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I would love to know everything about oil subsidies in America. Maybe not because I think they’re the most exciting thing in the world (although they account for billions and billions of dollars), but because I like to know things. As such, some people call me the KGB. I am indeed not Russian, but I am curious. Although I am learning that it’s much more productive to satiate my curiosity with journalistic findings rather than interrogating my loved ones – what can I say, I’m a slow learning. So today, we’re delving into: the oil subsidy!
First things first: what is a government subsidy? Simply put, a subsidy is a stipend or some financial assistance the government gives to an industry to prevent its decline. There are many different kinds to accomplish different things, but that’s the general idea.
Keeping that in mind, it doesn’t necessarily make sense that oil companies (or Big Oil, as some call them) receive billions of dollars every year in government subsidies. Especially when you take into consideration that Exxon Mobil set the record for highest profits earned by a US company EVER in 2008 to the tune of a cool $45.2 billion.
Granted, Exxon and others have seen decreased earnings in the past year due to fewer Americans on the roadways, but overall, they seem to be sitting pretty.
But they might not be able to rely on their government help for very long.
President Obama recently announced his 2011 budget and it’s not business as usual for Big Oil (unless you’re Michael Scott from The Office, and then you have absolutely no idea what that means anyways, so your opinion probably doesn’t matter anyways). He cut out a bunch of subsidies for fossil fuels (hopefully putting about $36 billion in America’s piggy bank in the next few years) and put in around $6 billion in green energy development.
Here is a good overview of these budget plans from solveclimate.com. This article brings up a good point – will these proposals make it through the legislative branch? Similar moves have been shot down by Congress and there hasn’t been a lot of compromising there lately. Conservatives have already started launching commercial attacks against Democrats in preparation for election year. Will both parties reach across the aisle and agree to work for the people they represent when looking at the budget?
Time will tell.