’s two bills also proposes that the Big Five—some of whom in recent years have posted the largest annual profits in history—pay royalties for oil drilled from publicly owned land. That caveat would put another $2.5 billion in revenues toward the budget gap.

The bill would also empower the president to release up to 5 percent of the nation’s Strategic Oil Reserve if there was evidence of market manipulation and speculative pricing driving up the cost of gasoline for American citizens. In the past, such releases of portions of the SOR have driven down the cost of gasoline at the pumps dramatically.

But none of it appears to matter, because the bills look to be lost in the political scrum of Washington, D.C. Neither has even been brought up for discussion in the congressional committee to which they were introduced—the agendas for which are currently controlled by Republican chairmen who have shown little interest in ending the subsidies or in the pleas by Mr. Bishop, who is a Democrat.

“The GOP has made a pledge of no new taxes and even closing loopholes, and reducing subsidies would constitute new taxes, I guess, and violate their pledge,” he said. “But if things have gotten so bad in this country that we have to tell kids ready for college, ‘Sorry, but we can’t afford it’—and we have to tell seniors and the disabled who need medicine, ‘Sorry, but we just can’t afford it’—when are we going to go to the oil companies making billions a year and tell them they can’t keep their subsidies?”

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Of course it will not pass, it makes too much sense.
By tenn tom (259), remsenburg on May 25, 11 7:23 AM
When we cannot pass legislation that cuts subsidies to the richest companies in the world, but cut programs that help the neediest among us, our country is on the wrong path.

The teabaggers/republicans will not be happy until they have turned this democracy into a full-fledged corporatocracy. Thankfully, they have over played their hand and America is waking up to who they really are. Hochul's victory last night in NY 26 is a harbinger of bad news for those on the right. Just like ...more
By razza5351 (551), East Hampton on May 25, 11 8:05 AM
2 members liked this comment
With all of the unrest in North Africa and the Middle East, and in Libya in particular, commodity traders and speculators are driving up the per barrel cost of oil by betting that the situation in those regions will get better later rather than sooner. Some are calling for the President to release the United States Oil reserves to counter speculator induced price hikes to discourage them from their activity. The most recent call for such action comes from a member of President Obama’s own ...more
By kaluss (113), Southampton on May 25, 11 8:16 AM
1 member liked this comment
Jim Kramer has a great idea, get rid of the subsidies to Big Oil and increase the margin requirements for the commidities traders and speculators to 50 %. Jim Kramer should be the head of the SEC ! A man with integrity and not beholding to any corporation !
By oil heat best (5), east quogue on May 25, 11 10:57 AM
Don't give up, Mr. Bishop. A majority of Americans are on your side!
By progressnow (556), sag harbor on May 25, 11 12:36 PM
I would like to know where Tim Bishop and his supporters who are upset about the US Oil Subsidies...as they should be....but I would like to know how they feel about the Billions of dollars that have been pledged to subsidize Brazilian Energy/Oil companies and Venezuelan Energy companies. This administration has just completed the financing. Does it strike anyone as odd that we would (and again, rightly so) call for an end to subsidizing multi billion dollar us big oil while agreeing to become ...more
By kaluss (113), Southampton on May 25, 11 12:39 PM
No more oil subsidies for anyone. We must move on from carbon-based fuels and start subsidizing alternative energy. But you do bring up a good question, from whom would you prefer to receive your oil, South America or the middle east?
By progressnow (556), sag harbor on May 25, 11 1:02 PM
Why doesn't Bishop go after the tax loopholes that allow GE to pay no income tax? All the oil companies pay income tax. Bull crap legislation.

By kpjc (161), east quogue on May 25, 11 9:43 PM
Maybe Bishop can figure out how to use plastic bags as energy
By kpjc (161), east quogue on May 25, 11 9:44 PM
Leave it to bishop to give us a flair for the dramatic! I do agree that the subsidies should end but let's not find something else to spend it on. 2.5 billion is a very small drop in the bucket but every bit helps
By razza5350 (1911), East Hampton on May 25, 11 9:53 PM
philathome is correct and it is much appreciated because that information is everywhere and sounded very plausible. thank you. have read the full answer and there are no taxpayer dollars being used but there was a committment made my the US to subsidize..while it doesn't appear to have taken place. in fact, the committment was made by appointees of the previous admin.
By kaluss (113), Southampton on May 26, 11 7:26 AM
Bishop only goes after big bad oil, who gives him no campain $. You are all fools, its all about the money. GE gets billions in tax breaks, Humm why ?
May 26, 11 11:38 AM appended by HBLAX22
Tax them all !!!
By HBLAX22 (1), West Baylon on May 26, 11 11:38 AM
i don't know about being fools, but it is not at all true to state that big oil doesn't give bishop any money for his campaign. in fact, oil and gas concerns are the 31st. largest contributor to bishop in his top 60 industries. he will never got a lot of their $ because his voting record is not in line with their goals. as far as ge goes, besides goldman sachs, you would be hard pressed to find a more sinister firm.
By kaluss (113), Southampton on May 26, 11 11:52 AM