Senate Republicans are allowing a Democratic bill to go forward that would end tax subsidies for major oil producers.

The Senate voted Monday evening to allow debate on a bill introduced by Senator Robert Menendez, D-N.J. The Repeal Big Oil Tax Subsidies Act would end taxpayer-funded tax breaks for the five largest, most profitable oil companies in the world and use those savings to extend expiring energy tax provisions for one year and reduce the deficit.

“This debate is pretty simple,” said Menendez. “It’s about whose side you’re on.  You’re either on the side of Big Oil companies making record profits, or you’re on the side of middle class American families who can’t afford the price at the pump—let alone afford to chip in billions of dollars more to make oil profits even higher. We know whose side Big Oil is on when they take $24 billion in taxpayer money and actually produce less oil, not more, leaving families with higher gas prices while they continue to make record profits.”

Menendez pointed out that over the last decade, the five largest oil companies (BP, Exxon, Shell, Chevron and ConocoPhillips) have enjoyed nearly $1 trillion in profits and tens of billions of dollars in taxpayer subsidies. Last year alone they amassed $137 billion in profits, yet actually produced 4 percent less oil.

Menendez said his legislation would save nearly $24 billion over 10 years by cutting oil subsidies and use $11.7 billion of that savings to extend clean energy tax incentives. The bill would extend tax credits for biodiesel, cellulosic ethanol, and alternative fuels such as natural gas and propane. It also extends tax credits for wind, energy efficiency, and some fossil fuel incentives as well. Over $12 billion saved from cutting oil subsidies would be used to lower the deficit.

The bill is not expected to pass in the House or the Senate, but lawmakers will be able to debate the measure now that it has cleared the procedural hurdle.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access