Welfare for (Very Rich) Oil Companies

Of the many gifts that the 99 percent award to the 1 percent—the various tax breaks and tributes that have helped push inequality in America to record levels—none are quite as annoying as the subsidies awarded the fossil fuel industry.

Vermont Sen. Bernie Sanders introduced a bill this spring that would trim $20 billion a year from those payouts to coal and oil and gas companies. Barack Obama, modest almost to a fault, has identified $5 billion in handouts that he’d like taken away before this year’s budget is finalized. Whatever the number, the principle is crucial. Because if we can’t agree not to subsidize the fossil fuel industry, I’d submit we pretty much can’t agree about anything.

For environmentalists, few things could be more important. Worldwide, it’s estimated that global warming emissions could be cut in half if all governments stopped subsidizing fossil fuel—something that won’t happen unless the U.S. takes the lead.

But let’s say for the moment that you don’t care about climate change. Let’s say you agree with Republican Sen. James Inhofe of Oklahoma that global warming is impossible because it says in Genesis “that ‘as long as the earth remains there will be seed time and harvest, cold and heat, winter and summer, day and night.’ My point is, God’s still up there,” Inhofe said. “The arrogance of people to think that we, human beings, would be able to change what He is doing in the climate is to me outrageous.” (I can’t help myself: This is an exceedingly dumb theology. God allows war but prevents carbon emission from heating the atmosphere?) Even if you thought that way, you’d still want to keep the federal government from paying Exxon bonuses every year.

For one thing, there’s no group of industries that need the money less. Fossil fuel is the most profitable enterprise humans have ever engaged in, and by large margins. Exxon earned $41 billion last year, not quite as much as its $45 billion record in 2008, but still more money than any other company in the history of money ($1,300 a second, if you’re keeping score). The Koch brothers are the third and fourth richest men in America, thanks to their network of pipelines. Subsidizing people like this is like setting up a special welfare program only for lottery winners. It’s like arranging the NBA draft so that the team who wins the title also gets the first-round choice. It’s like reserving the parking spaces near the store for Olympic athletes.

And it’s even nuttier when you think about why we subsidize things in the first place. We pick things we’d like to be able to do, but aren’t good at yet. Say, solar power—if the government helps companies invest in the new technology, they will get better at producing panels, the price will come down, a new industry will be born, and we’ll all be better off. It’s the same reason we subsidize education—young people don’t know what they need to know, so we help them go to college (unless we’re Rick Santorum).

This doesn’t always work. Some kids go to college and do nothing but drink beer—the subsidy was wasted. Some solar companies—Solyndra, say—turn out not to be based on sound ideas, and so they fail. Neither case is pretty, but most people understand that you still want to subsidize both college and innovation.

But fossil fuel? We learned how to burn coal in the early 1700s, and oil and gas followed. We’re very good at these things now—too good, to judge by the fact that the planet’s temperature is rising fast. Subsidizing coal is like finding that beer-drinking college student and paying him to sit in a bar all day and night—it’s not just unnecessary, it’s ludicrous.

But it does make sense for one group of people—legislators. Having been given small presents (campaign donations) by fossil fuel companies, they in return bestow large presents on those corporations, using our tax dollars. Outside of Congress, huge majorities of Republicans, independents, and Democrats think it’s a bad idea; it’ll be interesting to see if that’s enough.

Bill McKibben is the Schumann Distinguished Scholar at Middlebury College in Vermont and founder of 350.org.

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