Sticking it to the Man: Make Exxon pay for renewable energy!
Filed under: Reduce, Reuse, Recycle, Simplification, Tax
When you start looking at economics, there's a tendency to become bound up in the endless series of twists and connections. Every little thing in the economy seems to be linked to every other little thing, which means that any change or attempt at improvement is almost guaranteed to have endless, almost unimaginably horrific repercussions. Sometimes, it seems like the only safe move is to do absolutely nothing.
That having been said, there is something in me that wants to applaud bold, brave actions. I want to see the government come up with brilliant, revolutionary solutions to economic problems. I want to see them fight the bad guys and help out the good guys. Part of me just wants to scream "Damn the torpedoes, full speed ahead, and let's stick it to the Man!"
Okay, I'm going to calm down. However, I have to admit that, when I read about Congress' latest move, I wanted to jump up and applaud. You see, yesterday, the House of Representatives passed a bill that would give more than $17 billion in tax credits to companies that produce solar, wind, and other renewable forms of energy. Democratic leaders in the House immediately praised this as a step on the road to a cleaner environment and energy independence.
Of course, the first question is how those damn liberals intended to pay for this wonderful plan. After all, the Democratic congress has resolved to "pay as you go," which means that any new expenditures have to be balanced by comparable cuts.
So here's the sweet part: repulsed by the record-breaking profits that oil companies reported last year and the ever-increasing price of gas, the bill's framers propose to pay for these renewable energy credits by canceling the current tax breaks for oil companies. So there you have it: the House of Representatives is planning to fund alternative fuel programs by increasing taxes on oil companies.
Of course, gas companies and their legislative cronies are up in arms, claiming that this will reduce domestic oil production and raising the specter of the evil Hugo Chavez, arguing that cutting tax incentives to America's oil companies is a blow against freedom. Predictably, President Bush has already stated that he will veto this bill if it comes across his desk.
I really hope that this bill will make it through the Senate, leaving President Bush with the uncomfortable choice of abandoning the oil industry that has supported him for so long or openly fighting against renewable fuels. However, even if it doesn't get that far, I'm kind of excited to see an attempt at a bold solution to a major problem. Regardless of how this pans out, it's nice that increased federal support of alternative energy is a topic that's officially on the table.
Bruce Watson is a freelance writer, blogger, and all-around cheapskate. He got rid of his car last fall, but still hates the gas companies.
Recent Posts
- Where the jobs will be: Obama's green energy economy and you (12/01/2008)
- New York busts shady tax preparers (12/01/2008)
- Why I'm holding on to my CostCo card (12/01/2008)
- Hold your noses: Economy slashes plastic surgeons' business (12/01/2008)
- Tax Tips: Potential break for retirees (12/01/2008)
Reader Comments (Page 1 of 1)
2-28-2008 @ 3:18PM
Jared said...
The way I look at it is $100 for a barrel of oil is enough of an incentive to search out oil for these companies, we don't need the government giving them more encouragement.
Reply
2-28-2008 @ 3:22PM
Bruce Watson said...
Thanks, Jared--it's nice to know that I'm not the only one who thinks the oil companies' complaints are a little ridiculous!
2-28-2008 @ 4:09PM
Brian said...
This can only be bad for all of us. How does taxing oil companies have anything to do with renewable energy. You're not going to see a wind powered car, or a solar powered car around town. E85 ethanol is really the only serious alternative to fossil fuels for cars being considered now. All this is going to mean is more costs for everyone. Tax the power companies if you want, but taxing oil is only going to lead to more domestic companies moving overseas to dubai....where they don't have to pay taxes, and shipping it here. so money out the window to another company. So many people fail to realize the trickle-down affect of gasoline. This doesn't mean that oil companies will lose profits, it means they'll increase prices, so its all of us that pay for it in the end. On top of that, the oil and petroleum produced factors into everything. Goods cost more because the price of diesel goes up for the trucks. Everything plastic or rubber goes up too, because plastic and oil are primarily made of rubber. I'm all for cleaning up the planet, but use the taxes you have, or tax me, the taxpayer, because i'd rather pay for it direct then just feeding that much more to the oil companies. So while you're standing up applauding this move, throw an extra $2000 a year at congress cause thats what you're going to end up paying.
Reply
2-28-2008 @ 6:59PM
Bruce Watson said...
Brian-
First off, electric cars are already a reality; with greater resources and incentives, it seems likely that they could have a demonstrable impact on America's energy problems. Ditto ethanol production, which is currently too expensive to make a major impact, but could certainly benefit from some significant investment.
You have a very good point about the trickle-down effect of petroleum costs. On the other hand, I think that gas companies are approaching a tipping point, at which the cost of gas will become so extreme that it will inspire a major societal response. I don't know if this will be a move toward more public transportation or what, but we simply are reaching a level of cost that is making traditional automobile usage unsustainable.
Bottom line, Brian, the crisis is already here and it isn't going to fix itself. The gas companies seem disinclined to create a solution on their own. If our gas problem is going to get resolved, it will require significant investment in domestic energy production, preferably based in renewable resources. This bill would be a good first step in that direction.
2-28-2008 @ 10:41PM
Brian said...
Bruce,
I understand what you're trying to get at. There is a distinct need for renewable energy. And I know how hard it is for small companies, and renewable energy companies to compete with the large companies.
Electric cars are a possibility, but not feasible for mass production at the moment. The fact of the matter is that we are a petroleum world. As it stands now, we need it.
The hardest part about all of this is that renewables aren't anywhere close to as efficient and affordable as fossil fuels. When it comes to US energy production, coal is going to reign for many years to come. Nuclear is the first step, but it still has its limitations, and public fear is a big issue with that.
In my studies in college, I've done extensive research on the reasons why we aren't "green" yet. I agree that it is dependant a lot on opposition from the big companies. But the problem is the money is going in the wrong direction.
It's the big companies that are going to have to pave the way for renewable energy. As backwards as it sounds, we need to provide specific funding to those very companies that break world records for profits. You can't have the most powerful energy resources fighting you on this.
I agree with you on many things, on the fact that something has to be done for the betterment of humanity and the environment and the American economy. I just disagree with the thought that this bill is a positive step in that direction.
Reply
2-28-2008 @ 11:29PM
Bruce Watson said...
Brian-
You have some very good points. However, if we must direct funds to the very companies that are currently making such insane profits, why not explicitly tie those funds to the pursuit of renewable energy sources? My point is, the bill, as currently written, does not say that the $17 billion in credits for pursuing renewable energy cannot go to domestic oil companies. It simply says that it will no longer extend tax breaks for the pursuit of oil.
You are absolutely right about the feasibility of renewable energy. For that matter, it is currently very inefficient. However, the same can be said of nearly every energy source that has ever been introduced. How efficient was coal power initially? What about gas? Both were disastrous when they were first introduced, as was every other form of fuel, going all the way back to sod fires and burning dung.
The fact of the matter is that necessity is what will drive the inventions that will make renewable power feasible and efficient. That necessity may arrive in roughly 45 years, when most experts say that we will be completely out of gas; it may arrive in a couple of years, when gas gets so expensive that nobody can afford to own a car; or it may arrive when we directly tie it to the profits of companies that have become addicted to gargantuan revenues.
If we let Exxon decide on the timeline, I have a feeling that we'll be waiting for a long, long time. If, on the other hand, we light a fire under their asses, I think it's very likely that they'll surprise us with their amazing ingenuity and ability to quickly make renewable energy profitable.