Eric Massa released his new energy plan at the grand opening of his Corning office yesterday evening. The plan [pdf] includes a windfall profit tax on oil companies, with the proceeds going to fund American-made hybrid cars; renewable energy through switchgrass ethanol; raising CAFE standards; no drilling in ANWR, and states making the final decision on offshore oil drilling
Massa's plan and office opening were covered by WETM in Elmira and Syracuse's News 10.
Update: Reader Elmer sends today's Corning Leader page [pdf] with pictures from the grand opening.
Comments
Massa's energy plan makes good common and political sense. It's a start at educating people about the fallacy of more oil leases and drilling in ANWR affecting fuel prices. Sorting out the details and getting any of it enacted would be a huge task. The FISA "compromise" is a recent example of how reason and honest debate can be beaten back in congress by big contributers.
The American-made part of the hybrid subsidy proposal seems to be aimed at his AFL-CIO support, but of course, the Japanese automakers are building a lot of cars in the US, with non-union labor. But I don't see why he didn't include electric vehicles. Honda is about to offer a fuel cell car in California and Iceland is going hydrogen fuel cell, so electric vehicles are about to become competitive. Electric cars are far more efficient and less polluting than hybrids. Unlike oil, we can produce hydrogen at home using sustainable, relatively low carbon-emitting energy sources. Getting away from gasoline would improve our economy and national security tremendously.
I hope that Eric isn't talking about taxpayers subsidizing R&D by GM, Chrysler and Ford. To them R&D = PR. Giving a tax credit or a grant to buyers of American-made pluggable hybrids and electric cars would be effective politically and economically.
Again, the excess profits angle is a red herring. Absent price controls, it would take years of study, negotiation and litigation to settle on what excess profits are. It would take only months to fill loopholes and remove invisible subsidies to oil companies, if the will to do it were there. That would amount to a sound structural change rather than a non-stick band-aid.
I agree that the plan is a good one, as far as it goes, except for the excess profits pander. You're right that closing loopholes is a better solution.
I'd like to see Obama and Massa go a little farther, starting with a nuclear initiative, and as you point out, electric cars and/or plug hybrids. For example, programs to give tax breaks for employers who provide solar power stations at places of work for charging electric cars during the day. Also, mass transit - lots more of it - even in semi-rural areas, and certainly in Monroe County.
I also agree that any hybrid subsidy has to be on the buy side, not the sell side, because US car manufacturers have a terrible R&D track record.
You will have to go a long way to convince me that ANWR, while it isn't a silver bullet, won't help keep us in oil until other energy programs are fully developed. As far as I am concerned, the opposition to ANWR is just bowing at the altar of political correctness and environmentalists, similar to the way we bowed in the 70s concerning nuclear power.
I've covered this in a couple of posts, you can see one here:
http://www.fighting29th.com/2008/06/kuhls-questionable-facts.html
that ANWR at peak flow will provide 2-4% of our daily need for oil. We import more than 50% of our oil supply. So, the math just doesn't work. ANWR won't "keep us in oil". That's from Reuters, not the DailyKos, btw. It's just the facts.
I personally don't care about drilling in ANWR, because it won't matter, not because I'm politically correct or hug trees. I really don't give a rat's ass whether Massa wants to drill there. Even if experts are off and there's twice as much oil in ANWR and we can double the flow from there, we're at 4-8% of our domestic consumption. That's not a game-changer.
The game-changer would be an effort to cut our domestic oil consumption by 50%. That's a daunting prospect, but imagine what we could get if we invested the kind of money we've been pissing away in Iraq. It would mean getting the Northeast off of heating oil, hybrid and electric cars, a massive program to build new nuclear plants here, solar farms in the sunny states, and wind where it's windy.
If we did that, we would truly be a superpower. The developing countries are rapidly increasing their consumption of oil. If we could opt out of that competition, we'd lead the world in energy technology and increase our security in one fell swoop.
As I have stated here in the past, I feel it will take a long time before the political will is developed in order to bring everything online that we need (we haven't had the political will to build a nuclear plant in 30 years or so).
In the meantime, I still support drilling in ANWR (I did mention it wasn't a silver bullet) and offshore. It can't hurt.
Some interesting report here:
http://www.propublica.org/topic/energy/
They also have good stuff on the home page about our Arab news channel boondoggle.
"Big oil controls the elections of the people who pass the laws. And that's why we're seeing hundreds of billions of dollars in profits to companies that aren't even paying taxes on those profits, all the while we're paying $4.30 for gasoline. The time is now to stop that,” said Massa.
Exxon paid $29 million in income taxes in FY'07. http://www.exxonmobil.com/corporate/files/news_pub_fo_2007.pdf
Should it have paid more? Maybe, but that's another discussion. The point is, people running for office need to be straight, and not play loose with the facts.
You're both technically correct. What he said was technically correct -- billions of the dollars that Exxon made are not being taxed. You are technically correct that some tax was paid.
But, let's look at some facts.
Exxon made $10.25 billion last year, and $11.7 billion last quarter. (In other words, they're on track to book over $40 billion in profits in FY08.)
http://money.cnn.com/2008/02/01/news/companies/exxon_earnings/
$29 million is .28% (roughly one-quarter of one percent) of Exxon's FY07 profit. In other words, Exxon only paid what a reasonable person can call "tax" on some small fraction of its profits. When I think of tax, I think of some whole number percentage of someone's earnings.
In the article linked by vdomeras above your comment, there's a discussion of the super-favorable leasing rights that were granted oil companies in the 90's. Aside from the almost-nonexistent taxes Exxon paid, they are also recipients of other government benefits.
The net of this discussion is that oil companies are heavily subsidized by the government. I don't like the term "windfall profit tax". How about just "tax at some reasonable rate", and no more sweetheart deals.
What's a reasonable rate? 10%,50%, 90%? I agree that they shouldn't get any sweetheart deals, but let's not demonize the oil companies. Let's bring them into the discussion on how to solve our energy problems. If they directed 10% of their profits into renewable energy research, that would be a start.
"Bring them into the discussion..."
The point is that they control the discussion. Cheney let them write the energy bill. Massa is right that they pay politicians to make the laws their way. If you mean that they could be part of the solution, of course they could.
However, they are in business to sell oil products. They don't have to be demonized. But they are leading us in the wrong direction.
The top marginal rate in the US is 39%. Judging from the Exxon example, the effective rate is a tiny fraction of that. I'd be happy to get half of that from Exxon, and if half of that 20% went into real renewable energy research, that's fine. But the gov't needs to be in charge of that research, not the oil companies.
http://www.taxfoundation.org/blog/show/1471.html
I agree with vdomeras that there's no need to demonize oil companies. They are out to maximize return for their shareholders, which is as it should be.