Posted by | July 27, 2011 10:13 | Filed under: Top Stories

By Yashwanth Manjunath

Over the last ten years the the Big Five oil companies, BP, Exxon, Chevron, ConocoPhillips, and Shell have made over $900 billion in profits (in 2011 dollars). But despite that unprecedented financial success, those same companies still insist on receiving $77 billion in subsidies from the federal government over the next ten years to incentivize oil and gas exploration. Because nearly a trillion dollars is not enough of an obscene profit motive on its own.

In 2005 George W. Bush, arguably the biggest shill for the oil and gas industry in American history, said:

I will tell you with $55 oil we don’t need incentives to the oil and gas companies to explore. There are plenty of incentives. What we need is to put a strategy in place that will help this country over time become less dependent.

Oil prices are currently hovering around $99 a barrel, yet Republicans still will not agree to ending the billions of dollars in senseless corporate welfare to Big Oil. But hey, given that 88% of all political contributions made by the oil and gas industry go to Republicans, it makes all the sense in the world for them to protect their “sugar daddies.”

One nonsensical defense I have heard from conservatives who defend the continuation of these ridiculous oil subsidies is that if the subsidies are eliminated, gas prices at the pump will only rise further. That argument is completely illogical because oil and gas are priced globally and the United States only controls 2% of the world’s remaining oil reserves. Furthermore, with oil at $99 a barrel the oil companies do not need any extra incentives to drill for the remaining supply of American oil anyway.

What does actually raise gas prices is starting poorly-planned wars in oil-rich countries in the Middle East (like Iraq), because that political instability restricts the global supply of oil, which causes gas prices to rise. That’s an enormous reason why gas prices tripled during the Bush administration. That’s also why political instability in the Middle East is wonderful for the Big Oil companies who make even more money without having to drill for any extra oil, which played a huge role in those record $900 billion in profits.

Defending the continuation of Big Oil subsidies is defending the indefensible, unless you work as a top executive at one of those companies.

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