The U.S. Government and Oil

By Tati


1. How and why do the U.S. Government and oil companies work together?

The U.S. government and oil companies are both influential powers that build and gain their power off of each other. Even though oil companies such as BP, Exxon Mobile, and Chevron already have tons of money, they are greedy, and want more. Basically, the government gives subsidies to oil companies, and in turn, the oil companies contribute money to congressional and presidential campaigns. They also give people associated with the oil companies high ranks in the administration, which gives the oil companies more even more power, and the government more money. It’s essentially a win-win situation for both of them, and an all around loss for the rest of us.

2. How much does the government subsidize oil companies, and what is a subsidy?

A subsidy is a large sum of money granted by the government to help out an industry or business. The subsidy helps to keep the price of the service or commodity low enough to avoid competition from other companies. The U.S. government currently gives subsidies through: taxes, program subsidies, and protection subsidies. The tax money is mostly used to prevent other oil companies from competing with the subsidized companies. Program subsidy money is money that is used to pay for the extraction and production of petroleum. The protection subsidy money is used for protection services required by petroleum producers and users (hence the name). In taxes, the subsidies total to about $9.1 to $17.8 billion dollars annually (that's YOUR tax money, people)! In program subsidies, the total per year is $38 to $114.6 billion. In protection subsidies, the total amounts to $27.2 to $38.2 billion annually. The grand total the government spends a year on subsidies for oil companies is approximately $123 billion dollars a year!

3. What steps (if any) are the U.S. Government taking to find renewable energy sources?

The Department of Energy (DOE) is awarding $43 million to 41 projects over the next five years to speed technical innovations, lower the costs, and quicken the projects for deploying offshore wind energy systems. The DOE also recently awarded $38 million to advance the technology and reduce the cost of geothermal energy projects, and gave almost $17 million dollars for research and advancement in hydropower technologies. In 2009, the DOE gave more than $2.2 billion dollars to universities, businesses, and industries researching and implementing their renewable energy ideas. In comparison to that $123 BILLION the government gives to oil companies every year, this isn’t that much money.


Sources:

http://www.progress.org/2003/energy22.htm


http://www.pbs.org/now/shows/347/oil-politics.html