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A screenshot of the tradeoff calculator shows the many social services that could be aided by ending subsidies for oil and gas companies. (Photo: bigoilgiveaways.com)

'Failure of Conscience': Groups Urge Congress to Fund Social Well-Being, Not Fossil Fuel Industry

Diverse coalition launches calculator to measure cost of fossil fuel subsidies

Nadia Prupis

A coalition of environmental and social justice groups has come together to declare collective disgust with the spending of billions of taxpayer dollars on unnecessary subsidies for the oil and gas industries when that same money could be used to improve the lives of millions if spent on social services, renewable energy investments, healthcare, and education.

The coalition includes Friends of the Earth, Public Citizen, People for the American Way, and Oxfam America, among others. As part of its effort, the coalition has launched a Fossil Fuel Subsidies Tradeoff Calculator, a tool which breaks down both the government's giveaways to the oil industry into smaller brackets, such as tax credits for manufacturers and fossil energy research programs, and the social programs that could benefit from those subsidies instead, like school lunches and veteran healthcare.

"Leaving the social safety net in tatters and keeping Big Oil on the dole is not just a failure to prioritize. It is a failure of conscience," said Lukas Ross, climate and energy campaigner at Friends of the Earth, one of the organizations in the coalition. "In the face of record inequality, crumbling infrastructure, and looming climate disruption, it is time for Congress to think hard about the government spending we need and the corporate welfare we don’t."

Among the programs set to receive funding through the so-called "Cromnibus" spending bill that passed the Senate in December is one that will give the oil and gas industry $571 million a year for research and development. Applying that same amount of money to a swath of different social assistance programs, Congress could fund maximum Pell grants for nearly 100,000 students or the median salaries of more than 18,000 national park rangers, the coalition found.

"It's an abomination that while Americans are working every day for a transition to a more sustainable, more equal and more democratic economy, members of Congress are willingly trading off our future for the short-term profits of fossil fuel executives," said Janet Redman, director of the climate policy program at the Institute for Policy Studies, another coalition member.

The tradeoff calculator also analyzes the expense of the "intangible drilling cost deduction," an accounting tactic often employed by big oil companies to write off much of the price of building new wells in the U.S., as much as $1.67 billion a year. As the Joint Committee on Taxation explains:

Under normal income tax rules, a company that pays expenses in order to make future profits would need to deduct the expenses over the same time period as profits.  The costs for drilling exploratory and developmental wells would need to be deducted as resources are extracted from the well.

The break for intangible drilling costs (IDCs) is an exception to the general rule. Independent producers can choose to immediately deduct all of their intangible drilling costs.

That $1.67 billion in write-offs could be applied instead to funding 768,202,765 school lunches a year, healthcare for 563,176 veterans, or food stamps for 13,117,721 people.

Altogether, the cost of government subsidies for the oil and gas industry totals $6.45 billion, according to the coalition. For that amount of funding, 5,469,579 children could receive free or low-cost health insurance up to age 19.

"Congress has stripped food assistance for kids and seniors, but they continue to give billions in handouts to the wealthiest and most polluting companies in the world," said Green for All executive director Jeremy Hays. "Our scarce public resources should protect the health and safety of our communities."

In addition to environmental groups, the coalition included voices from faith-based organizations. "Let's be blunt, the propping up of oil companies while denying climate change is pure corruption," said Ani Zonneveld, president of Muslims for Progressive Values.

Stephen Kretzmann, executive director of Oil Change International, also stated, "There are two words that perfectly describe the ongoing use of public funds to support the fossil fuel industry: climate denial."

"Ending fossil fuel subsidies should be the first step in fighting climate change," Kretzmann said.


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