No–despite the title of this post, it isn’t about the insanity of the GOP’s meltdown over Kevin McCarthy’s inability to round up votes to make him Speaker–that will have to wait for a resolution. (Meanwhile, pass the popcorn…)
This is about one of America’s insane public policies.
A few years ago, research for a book required me to look more closely at the federal budget than I had previously done–especially at our bloated defense expenditures, but also at the persistence of various subsidies that may (or may not) have been prudent in the past, but clearly are counterproductive in the present.
One of those continuing subsidies supports the fossil fuel industry to the tune of twenty billion dollars a year. (That’s the conservative estimate–others put the number even higher.)
It’s bad enough that the government is continuing to support the use of an energy source damaging to the planet at a time when those funds should be incentivizing a transition to green energy. It is absolutely unconscionable that our tax dollars keep flowing to an industry that is enormously–embarrassingly, obscenely–profitable.
An industry that is also shameless.
I’ve previously defined the Yiddish word “chutzpah.” It is the word that first came to mind when I read the following. (Okay, the actual first words that came to mind were too filthy to employ in this blog.)
Fresh off posting the highest quarterly profit in its history, the U.S.-based fossil fuel giant ExxonMobil sued the European Union on Wednesday in an attempt to stop the bloc from imposing its recently approved windfall tax targeting major oil and gas companies.
The Financial Times, which first reported the new lawsuit, noted that the challenge takes aim at the European Council’s “legal authority to impose the new tax—a power historically reserved for sovereign countries—and its use of emergency powers to secure member states’ approval for the measure.”
“The new tax is due to take effect from December 31 and will apply a levy of at least 33% on any taxable profits in 2022-23 that are 20% or more above average profits between 2018 and 2021,” the newspaper explained.
In a statement, Exxon spokesperson Casey Norton insisted the company recognizes that sky-high energy costs are “weighing heavily on families and businesses” but claimed the tax would “undermine investor confidence, discourage investment, and increase reliance on imported energy.”
Excuse me if I don’t sympathize. The tax would cost Exxon an estimated $2 billion through the end of next year—in other words, a fraction of the company’s 2022 profits.
Europe has experienced a mounting cost-of-living crisis, and passage of the windfall profits tax was intended to generate revenue to provide financial support to households and companies struggling with high energy costs.
Oil and gas companies like Exxon have been accused of exploiting global energy market chaos spurred by Russia’s war on Ukraine to hike prices and pad their bottom lines.
Exxon previously announced that the company had generated profits of $19.7 billion between July and September. That exceeded the profits of any other quarter in the company’s history.
Further evidence of corporate greed: the company has announced it will raise its dividends and expand its share buyback program, and it raised the pay of several of its top executives. (It increased the annual salary of CEO Darren Woods from $1.70 million to $1.88 million for the coming year.)
So–while consumers in Europe and the U.S. continue to struggle with elevated prices at the pump and with the inflation to which those elevated prices have substantially contributed, Exxon and its peers in the fossil fuel industry have chosen to reward their wealthy investors rather than contribute a small part of their bloated profits to the amelioration of problems they have helped to cause.
This revealing conduct joins the evidence that continues to emerge, showing that Exxon deliberately lied for years–actually, for decades– about what the company’s scientists knew about the climate crisis and the central role of fossil fuels in creating that crisis.
Congress probably can’t punish Exxon for those years of lies, but there is no excuse for continuing to subsidize an industry that continues to profit handsomely from knowingly harming the environment and spitting on the common good.
The windfall profits tax that Exxon wants to evade would cost the company a fraction of its profits, and an even smaller fraction of what American taxpayers fork over annually to the fossil fuel industry.
Continuing those subsidies makes about as much sense as handing a gun to the guy who came to rob you. it’s the definition of insanity.