2013 – 100 Year Anniversary for Oil Tax Subsidies

Did you know that the oldest, continuous tax subsidy for oil companies was enacted by Congress in 1913, making 2013 the 100th year of federal tax subsidies specific to the oil industry? Shouldn’t this event garner a party? The Iowa Renewable Fuels Association (IRFA) and the American Coalition for Ethanol (ACE) thought so and on March 14, 2013 held a “Century of Subsidies” birthday party for big oil in Washington, DC. On hand for the event were Rick Schwarck, president of the IRFA and CEO of Absolute Energy, Monte Shaw, executive director for IRFA and Brian Jennings, executive vice president of ACE.

Schwark noted that they are not saying all the tax subsidies are necessarily bad and should be discontinued, but rather, that oil has had 100 years of an unfair advantage over all other fuels, including ethanol, and when discussing policies such as the Renewable Fuel Standard (RFS), the debate should be a full, fair and factual discussion that looks at how to level the playing field.

Today, here are the current oil specific tax subsidies: Expensing of Intangible Drilling Costs; Percentage Depletion Allowance; Deduction for Tertiary Injectants; Geological and Geophysical Expenditures; Exception for passive loss limitations for oil and gas; Enhanced oil recovery credit; and Marginal oil well credit.

To counterbalance the “Century of Subsidies” and other policies that favor petroleum, ACE and IRFA called upon Congress to protect the federal Renewable Fuels Standard (RFS). The RFS cracks open the petroleum monopoly to give consumers non-petroleum choices at the pump. Consumers benefit from market access to lower cost renewable fuels like E15 and E85.

“If oil companies cannot stand on their own two feet after 100 years of clinging to certain taxpayer subsidies, Congress shouldn’t hurt American consumers by repealing the RFS, a policy that helps level the playing field with oil a little bit by giving people affordable and renewable fuel choices,” said ACE Executive Vice President Brian Jennings. “ACE members met with Congress during our fly-in this week to emphasize how the RFS costs taxpayers nothing and has succeeded in delivering benefits for all Americans.”

View the ACE Biofuels Beltway March 2013 Photo Album.

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