"Big Oil" is fittingly descriptive of the behemoth petroleum industry.
It is big, very big, in fueling the U.S. industrial and consumer machinery, very big in hundreds of billions of dollars in revenues and profits, and especially big in the muscle it uses in American politics and government to get its way.
Since the BP deepwater well in the Gulf of Mexico began gushing millions of barrels of crude, the full extent of Big Oil's privileged treatment has been spelled out in details that should horrify even the most jaded observers of political pandering.
At every turn, oil and gas producers are handed breaks not accorded to any other industries.
This is no accident. The oil industry, according to an industry-wide audit by the Center for Responsive Politics, has spent some $340 million on political lobbyists and lobbying in the past two years. Such investments have funded the likes of Rep. Joe Barton, R-Texas, who apologized to BP for President Obama's "shakedown" of $20 billion from BP to pay damages and losses to Gulf state residents. Barton has collected some $1.5 million from oil interests over time for re-election campaigns.
Benefits flowing from Big Oil's arm-twisting and backslapping add up to an industry more heavily subsidized than any other, with tax breaks at every turn. While other industries are taxed at an average rate of 25 percent, oil enjoys a rate of 9 percent, according to the Congressional Budget Office.
To enjoy fruits of these U.S. tax advantages, some oil firms have used far-off, remote entities to register their equipment or locate their "headquarters"—in places such as the Marshall Islands.
With the BP spill calamity still vivid, Congress must move this year to redress the legislative wrongs that have unfairly rewarded Big Oil.
The royalty rate must be upgraded. Tax havens must be severely limited or eliminated. Tax rates need adjusting. Subsidies should be abolished.
And, the Department of Interior must ride herd more diligently and forcefully on production standards to avoid another Gulf disaster. The Justice Department, too, has a role: prosecuting violations of safety and environmental laws.
Big Oil's agenda has been rubberstamped for too many years in Washington, D.C. Tens of billions of tax dollars that otherwise would have gone to the public treasury have been waived by Congress. Big Oil needs to be treated the same as other U.S. industries that also have ups and downs but lack the privileged treatment of Big Oil.
