Mr. President, I rise in support of legislation I am proud to cosponsor--to finally end the taxpayer handouts to the world's largest oil companies--as they rake in record profits. This measure is about accountability. It is about responsibility. It is about fairness.
When I got off the tractor from planting last weekend and went to fill my tank, it was $3.69 in Big Sandy, MT--almost a dollar higher than just a few months ago. But while I am paying close to $4 gallon at the pump, like other working Americans, oil company executives are padding their stock options and bonuses. They are diminishing their investment here in America, choosing instead to use tax loopholes to offshore their production.
I would like to make just three quick points today about the over $4 billion in tax earmarks that the biggest oil companies in America are receiving today.
First, they never asked for them.
Second, they don't need them.
And finally, they are not good for America--or our economy.
These taxpayer handouts are running up our national debt, taking our jobs overseas, and they expose us to higher gas prices.
In 2005, the CEOs of the five largest oil companies testified in the Senate about these subsidies. When asked directly about these oil and gas tax breaks, all five executives said they did not ask for them.
They agreed with President Bush--that with the price of oil over $55 per barrel, they didn't need tax incentives. And today, oil is $109 per barrel.
The CEO of Chevron told the committee that ending these breaks ``will have a minimal impact on our company, minimal.''
Let me be as clear as those executives were then: This bill has nothing to do with Chevron's or Conoco's or Exxon's ability to operate refineries or put folks to work here at home.
It has everything to do with holding their top-level executives accountable to all American taxpayers as they rake in billions of dollars in profits every year. Right now Big Oil executives are writing off the royalties they pay to foreign countries as taxes, and until we fix it, all of us are paying for it.
That means you and I are footing the bill every time one of these big companies writes a check to the government of Saudi Arabia or Nigeria. And they are telling us they don't want it or need it. We should do the fiscally responsible thing and close these loopholes.
Instead, we should use that $8.5 billion to pay down our deficit. And that is what this bill does.
Special tax breaks are supposed to make companies more competitive and get new technologies into the market. But for major oil companies we have written a privileged tax code just for them.
Some of these provisions have been on the books since 1913. I don't know what companies after 98 years still need a subsidy, but if it does, either it isn't very effective or the system is being abused.
As you will hear again and again this week--because it is just an astonishing number--as gas surpasses $4 per gallon, oil companies are getting $4 billion annually in tax breaks.
The big five oil companies have made nearly $1 trillion in profits in the last decade. Nearly $32 billion of that came in the first 3 months of this year alone.
But what is happening to gas prices?
Rather than bringing down prices at the pump, these giveaways merely line the executives' pockets and run up the deficit. All the while, gas prices have gone up.
For example, Exxon, the biggest of the oil companies in the U.S. made more than $9 billion dollars in profit last year--just their U.S. operations. And how much did they pay in taxes? Just $39 million.
That is 0.4 percent.
But this is more fair than in 2009, when Exxon received a $156 million tax refund from the IRS.
That means we as taxpayers are paying them. The Tax Code is broken and this bill will help fix it.
Right now, we are making tough choices about how to get a handle on our Nation's debt. We have tough debates ahead about heating homes in rural America, and investing in crumbling highways, and strengthening the future of Medicare.
All the while, we are still literally writing checks to our biggest oil companies who don't need them.
After causing the largest offshore oil spill in American history, BP still managed to rake in more than $7 billion in profits, up 17 percent from the year before.
But most of these big companies are not developing their onshore resources here at home.
How do I look the oil worker in Montana's Bakken Field in the face and say: We are giving the largest oil companies a billion dollars a year to go drill overseas, taking your opportunities offshore.
Dual Capacity, the most egregious of these tax provisions, subsidizes $1 billion each year in royalty payments to foreign governments that don't like us very much. We don't let companies producing in America credit royalty payments to their taxes, so why would we do that for companies that produce outside of the U.S.?
And does this make us safer? Does it bring stability to the market? Absolutely not.
As we have all watched in the last few months, turmoil in the Middle East has driven up speculation and driven up prices.
Oil prices fell about 10 percent last week--though not enough to relieve hardworking Montanans with any changes in prices at the pump.
Prices didn't fall because of the discovery of a new oil field or a new technology. It happened because some folks on Wall Street moved some numbers around on paper.
There is no accountability in that. And that is why we're trying to change it.
But unlike on Wall Street, there are places where folks are doing the hard work of oil discovery and developing the technology to lower the cost of oil.
A lot of that has to do with the ``small guys'' in the oil business. And they are successful. In fact, domestic production is going strong--at its highest level in almost a decade.
They are making risks and getting new technology into the field, like in eastern Montana.
My State is home to likely the most productive domestic onshore oilfield in the United States. And small oil companies are doing good, responsible in securing America's energy future.
The Bakken Field is estimated to hold nearly 4 billion barrels of oil. They are leading the way in developing new technology for oil field development.
Where is Exxon? They aren't reinvesting the last quarter's $11 billion back in U.S. exploration.
In fact, in 2009, they paid their shareholders 90 percent of the profits to shareholders, leaving just 10 percent to invest in their workforce, research and development, exploration, safety and the expanding energy frontier.
Contrary to what some of my colleagues are saying, eliminating these wasteful subsidies won't raise gas prices. I want to repeat that:
Eliminating wasteful subsidies will not raise gas prices.
Many of these handouts have been on the books for decades as prices have continued to rise.
It is time to close these loopholes for big oil in order to strengthen our national security--and our energy future. It is time to end the taxpayer handouts to Big Oil.
This bill returns us to a responsible path toward energy development that benefits taxpayers and consumers. And it starts addressing the debt and deficit. It is the right thing to do.
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