Dr. Kevin DeJesus, Kmareka’s Mideast policy expert, sends this post on the relationship between profits for corporations and austerity for the rest of us...

Indeed no one intellectually, politically, or humanistically
interested in the Middle East, nor in the situation of common
Americans who struggle to keep out of the recession’s manifold black
holes, while simultaneously caring for kin who are both young and
aging, can elide questions concerning the role of big oil in the
making of war and economic morass. Nowhere is this connection clearer
than in the current soar in gas prices consumers are dealing with
across the globe. Big Oil’s field day on the American pocketbook must
come to an end, while our need for far more nuanced energy policies
and practices, as well as for continually more sophisticated policy
approaches to the Middle East increases exponentially day by day.

One means by which common America can begin to reclaim its political
power, while contribute to re-structuring our economic landscape is to
contact your US Senator, no matter where you are located across this
vast union, and tell them you expect their support of US Senator
Patrick Leahy’s (D-Vermont) efforts to pass S.2204, the “Repeal Big
Oil Tax Subsidies Act.” Simply state, you need money for medical
co-pays, and by reducing Big Oil’s grab at the pump vis-a-vis this
legislation, average Americans can begin to meet day to day expenses
more easily. Gratefully, both Senator Reed and Senator Whitehouse are
strong supporters of this legislation. You can also email your Senator
using the Open Congress Website, here.

Remember, those with hands in Big Oil’s pockets will indeed be
contacting legislators. Those tightly grasping pen and checkbook with
fear and dread may yet to realize how much power they have. It’s time
to use it!

Here is Senator Leahy’s recent statement on this legislation:

Statement Of Senator Patrick Leahy On The Repeal Big Oil Tax Subsidies Act

Statement As Prepared For Delivery

March 28, 2012

Mr. President, it is long past time to close the wasteful tax
loopholes for Big Oil. Over the past 10 years, the five biggest
private sector oil companies — BP, ExxonMobil, Chevron, Shell, and
ConocoPhillips — have amassed combined profits of almost $1 trillion.
Last year was no different. Due to skyrocketing prices for oil,
these same five corporations raked in a record-breaking $137 billion
in profits. Despite this massive windfall, Big Oil continued to
receive billions of dollars in taxpayer subsidies – subsidies that are
unnecessary and, in my opinion, unconscionable. The Repeal Big Oil
Tax Subsidies Act will eliminate these harmful subsidies and level the
playing field for all Americans.

Big Oil does not need these big tax breaks, and the prices they set
for consumers at the pump suggest that they don’t appreciate them. As
of March 22, the national average price of regular gasoline is over
$3.88 per gallon – up almost $0.34 from a year ago. I need look no
further than the prices at the pump in Vermont, where the average
price for a gallon of gasoline is $3.85 – up approximately $0.30 from
the average price in March 2011. This price increase is especially
burdensome in rural states like Vermont, where people must often rely
on cars to get around, and heating fuel is a life-or-death necessity
in the winter. For every penny that the price of gasoline increases,
big oil companies make an additional $200 million per quarter.

In spite of their ever-increasing profits and unneeded subsidies, the
five major oil companies have done absolutely nothing to bring down
prices for average consumers. Instead, they have padded their own
pockets, using the vast majority of their net profits to pay
exorbitant dividends, repurchase stock, lobby government officials,
and buy radio and newspaper advertising to fight this bill. These
actions benefit elite oil company executives and the companies’
largest stockholders, but do nothing whatsoever to ease the pain of
hardworking Americans who trying to commute to their jobs every day or
heat their homes during the long winter months.

This bill will halt the transfer of money from hardworking middle
class families to oil company fat cats by ending more than $2 billion
in annual tax breaks. It is a watershed moment for both energy policy
and deficit reduction, and I support it whole heartedly. Eliminating
these wasteful tax breaks that benefit a few, undeserving companies
will allow us to reinvest in clean energy technologies that will
benefit everyone. These investments will improve our national
security by making the U.S. less dependent on foreign oil. They will
also strengthen our economy and create new green jobs for the large
number of Americans who are currently out of work and facing hard
times.

