By Tom Rodgers, KERA 90.1 Guest Commentator
http://stream.publicbroadcasting.net/production/mp3/kera/local-kera-491208.mp3
Commentary: Windfall Tax Rebuttal
Dallas, TX –
I take issue with Sterling Burnett's commentary against windfall-profit taxes on large global oil companies. Indeed, these companies have benefited from an unprecedented windfall, the "perfect storm" of two major hurricanes, persistent Iraqi insurgency and booming worldwide demand. The top five companies profited $30 billion in only one quarter of 2005.
I'm a free-market capitalist, so I don't think there's anything conspiratorial or wrong with these profits. But I believe big oil companies should pay their fair share of taxes just like the rest of us, especially since they benefit so much from the global security provided by our armed forces. As a former engineering consultant to drilling and exploration companies in Texas, I've come to admire the creative work of these talented professionals. Exploration technology has evolved in recent decades to find oil and gas in the most unlikely places. But even optimistic energy analysts admit that world demand is rapidly outpacing supply. Some believe the peak on world energy production is happening right now, Thanksgiving 2005. From now on, demand will accelerate faster than supply, no matter how clever we are.
The bipartisan Senate proposal levied no additional tax on oil companies, it merely balanced the accounting on incredible deductions and credits they enjoyed for decades, incentives the oil companies have said they no longer need. And the bill was limited to only the top five companies without regard to nationality, so foreign giants like British Petroleum and Royal Dutch Shell would also pay up. The independent, high-risk producers and there are many of these in Texas would remain unaffected. No other form of research and development has such lucrative tax incentives as oil and gas exploration. The actual tax bill for the major oil companies was only 13.3 percent of their profits from 2001 to 2003. Imagine if regular citizens like us paid taxes of only 13 percent on our money leftover after expenses each month!
The so-called windfall profits proposal was earmarked for immediate rebate to the American taxpayer, offsetting high gas prices and stimulating the economy across the board. Perhaps some of it would be better invested to develop non-petroleum sources. By the end of this century, there won't be much oil or gas left to burn; we may even run out by 2050. Our only alternative is to move to an economy based on something else: hydrogen, nuclear fusion, or in the realm of possible physics like antimatter. Remember that atomic energy and the internet, both pioneered right here in the USA, were considered wild science-fiction a century ago.
If we invested only five percent of the cost of petroleum exploration to develop other forms of energy, we could likely achieve an energy breakthrough in a few decades. No more reliance on foreign oil or any kind of oil for that matter. Cleaner air, purer water, and less conflict with extremists in the Middle East. We are the nation that moved from steam to electricity. We invented the oil business. Why not become the nation to lead humanity beyond it?
Tom Rodgers is a technology consultant and writer living in Arlington.
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