March 30, 2012
Big Oil’s Bogus Campaign
President Obama and the Senate Democrats have again fallen short in their quest to eliminate billions of dollars in unnecessary tax breaks for an oil industry that is rolling in enormous profits. A big reason for that failure is that some of those profits are being continuously recycled to win the support of pliable legislators, underwrite misleading advertising campaigns and advance an energy policy defined solely by more oil and gas production.
Despite pleading by Mr. Obama, the Senate on Thursday could not produce the 60 votes necessary to pass a bill eliminating $2.5 billion a year of these subsidies. This is a minuscule amount for an industry whose top three companies in the United States alone earned more than $80 billion in profits last year. Nevertheless, in the days leading up to the vote, the American Petroleum Institute spent several million dollars on an ad campaign calling the bill “another bad idea from Washington — higher taxes that could lead to higher prices.”
Studies by the Congressional Research Service, among others, say that ending these tax breaks would increase prices by a penny or two a gallon. Yet all but two Senate Republicans have been conditioned by years of industry largess to accept its propaganda. In the last year, the industry spent more than $146 million lobbying Congress. In Thursday’s vote, senators who voted to preserve the tax breaks received more than four times as much as those who voted against.
Money has always talked in Congress. Now industry allies are aiming at voters. The American Energy Alliance, a Washington-based group that does not disclose its financial sources, on Thursday began an ad campaign in eight states with competitive Congressional races.
Voters in Michigan, Virginia, Florida, Ohio, Iowa, Nevada, New Mexico and Colorado will hear a 30-second spot peddling the industry’s misleading arguments against the Obama administration’s energy policies — including the fiction that those policies have led to higher gas prices: “Since Obama became president,” it says in part, “gas prices have nearly doubled. Obama opposed exploring for energy in Alaska. He gave millions of dollars to Solyndra, which then went bankrupt. And he blocked the Keystone pipeline, so we will all pay more at the pump.”
Four sentences, four misrepresentations. Gas prices, tied to the world market, would have gone up no matter who was president. Mr. Obama has not ruled out further leasing in Alaskan waters. Solyndra, a solar panel maker, is the only big failure in a broader program aimed at encouraging nascent energy technologies. The Keystone XL oil pipeline has nothing to do with gas prices now and, even if built, would have only a marginal effect.
The message war has really just begun. The oil industry has the money, but Mr. Obama has a formidable megaphone. He must continue to use it.
