The US subsidizes oil by having a low overall corporate tax and royalties from the business. In total, those two elements above combined equals about 40% of of the company’s total revenue, which compares to the 60-65% other countries charge. There is also a long list of services the US government has propped up the industry with such as:
-Construction bonds at low interest rates or tax-free
-Research-and-development programs at low or no cost
-Assuming the legal risks of exploration and development in a company’s stead
-Below-cost loans with lenient repayment conditions
-Income tax breaks, especially featuring obscure provisions in tax laws designed to receive little congressional oversight when they expire
-Sales tax breaks – taxes on petroleum products are lower than average sales tax rates for other goods
-Giving money to international financial institutions (the U.S. has given tens of billions of dollars to the World Bank and U.S. Export-Import Bank to encourage oil production internationally, according to Friends of the Earth)
-The U.S. Strategic Petroleum Reserve
-Allowing the industry to pollute – what would oil cost if the industry had to pay to protect its shipments, and clean up its spills? If the environmental impact of burning petroleum were considered a cost? Or if it were held responsible for the particulate matter in people’s lungs, in liability similar to that being asserted in the tobacco industry?
All of these things contribute to how oil got big.
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