Specifically, the Repeal Big Oil Tax Subsidies Act would renew
incentives for clean energy technologies and put America on the path
to energy independence. In order to break free from our unhealthy
addiction to oil, we must choose the President’s “all-of-the-above”
energy strategy which will grow clean energy industries, including
alternative fuel vehicles, advanced manufacturing, biofuels, and
solar, to name just a few. Savings from repealing these tax subsidies
for Big Oil will help continue important incentives for alternatives
to oil and usher in a bright new future of energy independence.

In addition to the benefits that we will receive from investing in
clean energy technology, the remaining savings from this bill will be
dedicated to reducing the national deficit, a goal shared by both
Democrats and, supposedly, Republicans. Time and again we have heard
seemingly impassioned rhetoric from Republicans about the need to
balance the budget and reign in spending. And yet, when given the
chance to end more than $2 billion per year in unnecessary tax breaks,
Republicans have stood with Big Oil. Instead of standing with Big
Oil, we need to stand up to Big Oil.

For years, Republicans have opposed efforts to end taxpayer subsidies
to the major oil companies. However, lavishing these giant
corporations with incentives they do not need merely deepens our
deficit and takes money out of the pockets of hard working families,
money which could be spent growing the economy and hastening our
recovery. The Repeal Big Oil Tax Subsidies Act is precisely the
action we should take to ensure that oil companies pay their fair
share to help lower the deficit, just as working class taxpayers do.

It is important to note that cutting these subsidies will not result
in less oil production or an increase in prices. Expert analysis has
revealed that it costs the big five oil companies only about $11.00 to
produce a single barrel of oil. This amount is dwarfed by the current
price of a barrel of oil, which has consistently hovered around $110
per barrel. At today’s prices, oil companies regularly earn $100 in
pure profit from each barrel of oil that they sell. In fact, the
former Chief Executive Officer of Shell Oil Company, John Hofmeister,
has admitted that, in his point of view, high oil prices made
subsidies unnecessary. Therefore, it is highly improbable that a
small change in tax subsidies would reduce their output. Furthermore,
because oil is a global commodity, any incremental change in
production that might result from changing oil subsidies in the United
States will likely have no impact on world oil prices and, therefore,
no impact on the price of oil.

The Senate should also go one step further and once again pass the No
Oil Producing and Exporting Cartels Act (NOPEC), which I have filed as
an amendment to today’s bill, along with Senator Kohl and others. We
must do everything we can to ensure that oil prices are not
artificially inflated, driving up gas prices at the pump. Our NOPEC
amendment will hold accountable those who engage in collusive behavior
that artificially reduces supply and increases the price of fuel by
allowing the Justice Department to crack down on illegal price
manipulation by oil cartels. This illegal manipulation affects us
all. As long as OPEC’s actions remain sheltered from antitrust
enforcement, OPEC’s member-governments will continue to have the
ability to wreak havoc on the American economy and their destructive
power will remain unchecked.

The benefits of the Repeal Big Oil Tax Subsidies Act should be obvious
to all Senators. An overwhelming majority of the Americans, 66
percent, have said that repealing tax subsidies for Big Oil is an
acceptable way to help reduce the deficit. I would go further. Not
only is this an acceptable way to reduce the deficit, but in these
lean times when so many are struggling to make ends meet, it is an
essential way to bring the budget back in line. It is time to end Big
Oil’s free ride at the expense of taxpayers.

Going forward, our focus should be on 21st Century clean energy that
powers a jobs boom and fuels our economy. If these tax breaks were
ever justified, that day has long passed. The Repeal Big Oil Tax
Subsidies Act will end the unjustified federal subsidies for the
biggest oil companies that are enjoying record profits at the expense
of working families. It will propel us into the future by investing
the savings in clean energy technologies and reducing the federal
deficit.

Senators must make a choice: stand with the American people and stand
up to Big Oil or continue business as usual? I think the choice is
clear, and strongly support this bill.
—

Kevin M. DeJesus, PhD