Crossposted from Hillbilly Report.
The Oil and Gas Companies definately get the best of both worlds, unlike the American taxpayer. While extracting natural resources from public lands that are owned by all of us, they also get to take us for a ride in more ways than just gouging prices. An ideas piece by Nick Rahall, the Chairman of the House Committee on Natural Resources has spelled out some of this welfare given to Corporations that posted record profits on the backs of the American consumer in the last several years.
In calling for royalty reform, Rahall has spelled out exactly how Big Oil and Energy not only gets preferential treatment, but fleeces the American taxpayer right along with the American consumer:
Every year, American taxpayers are required to file tax returns, and many receive a refund for overpayment during the previous year. While those taxpayers may feel fortunate to receive the unexpected cash, the government is not required to include accrued interest in that refund. Unfortunately, oil and gas companies are faring much better than our hardworking, taxpaying American families.
Thanks to a provision in industry-friendly legislation enacted in 1996, companies that have overpaid the government for the extraction of oil and gas from federal lands and waters are able to get their cash back with interest attached.
This is just one example of an oil and gas royalty system that has become tilted too far in favor of industry and away from ensuring that the American people get a fair return for the extraction of these public energy resources.
http://www.politico.com/news/s…
Unfortunately, this is not the only way that rich and powerful corporations recieve welfare and preferential treatment and compared to all of us:
In general, the 1996 law gives oil and gas companies the sort of leeway that individual taxpayers would love to have.
Take deductions, for example. On a personal tax return, a taxpayer is liable for all sorts of civil and criminal penalties if he claims a false deduction. But oil and gas companies are under no similar obligation to make sure their deductions are legitimate. Instead, it is up to the government to do that for them. In one 2007 report, an MMS manager explained that “companies paid what they thought they owed MMS, and it was up to MMS to review their payment for accuracy and contact the company if MMS disagreed with the amount.”
Equally disturbing, oil and gas companies have plenty of time – six years – to make changes to their royalty payments. That’s right: A company has six years to make adjustments to what it paid, although a GAO examination of data from 2002 to 2007 found 81,000 adjustments that were made after that six-year window. And even if the companies are caught in error, they have a free pass from MMS to make those corrections, without penalty.
Imagine if the Internal Revenue Service operated in the same manner. The opportunities for fraud would be overwhelming.
Indeed. Just imagine if all of us got to pay what “we thought we owed” and faced no criminal penalties or even an audit for filing false deductions or not reporting income. We would all be getting huge refunds!!
Even more disturbing is that these rules depend on Corporate greed-meisters to “do the right thing” in regards to resources, OUR resources extracted from public lands:
This is not to say that all companies take advantage of these opportunities – the vast majority of them, undoubtedly, do not. But, as the inspector general reported earlier this year, “The existing process is heavily reliant upon companies doing the right thing.” And if they do not, millions of dollars that should come into the Treasury can easily slip through the fingers of the royalties system.
Now, after the last several years it should be pretty obvious that these companies are not going to “do the right thing”. Think of the prices of gasoline at the pumps the last few years and how Americans have been gouged. Even now, oil has dropped to $59 a barrell and we only see a few pennies difference at the pump. Of course, with it being summer, Big Oil has yet another excuse to gouge American consumers with unfair pricing.
This current system was put in place in 1982 and updated in 1996 to be a big corporate welfare boon to Big Oil:
This situation is unacceptable. The federal royalty collection system was first put into place in 1982 and then updated to make it more favorable to industry in 1996.
Chairman Rahall goes on to detail a few ideas that would make this system more fair for the American taxpayer, who seemingly get to pay the Oil Companies interest for extracting OUR resources off OUR land:
Given the huge profits we have witnessed in recent years, it simply does not take into account how oil and gas companies operate nowadays.
There should be more emphasis on automated data transmission from oil wells directly to the government, so that MMS will have an independent check on what companies are reporting – similar to the W-2 forms the IRS gets from employers.
Companies should also be required to make sure that they are filing their royalties correctly, and there should be more stringent penalties if they attempt to cheat the system. And there certainly should be no interest paid back when companies overpay their royalties.
The American people, who own title to each and every acre of the federal lands from which these public resources are extracted, deserve nothing less than their fair share.
Well, at least now we know why Big Oil and the Republicans have been drooling at the mouth for years to “drill here, drill now” in such pristine public lands like ANWR. This serves as a double whammy for Republicans and the greedy oil companies. Not only would they be allowed to rape the lanscape and the environment, but they would get to do what they do best. Rape the American taxpayer and consumer.
We all need to join Chairman Rahall in calling for Royalty Reform and new policies that put the Oil and Gas companies on even par with the American people. In essence we are paying several times for resources that belong to us in the first place.
What a sweet deal for Big Oil!!