VIDEO: Fox Loves Energy Subsidies -- As Long As They're For Oil
Blog ››› ››› JOCELYN FONG & SHAUNA THEEL
To protect the $4 billion of annual tax breaks for oil and gas companies, which President Obama has repeatedly proposed eliminating, Fox News has been offering up every conceivable defense, and in the process has completely tied itself in knots.
Fox declares that the tax preferences benefitting oil companies are not "subsidies" since they are not direct payments. But the network previously called tax credits for electric cars "subsidies." (Fox also says that Media Matters is "subsidized" because we are a tax-exempt organization.)
Fox insists we shouldn't cut the tax incentives for oil because they make up only a fraction of our deficit problem. But when it comes to supporting clean tech, they decide we "can't afford it."
And Fox routinely uses the words "free market" when arguing against federal spending on clean energy, but that term is nowhere to be found in its coverage of oil subsidies. Instead, Fox argues that the tax preferences are "wonderful" because they "encourage" the industry to make money, pay shareholders, and hire people. While it may seem backwards to many of us, the fact that the oil industry is already massively profitable (and doesn't need encouragement from the government) is, in the Fox News worldview, an argument in favor of giving them tax breaks.
The top five oil companies made $137 billion in profits last year. That amount of money could fund the entire Department of Energy for over 5 years. And yet, as the New York Times reported, "oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process." This chart from the nonpartisan Congressional Budget Office shows that fossil fuels have been boosted by federal tax preferences for decades:
Not only that, but oil companies receive a huge indirect subsidy: much of the nation's infrastructure was built for oil-powered cars, locking in our addiction to oil. In addition, many of the costs of oil use -- climate change, oil spills, military spending, public health impacts -- are not included in the price we pay at the pump.
It's for all these reasons that virtually everyone, including Republicans and oil executives, have at some point acknowledged that the tax preferences for oil are a poor use of budgetary resources.
Federal assistance for clean energy, on the other hand, can actually make a difference in whether new technologies gain a foothold in the marketplace and whether the United States can compete with other countries inventing and building these products. In a recent report, the American Energy Innovation Council, a group of prominent CEOs including Bill Gates, said "total U.S. investment in energy innovation, by both the public and private sectors, pales in comparison to the levels of investment typical of other technology-dependent sectors such as pharmaceuticals, aerospace, computers, and electronics." The report went on to warn:
Unfortunately, the country has yet to embark on a clean energy innovation program commensurate with the scale of the national priorities that are at stake. In fact, rather than improve the country's energy innovation program and invest in strategic national interests, the current political environment is creating strong pressure to pull back from such efforts.