Tax Break Equalityby Senator Edward J. Markey
Posted on 2015-12-16
MARKEY. Mr. President, today is a great day to be an oil company
in America. Not since August 27, 1859, when Edwin Drake drilled that
first oil well in Titusville, PA, has there been a day as good for the
oil industry in our country as today.
Why is today a great day for Big Oil? Well, I will tell you. Last night at 2 a.m., the Republican leadership released its spending bill. Tucked into that bill on page 1,865 is a provision that would massively reshape our Nation's energy policy. Tucked into that bill is language that would roll back longstanding U.S. law and allow the oil industry to sell American crude oil overseas for the first time in more than 40 years.
If this becomes law, it means potentially $175 billion in new revenue for the oil industry over the next decade, up to $500 billion in new revenues for the oil industry over the next 20 years. That is why this provision is in there. It is corporate welfare for the most profitable industry in the history of the world, the oil industry.
What does this mean for the American people? Lifting the ban on the exportation of American oil so it goes overseas rather than staying here in America. It will be a disaster for our economy, for our climate, for our national security, and for our consumers. Do you remember the old mantra of the Republican Party, ``Drill here, drill now, pay less''? Now they have changed it. Their new mantra is ``Drill here, export there, pay more.'' The oil industry push to export American oil isn't about helping consumers at the pump; it is about pumping up Big Oil's profits. When has the oil industry ever pushed for policies that would drive down prices and their profits? These are for-profit corporations, not charitable institutions. They are looking to make lots of new money off of selling oil around the world but not here in the United States.
If we allow this to happen, it will be a disaster for consumers in many regions of the country--for example, the Northeast. The Department of Energy has said that losing our refineries on the east coast, which could easily happen because of this new law, will lead to ``higher prices,'' ``higher price volatility,'' and the potential for ``temporary [supply] disruptions'' in our region.
Right now consumers across America in 2015 are saving $700 because gasoline prices are so low and $500 on home heating oil because prices are so low. That is a stimulus, almost like a tax break in the pockets of working-class and poor Americans all across our country.
Exports would wipe out this economic stimulus for average Americans. It would begin to lead to the higher prices that the oil industry wants, both on the global market and here in the United States of America. And the new revenue the oil industry collects from exports is not magically created out of thin air; it will be transferred from American consumers and our domestic refiners into the pockets of the Big Oil companies in our country. This could amount to one of the largest single energy taxes in the history of the world.
Remember, Saudi Arabia and their OPEC allies control the global oil trade. They control the price that is paid on the global market, and recently OPEC suggested oil prices may rise again next year, putting in jeopardy the economic benefits that low gasoline prices and the low home-heating oil prices have provided for average Americans.
Second, national security. Importing our oil while we export our young men and women abroad--that is what we have right now. We are importing oil from Saudi Arabia, from Nigeria, from Algeria, from Kuwait, and from Iraq. That is what happens every day. That is a big reason we have so many young men and women over in the Middle East protecting those cargo ships of oil coming into our country. We still import 5 million barrels of oil a day. China and the United States are the largest importers.
We don't have oil to export. We are still importing 25 percent of our oil into our country right now, and we are importing it from countries we should not be importing that oil from. If we have a chance to back out that oil, to tell those countries we don't need their oil any more than we need their sand, we are doing a big favor for our young men and women in uniform. We are allowing ourselves to step back and be more dispassionate in the decisions we make about our relationships with all of those countries.
What this decision says is we are going to export our own oil even as we continue to import oil from the Middle East. This will only heighten our dependence upon oil coming in from countries that we should not be importing oil from if we have a chance to back it out. That is what is wrong with this decision at its heart--oil. It is not like a widget. It is not like a computer chip. You don't fight wars over that. You fight wars over oil. That is why ISIS targets the part of Syria that it does. That is why the part of Saudi Arabia that has the oil is the one now being jeopardized by rebels. That is why Libya is so valuable and being fought over--oil, oil, oil--and the revenues that they produce in order to then create that instability, create that jihadism that we are dealing with. We should be backing out all the oil we are importing from that region if we have a chance to do so, and we do, but not after this bill passes. We are going to be in a situation where we basically are saying we are going to be permanently dependent upon that oil being imported from that region.
I listened last night to all the Republican candidates for President debating in Las Vegas about national security. Well, that is what this is all about--this is all about that oil. This is all about that oil revenue that goes into the pockets of people who should not [[Page S8714]] have our money, who spend it in ways we don't feel good about.
In my opinion, this decision will dramatically weaken our national security position, weaken our ability to be stronger in the Middle East because we are less dependent upon pretty much the only product they make--oil--and would be able to deal with the national security issues in a much better way, being much more clear-eyed, dispassionate, and protective of American interests and the interests of those we are allied with over the world.
Third, this is a tale of two tax breaks. One tax break is for Big Oil. They get $7 to $8 billion a year in tax breaks, and it is permanent--permanent. What happened in this bill is that the $7 to $8 billion for tax breaks for wind and solar are now going to be phased out. We hear constantly from Republicans out here on the floor that they believe in ``all of the above.'' Well, you can't have ``all of the above'' competing fairly if one industry--the oil industry--gets their $7 to $8 billion in tax breaks every year, and wind and solar--the technologies of the 21st century--are going to have their tax breaks phased out over the next 4 to 5 years. That is in this bill.
So the oil industry gets $500 billion in new revenues over the next 20 years, $140 billion worth of tax breaks over the next 20 years, and wind and solar watch their tax breaks evaporate over the next 4 to 5 years. Is that a good deal for America, for the climate, for our job creation in America with jobs that are here in America? That is not a good deal. By the way, Big Oil wants their tax breaks so they can export the oil out of our country. Is that a good deal? It absolutely is not.
