How much of your tax money goes to oil and gas?(Read article summary)
The US will begin publishing annual reports on how much the government spends on fossil fuel subsidies. It's part of the White House's broader push to be more transparent in mineral wealth extraction, but there's debate over exactly what subsidies are and how important they are to US energy.
Critics are always talking about subsidies to Big Oil, but how much US tax money actually goes to the oil and gas industry? You may find out soon enough.
The US will start publishing annual reports tallying up the money it spends to support the extraction of fossil fuels, according to a White House report on open government released Thursday. It's in line with a broader effort to implement the Extractive Industries Transparency Initiative (EITI), an international standard that promotes transparency and accountability in mining and extraction.
President Obama has pushed for an end for fossil-fuel subsidies, which he says gives established industries an unfair competitive advantage over emerging renewable companies.
But the oil and gas industry has long fought this line of thinking, saying that what critics call subsidies are actually tax provisions that are standard business deductions not unique to their industry. Removing such provisions would raise energy prices, critics say, and move investment elsewhere.
Thursday's announcement isn't a call to end taxpayer support for oil and gas, but it does take a step toward defining and documenting the relationship between government and industry.
"The United States has actively worked towards increasing revenue transparency and accountability in relevant industry sectors, ensuring that American taxpayers receive every dollar due for the extraction of the Nation’s natural resources," the White House report reads.
President Obama first pledged commitment to the EITI standard two years ago, and the administration hopes to publish the country's first EITI report in 2015 and to achieve EITI compliance in 2016.
The Department of the Interior is organizing US efforts and has initiated a public comment period on EITI ending Nov. 18. Twenty-five countries, largely in mineral-rich West Africa, are currently EITI compliant.
In 2011, developing and industrialized countries spent $1.9 trillion to subsidize fossil fuels, according to the International Monetary Fund, with the US spending $502 billion. The IMF has called on leaders to cut back on the subsidies, saying they benefit primarily the wealthy, who spend the most on energy.
Removing such subsidies, or tax provisions, would hurt everyday consumers, the industry counters, in the form of higher gas prices and electricity costs.
"America’s oil and natural gas industry already returns more than $85 million to the federal Treasury every day, pays taxes at far higher effective rates than most other industries, and is one of the few industries that created jobs throughout the economic downturn," reads an online briefing on tax issues by the American Petroleum Institute, an oil and gas lobby. "Increasing the industry’s taxes would push oil and natural gas investment elsewhere, diminish job-creation and stifle economic activity here at home."