There’s a tax angle to everything–including the DeepWater Horizon oil spill

by Linda Beale
crossposted with Ataxingmatter

There’s a tax angle to everything–including the DeepWater Horizon oil spill

There’s a tax angle to everything–including the DeepWater Horizon oil spill
Oil is still pouring out into the Gulf ocean from the well head of the DeepWater Horizon. The entire gulf is beginning to look like an oil slick, as we learn that oil companies like BP, rig owners like TransOcean, and contractors like Halliburton (the cement plug provider in the Gulf spill) never bothered much abouit preparing for potential disasters–especially not spending money to research solutions to potential catastrophes. Quelle surprise!

There are lots of tax benefits for natural resource extraction–many that we should eliminate asap, if we are serious about preserving the environment and moving on to less destructive sources of energy (while activating our economy with real production instead of the financialization, and creating jobs, preventing reliance on middle East oil–all at the same time).

Senator Grassley wants to know just what the tax benefits and subsidies for the major contractors in the spill have been. See Grassley letter to chair of BP, May 17, 2010, asking for an accounting of all tax breaks/subsidies and royalty relief from 2005 to the present and what benefits, tax and otherwise, are received by DeepWater Horizon’s operating under the flag of the Marshall Islands; Grassley letter to chair of TransOcean, May 17, 2010, asking for the same information about TransOcean and information about its other rigs operating under foreign flags (and who made the decision to replace mud with seawater, leading to the explosion, among other things) .

Sounds like a good line of questioning to pursue to me. When we see the greed-centered decision-making of companies like BP and TransOcean, we should see as clearly as possible the way we’ve provided tax expenditure “handouts” to them over the years. Welfare for corporations is a growing item in our budget–that will likely be added to by the “extenders” bill under consideration at this time in Congress.

Grassley also is seeking full information on the Minerals Management Services lax regulatory effort. Not surprisingly, this agency absorbed the lesson of four decades of deregulatory thinking quite well, as evidenced by the “sex for leases” scandal a few years back. See Grassley’s letter to Salazar seeking accountability from the agency (May 17, 2010). A similar letter to Halliburton seeks information on the cement and the regulatory oversight of its use. See Grassley letter to Halliburton, May 17, 2010.