U.S. Government Accounting Office Report Shows Oil Industry Tax Breaks Dwarf Ethanol Incentive

According to a new General Accounting Office report released by U.S. Senator Tom Harkin of Iowa, the petroleum industry has received over $150 billion in tax breaks in just the past 32 years alone. The report documents that the petroleum industry received $82 billion in percentage depletion deductions, $42.9 billion through expensing of exploration and development costs, and $8.4 billion in tax credits for production of nonconventional fuels. In fact, just the three largest tax breaks to the petroleum industry amount to over 10 times the ethanol tax incentive. "What have all of these tax breaks gotten us? We are now more reliant on foreign oil than ever before," Harkin said.

The report underestimates the total bill to U.S. taxpayers calculating oil industry tax breaks from 1968 only while subsidies have been provided to the industry since the 1900s. The U.S. General Accounting Office also did not factor in the cost of the foreign investment tax credit, which is estimated to cost the Treasury $7 billion annually. Meanwhile tax incentives provided for ethanol (which are utilized by the oil industry and gasoline marketers), have amounted to approximately $11 billion since 1979.

"We are at a crossroads," Harkin said. "We can continue down the path of special favors and tax breaks for the petroleum industry. Or we can choose to build a future of energy security, based on domestic renewable energy sources."

Oil Industry vs. Ethanol Tax Incentives Summed Over Years Adjusted to 2000 dollars ( in Million Dollars)

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