Perhaps two of the state’s stronger backers of oil and gas recently called for an end to energy-industry tax breaks. But do they understand that by calling for an end to energy-industry tax breaks, they are also talking about their sacred cow: oil and gas?
In this hyper-political environment, it’s often hard to find common ground. That’s why, to great surprise, I recently came across a little-noticed 2011 open letter to Congress signed by New Mexico’s energy advocates Paul Gessing of the Rio Grande Foundation and Marita Noon of Energy Makes America Great.
In the letter, “It’s Time to Put an End to Energy Subsidies,” they join others in decrying the folly of energy-industry tax breaks. The letter, which was co-authored by several limited-government advocates, states: “Instead of promoting a reliable and affordable energy industry, the subsidy-first energy policy that has prevailed the past three decades has created whole industries dependent on government and focused as much on ensuring their share of taxpayer largesse as they are on developing energy.”
There you have it: Perhaps two of the state’s stronger backers of oil and gas, calling for an end to energy-industry tax breaks.
But do they understand that by calling for an end to energy-industry tax breaks, they are also talking about their sacred cow: oil and gas?
The oil and gas industry is slated to receive $47.1 billion in tax breaks over the next five years, with $24.3 billion of that amount only available to their industries, according to the Checks and Balances Project, an investigative project that focuses on policy decisions that affect taxpayers and consumers. Other New Mexican businesses need not apply for these tax breaks.
Surely, when Gessing and Noon take on energy tax breaks, they must also be speaking of oil and gas, right?
Sadly, no one has really put them on spot and asked their opinion on the subject.
Giving billions to big oil
Why is all this important and why single out oil and gas? The answer is fairly simple.
The oil and gas industry has enjoyed hefty tax breaks for decades. This means that for most of our lifetimes, the industry has received taxpayer dollars to help them explore and extract their product. No one would argue with the importance of locally sourced oil and gas and the economic contributions these producers make to our state.
The problem is that the oil and gas industry gets tax breaks even as it is wildly profitable.
According to the 2011 “Subsidy Gusher” report by the nonpartisan watchdog Taxpayers for Common Sense, the top five oil companies alone reported more than $850 billion in total profits over the last 10 years.
Here’s a memo for the armchair economists: Typically, industry tax breaks are used to help fledgling industries until they can get on their feet. Once they are economically viable and start producing tax income, such subsidies should be scaled back so that taxpayers no longer have to foot the bill.
But here we are – all of us – giving billions of dollars to big oil, which is taking us to the cleaners twice: on Tax Day and at the gas pump.
Do Gessing and Noon believe this should continue? Do our candidates for Congress? Or do they agree that it is time to end the special treatment for Big Oil and make this industry make do with the $850 billion in profits we have all paid it over the past decade?
Marie Aragon is a lifelong New Mexican and a member of Organizers in the Land of Enchantment (OLÉ New Mexico). OLÉ is a grassroots community organization of working families focused on strengthening our communities through social advocacy and economic reform, using issue-based campaigns to ensure that working families are playing a critical role in shaping New Mexico’s future.