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Source: The East Hampton Press

Bishop Revives Bill Targeting Billions In Big Oil Tax Breaks

BY ROHMA ABBAS

Posted: April 16, 2013
Originally Published: April 16, 2013

A bill introduced last week by Democratic U.S. Representative Tim Bishop, which would eliminate a tax break for major oil companies, isn’t new, and isn’t likely to pass in a Republican-controlled House of Representatives—but that hasn’t stopped the Southampton congressman from trying again this year.

The bill, titled “Big Oil Welfare Repeal Act,” would eliminate a deduction for “major integrated oil companies” including BP, Chevron Corp, ConocoPhillips, ExxonMobil Corp and the Royal Dutch Shell Group, according to a statement by Mr. Bishop’s office. If the tax deduction is eliminated, the federal deficit could be reduced by $9.2 billion over 10 years—a proportionally tiny amount, but a potent symbolic gesture.

“I think it’s important we keep putting this in front of my colleagues in Congress,” said Mr. Bishop. “And I think it’s important we keep putting this in front of the American people. ... I think we have to ask the richest companies in the world to take less.”

The bill was first introduced in 2011, and “nothing” has happened with it since then, the congressman said. Still, Mr. Bishop re-filed the bill last week, acknowledging that it’s likely the legislation “will once again be ignored by the Republican leadership, because their priorities are elsewhere.” Those priorities include cutting Medicaid, food stamps and college assistance for needy students, he said.

The five companies the bill would target reported a total of $118 billion in profits in 2012, according to figures in Mr. Bishop’s statement. In 2011, those profits were $137 billion. The repeal of the taxpayer subsidy is included in President Barack Obama’s 2014 budget, and was also a measure suggested by the Bowles-Simpson Commission on Deficit Reduction.

The tax break, called the “Section 199” deduction, was created decades ago, when oil was about $17 a barrel, said Mr. Bishop. Lately, however, the price of a barrel of oil has hovered in the high $90 range, he said. The subsidy allows companies to deduct from their tax liability 6 percent of the income they collect each year from oil and gas extracted in the United States and its shores.

“These corporate gifts are a remnant of past policies, which tie us to dirty fossil fuels for our future,” said Adrienne Esposito, the executive director of Citizens Campaign for the Environment, in Mr. Bishop’s statement. “The time has come for America to invest in the clean, safe, renewable energy resources to provide a sustainable future, rather than providing handouts to dirty, dwindling and unsustainable fossil fuels.”


There might be a sliver of hope for the legislation this year, because there’s been much conversation about tax reform, Mr. Bishop said. “Maybe, who knows—maybe the climate is a little different,” he said.

The next step is to recruit cosponsors for the legislation, Mr. Bishop said. He hopes to get a hearing on the bill in the House Committee on Ways and Means.