Subsidizing Our Own Exploitation

With oil selling for more than $70 a barrel and the oil companies raking in record profits, you’d think that we wouldn’t have to subsidize them to encourage production. Even President Bush is on the record saying “I will tell you with $55 oil we don’t need incentives to oil and gas companies to explore.” Yet in last year’s disastrous Energy Bill and other legislation, the royalty fees for oil and gas taken from federal lands and waters have been cut, costing the taxpayers billions of dollars in lost revenue every year. (Taxpayers interested in comparing how they're being gouged to other parts of the country can do so here. Since when was California a red state?)

Today Senator Ron Wyden (D-Ore.) took to the floor of the Senate for over five hours in an (ultimately vain) filibuster to win an up-or-down vote on his “Wyden amendment,” which would discontinue the subsidy whenever the price of oil topped $55 a barrel. The Senate leadership is doing its best to change the subject. So instead of allowing a vote on oil-company subsidies, they’re attempting to bribe the American people by offering $100 tax rebates—but only if they get to drill the Arctic National Wildlife Refuge. Rather than boost conservation and energy alternatives, they’re trying to convince us that our troubles would all be gone if we had just allowed Arctic drilling ten years ago. (The convincing went a bit awry Tuesday.)

Gas prices are not, strictly speaking, an environmental issue: With cars that got 100 miles a gallon, writes Carl Pope, we wouldn’t flinch at $5 a gallon gas. But with our roads jammed instead with SUVs and monster trucks, consumer anger is going to come out somewhere, and the oil companies are doing their best to see that it’s not directed at them.