For the offshore wind industry, which has yet to be born, we need the tax breaks to incentivize companies--wind companies from around the world--to come to the Northeast, to come to this incredible place which has been called the Saudi Arabia of wind. Those tax breaks are going to phase out before an industry is even born--the offshore wind industry. Does that make any sense? If we are going to give tax breaks to oil, we should give tax breaks to the offshore wind industry. We should give tax breaks to all these renewable industries on a predictable basis for years to come. That is not happening in this bill. It is just the opposite.
For national security, for equality, in terms of all energy resources but especially those nonpolluting energy resources, there should be equality, but there is not. There is not. We could have an America with 40 percent of all electricity being wind and solar by the year 2030, if we kept the same tax breaks between now and 2030--40 percent. The 7 percent we would add in from hydropower and then the power that comes from nuclear power in our country, over 60 to 65 percent of all electricity in America would be noncarbon polluting by the year 2030, but the tax breaks for wind and solar are going away in 4 to 5 years. Does that make any sense? No, not at all. That is what this bill does, and that is why this bill has that provision that was inserted late at night a couple of nights ago that is on page 1,865 in this omnibus bill.
The Koch brothers wrote a letter to all Republicans a couple of days ago. They said: Lift the ban on exportation of oil out of our country, even as we still import from the Middle East, and reduce and kill solar and wind tax breaks.
Good. We understand the agenda. It is in this bill, and it is not good for America. It is not who we are. It is not this innovation economy which we know is going to have the capacity, like we did with cell phones, to very briefly in history just move from this kind of a phone in 1996, when it never really existed in people's pockets anywhere on the planet, to this kind of phone and now 600 million people in Africa have it today. We did that--America. We can do the same thing with renewable energy, but we need to ensure that those tax breaks are equal to oil's, for oil is the technology of the 19th century, the oil of the 20th century. We have to have a vision of what is possible here in the 21st century. This bill does not include that.
That is why it is being added to a must-pass bill. It could not pass if it was not in a must-pass bill with unrelated issues, unrelated appropriations. They needed it to carry it through because they could not do it standing alone down here on the floor of the Senate.
So whether it be the impact on our economy, which is going to drive prices higher, or whether it be on our national security, it is going to increase our dependence upon imports from the Middle East. Whether it be the impact on consumers, where they are going to be paying higher prices, or whether it be the environment, where, believe it or not, by the year 2025 this is going to lead to upward of 2 to 3 million new barrels of oil per day being exported out of our country--that is the equivalent of building 150 coal-burning plants in our country and sending those emissions up into the sky.
Having a bill pass on the floor of the Senate in the same week that the whole world came together in Paris and signed an agreement saying we were going to have less greenhouse gases going up into the atmosphere and that the United States was going to be the leader--we cannot tell the rest of the world to reduce their dependence on fossil fuels while we announce in the next week we are going to change our policy and start drilling for 2 to 3 million new barrels just to export it out of our country and phase out the tax breaks for wind and solar as we tell the rest of the world they should be moving to wind and solar. That does not work. You cannot preach temperance from a bar stool. You cannot preach temperance from an oil rig and tell other countries to move to renewables. It just doesn't work that way. It doesn't work that way. They might nod. They might say: Oh, don't worry. We are still going to honor our commitments. But you know behind your back as a country they are just going to be saying: I see what they are doing. We will start doing the same stuff. We will build a few more coal-burning ones. We will burn more fossil fuels over here. If they are not sincere, why should we be sincere? If they can preach temperance on Sunday and then on Wednesday say ``bingo'' in the church hall, we can do the same thing.
So I am just afraid that on every one of these lines this bill fails: environment, national security, consumers, and the economy. It is bad for America. It is bad policy. We should feel better about our capacity to innovate.
I am especially concerned about wind. I am especially concerned about offshore wind. There is a reason we call ourselves the Saudi Arabia of wind. It is because we have the potential to back out the oil from Saudi Arabia. That is why. That is our metaphor because we know how much oil they have and how they have controlled the price of oil in the world every single day since 40 years ago, when they decided to have their first oil embargo. That is when we put this law on the books that we would never export our oil again. We would keep it here.
It is 40 years later. The Middle East is in chaos. It is hard for anyone to even describe what the future for the Middle East is going to be. How many of these leaders are actually even going to be in place in 5 years? No one in the world knows, but we do have one thing. We have our own domestic energy source, wind--natural gas, wind, and solar. We should keep it here to protect ourselves. It will make us a better partner with the rest of the world. If we are totally strong, we can project our power diplomatically, economically much better than we are.
So for me this is a historic day. I understand what Big Oil wants to do. I understand what the Republicans want to do. Our leader Harry Reid did his absolute best to get the best deal he could for the renewable energy sources that we have, to stand up as long as he could these tax breaks. He did a good job, but the pressure was on him from the Republicans. Unfortunately, in this agreement, the wind and solar tax breaks will expire. Wind tax breaks expire very soon.
From my perspective, we should have this debate out here soon. We should have a debate about the Middle East. We should have a debate about oil, about our national security, about our role in the future. It is time for us to have the big debates out here, the big debates in prime time, with everyone participating and everyone understanding that the rest of this century is going to be about the United States over in the Middle East. Whether we [[Page S8715]] like it or not, from the day we invaded Iraq, that was our destiny. So let's have those big debates. In the center of that has to be oil and the revenues that are fueling so much of what is happening over there.
I thank the Presiding Officer for giving me the opportunity to speak today.
I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Gardner). The clerk will call the roll.
The senior assistant legislative clerk proceeded to call the roll.