Fossil Fuel Industry Pays Legislators to Protect their Subsidies

Image credit: The Price of Oil

The fossil fuel industry spends tens of millions of dollars each year to defend subsidies. This is part of their longstanding practice of buying influence so that they can shape political outcomes.

The Price of Oil quotes research that estimates the fossil fuel industry gets a 5,800 percent return on these investments in the form of fossil fuel subsidies. Estimates of the value of U.S. federal subsidies (excluding climate and health impacts) to the domestic oil and gas industry range from $4 billion a year, to $41 billion annually. One recent comprehensive study of U.S. energy subsidies identified $72.5 billion in federal subsidies for fossil fuels between 2002-2008, or just over $10 billion annually. Taxpayers provide $7bn a year for fossil fuel subsidies on public lands.


There have been many calls to phase-out fossil fuel subsidies. A decade ago President Obama began his relentless – but ultimately doomed – efforts to eliminate oil and gas subsidies. Although Republicans are the largest recipients of oil industry campaign contributions their are a handful of Democrats who welcome donations and block efforts to repeal subsidies.

In 2011 three dozen members of Congress sent a letter to the Super Committee urging an end to fossil fuel subsidies. The committee ignored the request although this would have saved as much as $122 billion over a decade. It failed because of the influence of fossil fuel industry money on the Super Committee. Eight Super Committee members received over $300,000 in contributions from the fossil fuel industry since 1999: Senators Baucus (D-MT), Kyl (R-AZ), Portman (R-OH), and Toomey (R-PA), and Representatives Camp (R-MI), Clyburn (D-SC), Hensarling (R-TX), and Upton (R-MI).

There have been a number of bills to end subsidies but they have all been killed by members of the GOP. A 2011 bill to end fossil fuel subsidies was killed by the Senate Republicans (45 Republicans and three Democrats voted to keep oil subsidies). Senators who opposed eliminating the oil subsidies received an average of 5 times as much cash as those who voted to eliminate the subsidies.

“The industry finances corrupt politicians, who in turn help them keep fossil fuels economically viable at a time when the science suggests most oil, gas and coal needs to be kept in the ground,” Jason Kowalski, policy director at 350.org said in a Center for Biological Diversity press release. “They set out to rig the system and they succeeded. History will judge them harshly.”

Opponents to ending subsidies put forward an old and deeply flawed economic mythology. They contend this would hurt industry, eliminate thousands of jobs, and reduce tax revenue. However, close scrutiny does not bear out their concerns. Natural resource extraction jobs are less than 1 percent of state jobs and the industry gets more in state subsidies than it pays in taxes. The health benefits alone far outweigh the costs.

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