The Oil and Gas sector is heavily subsidized in both Canada and the United States. It has been for years. But many people don’t know how much. This is the case even though their profits are enormous.
I started paying attention to this issue during the Obama administration. At that time, Exxon was the world’s biggest oil company and perhaps the world’s biggest company, and also had the world’s largest profits ever in one year. President Obama, pointed out at the time that Exxon earned $4.7 million profit every hour! He said that the 3 largest oil companies made combined profits in 2011 of $80 billion or $200 million every day.
What was even more astounding was that such large companies, with such huge profits, were subsidized by taxpayers. They were on the public dole! That meant average taxpayers contributed extra subsidies to those corporate giants. Many of those subsidies were paid through tax breaks. These were tax breaks that ordinary citizens and ordinary small businesses did not enjoy. According to President Obama, those subsidies amounted to 4 billion annually in the United States. A staggering amount considering who the recipients were, namely huge and already profitable corporations.
In 2012 US President Obama tried to eliminate those subsidies. Shockingly, to me at least, the Senate Republicans blocked the measures to eliminate those tax breaks. President Obama in arguing for the bill made a simple comment that is hard to deny. “With record profits and rising production, I’m not worried about the big oil companies,” Obama said, “… I think it’s time they got by without more help from taxpayers, who are having a tough enough time paying their bills and filling up their tanks.” Yet such simple logic was beyond the ken and understanding of conservative politicians.
When oil companies argue against reducing the subsidies that they have come to cherish their “best” argument is that these subsidies are less than that enjoyed by other huge corporations. Wow. Some get even more! This is nuts!
What is really strange—hallucinogenically strange—is that those subsidies continued right through the recession when both the American and Canadian governments claimed to be so lacking in money, they had to make all kinds of cuts. Meanwhile these subsidies seriously exacerbated the most serious environmental problem of our time—climate change. Ordinary people were paying to make things worse!
Ever since the financial crisis of 2008 we have been in and out of recession. Some think we never really got out of it. A lack of cash made it difficult to consider expensive projects. Projects like doing something about climate change. Yet we can afford even less to do nothing. Inaction is much more expensive than action.
Carbon emissions have continued to rise during the recession, though admittedly not as high as they would have risen had economic conditions been better. As Damian Carrington said on his environmental blog,
“The house is ablaze and we are throwing bucket after bucket at it—buckets of petrol. Worse if that is possible, the world’s politicians are not stepping in to stop us stoking the flames: instead they are helping us to pay for the petrol.”
In other words carbon emissions have risen during tough economic times because governments have dragged their feet on the necessary actions and then have made matters worse—much worse—by subsidizing fossil fuels the primary culprit behind climate change. These are truly weird times.
Despite clear warnings from the scientific community for a number of years, our political leaders have done nothing to halt the emission of greenhouse gases so those emissions have been rising by record amounts. This is beginning to look more and more like the people of Easter Island who kept cutting their trees down on their island until they were all gone. I always wondered who was the person on Easter Island who cut down the last tree and how did he think that made sense? Sometimes we are just plain stupid. And as I have said often about myself, making it a fundamental principle of mine, ‘life is hard when you’re stupid.’
Scientists have for a long time pointed out that any average temperature rise beyond 2° C would not be safe. “Safe” perhaps is not the best word. Average temperature rises of 2° C would be serious. Some say disastrous. The International Energy Agency (IEA) has predicted a temperature rise of 3.5 °C based on current policies. Some agencies have predicted even greater rises. That means we will soon enter a world of mass migrations and severe water shortages. In such a world, England would have the temperature of Morocco today. Manitoba would be about like Kansas.
Another possibility though is that average temperatures will rise even more to 6 °C. According to Carrington, “That’s Armageddon: large parts of the planet uninhabitable and the risk of runaway warming threatening the rest.”
I am not minimizing what all of us individuals have to do. We too have to get serious about climate change. We have to change the way we live. But the role of governments is also of critical importance. The current inaction by our political leaders is a disgrace.
The IEA has said the role of government is “critical.” Yet governments like our own stand still. During the Harper regime in Canada he said, he would not inflict the costs of action on our country. Yet according to the IEA “delaying action is a false economy.” According to the IEA if we save $1 now by doing nothing we will pay $4.30 later to make up for it.” That certainly would be a misleading “saving.”