How We Subsidize A Mega-Rich Industry That Destroys Us

The U.S. ranks as the No. 1 oil-subsidizing nation in a world that spent a total of $557 billion globally to subsidize the energy industry in 2008.

The Deepwater Horizon disaster cannot be removed from that context, since the spill is essentially the direct result of domestic policies that buttress the oil industry and their profits.

BP executives were well aware that safety and environmental rules were being flouted at its drill platforms and ships. Several internal investigations told them this, so they knew there was a serious risk of an accident occurring. Instead, they displayed a profits-before-planet-and-people ethos in ignoring the risks.

But not all of the company’s violations went unnoticed, despite the fact that U.S. Interior Department regulators were either asleep at the wheel or not even trying to keep their eyes on the road.

In fact, according to analysis by the Center for Public Integrity, “Two refineries owned by oil giant BP account for 97 percent of all flagrant violations found in the refining industry by government safety inspectors over the past three years.” And last October the Occupational Safety and Health Administration levied the largest fine in its history against BP for not correcting safety problems at the Texas City refinery where an explosion killed 15 workers in 2005.

The OSHA fine was a seemingly whopping $87 million. So you might ask yourself: Why on earth would a company so obsessed with profits not clean up its act, if only to save money? The answer: $87 million is a mere cost of doing business if you bring in profits like BP does— to the tune of nearly $17 billion last year.

So this begs yet another question: Why on earth are we still subsidizing an industry that can easily afford worker and environmental safety measures, but chooses not to? Especially when large gushing spills destroy ecosystems and livelihoods?

A new analysis by the Inernational Energy Agency really hits this point home. The agency found that the world spent a surprising $557 billion to subsidize the energy industry in 2008, more than previous estimates. Phasing out these subsidies over the next decade, they found, would cut global oil demand by 6.5 million barrels of oil a day and reduce carbon dioxide emissions by nearly 7 percent — the equivalent of the current combined output of Germany, France, the UK, Italy and Spain.

Though the IEA found that the US is not in the top 5 of energy subsidizers — that distinction belongs to Iran, Russia, Saudi Arabia, India and China — reports that the US is in fact the #1 subsidizer of the oil industry, having spent some $15.6 billion since 2000.

The Obama administration is now trying to change this. The president wants to end some $36.5 billion in subsidies for oil and gas companies as a means to “foster the clean energy economy of the future and reduce our reliance on fossil fuels that contribute to climate change.”

Of course that call was met by the fossil fuels industries with the inevitable dire forecasts of soaring energy prices and consumer pain. But when you hear this type of fear-mongering, just remember: BP made $17 billion last year, while Exxon made an obscene $45 billion.

Big Oil might think anything less than record profit each year should mean pain at the pump for you and me, but surely we’re smarter enough to realize what a load of crap that is. Right?

Photo credit: Neubie

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