Laurence Tribe, constitutional law professor at Harvard Law School and of-counsel at the firm Massey & Gail LLP, recently testified in front of the U.S. House Committee on Energy and Commerce against the proposed...read more
How the Other Guys Play
How the Other Guys Play
Americans want deficits cut , and there is a new set of leaders in Congress who committed themselves last year to cutting wasteful government spending. And, while over 70 percent of Americans are unaware how much of their money is given in welfare checks to highly profitable dirty energy companies, when they find out, only 8 percent want it to stay that way.
After President Obama’s State of the Union address calling for a modest cut of just $4 billion in welfare for oil companies, the focus on this insanely wasteful spending has intensified. It’s the right proposal, but one that will encounter very stiff resistance for entrenched interests that still very much enjoy their century-long stay in the government incubator of tax breaks, subsidies, cheap access to public property, forgiveness for wrecking that property, and little meaningful oversight.
Ending their welfare queen status will take some very aggressive, strategic communicating – and a lot of message discipline. For a good example of that, you need only look to the dirty energy lobby.
Take the response to the Obama proposal by Big Oil’s top lobbying chieftain, Jack Gerard: “The federal government by no stretch of the imagination subsidizes the oil industry.”
Clean energy advocates should look past the fact that people who actually count government largess to dirty energy would laugh at this Alice-in-Wonderland assertion. The thing to appreciate also is the tenacious message discipline it involves. Notice that Mr. Gerard’s fantastical assertion was followed in a few days by the pronouncement of the U.S. Chamber of Commerce’s “Institute for 21st Century Energy” President Karen Harbert. Her point? “Subsidies and tax advantages for renewable energy and fuels may need to phase out eventually to level the playing field for energy sources and to curb spending [emphasis added],” according to Energy & Environment, an industry newsletter.
“Let’s give the renewable industry some predictability, and let them have a certain defined period where they know there is going to be some support there, but it can’t go on for an undefined period of time. We can ill afford that,” Harbert added.
It’s tempting to point to ask Ms. Harbert if “an undefined period of time” might be oh…. Say, 100 years? But that would distract from the point here that is made so much better by another dirty energy welfare defender, Jack Coleman of Energy North America LLC.,
Before joining his pro-dirty energy “consulting” firm, we paid Mr. Coleman’s salary during his public “service” as a General Counsel for the House Committee on Natural Resources, where he pushed to open up the Outer Continental Shelf to oil drilling, and to has us underwrite his current clients’ dirty energy boondoggles, tar sands and oil shale projects.
Mr. Coleman displayed the same dirty energy messaging discipline we can expect when they are faced with growing demand they get off the dole. He was a guest on earlier this week on the nationally syndicated Diane Rehm Show. His points:
- Oil industry welfare is “standard around the world” and “miniscule.” If we eliminate them, it will be sort of unfair “penalizing” of the oil and gas industry vis-à-vis other industries.
- The percentage depletion allowance for oil and gas is “not a special subsidy” for the oil and gas industry.
- Then, the whopper: Oil company profits “pale in comparison to the taxes they pay.” ExxonMobil just posted profits of $9.25 billion in the final quarter of 2010, and BP posted pre-tax profits of $8.56 billion.
- “Huge subsidies” go to renewables like solar and wind.
Attempting to bring Mr. Coleman back into reality were Amy Harder of National Journal magazine and Kate Gordon, Vice President for Energy Policy at the Center for American Progress. Gordon responded to the wildest of Coleman’s distortions. Her points are worth cleantech advocates remembering:
- Some oil and gas subsidies have been in place for 100 years, from a completely different time in American history. Oil companies now make $80 for every barrel they produce from the Gulf of Mexico. These industries are mature, extremely profitable industry and don’t need taxpayer help.
- The tax breaks for oil companies are not the same as for other industries. For instance, Gordon pointed out that oil and gas producers are allowed to take a larger deduction on each barrel drilled, meaning that the total deduction can exceed the amount of revenue the companies get from each barrel.
- The playing field is not level in the United States, but is tilted heavily – in a wide variety of ways – in favor of fossil fuels. Oil companies have business certainty in their welfare, while smart policies supporting renewables have to be renewed every few years.
- The largest oil companies made $1 trillion in profits in the last decade, they certainly didn’t pay $3 trillion in taxes. (Gordon was responding to Coleman’s assertion that Exxon Mobil made $11.68 billion in profits in one quarter, but paid $32.36 billion in taxes — 3 times the profits – that same quarter).
- The United States is one of the only major world economies without a clean energy standard, and those other countries are “eating our lunch” (including companies leaving the United States to go elsewhere). We have no national commitment to a transformation of our energy system.
- Coleman isn’t taking into account the environmental costs to high-carbon fuels or that climate change is a crisis, while other countries increasingly are. We have unlimited renewables – solar, wind, geothermal – without blowing the tops off of mountains or fracking or drilling under the Gulf of Mexico.
- There’s also a human cost to fossil fuel reliance, which is one reason why the U.S. military is a leader in switching to renewable energy.
Listening to people like Coleman, or Jack Gerard, for that matter, brings up a mix of feelings: A bit of pity for men who want to be like Sarah Palin – obviously wrong, never doubt, rarely embarrassed – but who can’t wink like her. There’s admiration for the professionalized gusto to get paid to say clearly wrong and manifestly stupid things. But there’s also outrage that these guys pollute the public dialogue with propaganda when unemployed Americans want to work in the clean economy are led by a Congress that coddles dirty energy lobbyists, rather than scaling a clean economy. China doesn’t suffer from these fools. It’s investing nearly $100 million a day in clean energy.
Cleantech advocates in this country need to invest a lot more time and effort into advocacy and pushing back on dirty energy propaganda that’s aimed squarely at their investments and life’s work. We should look at how the other team is playing. Their game is message discipline. We should try it to. For busy cleantech companies who have more urgent things than public advocacy, that can be an unwelcome message. But the choice of inaction really isn’t viable.
Look on the bright side. Unlike the dirty energy guys, we don’t have to lie to make our point.