Legislation & Politics

Letter to Representatives to Close Tax Loopholes for Oil/Gas Corporations

January 18, 2007

Dear Representative:

I am writing on behalf of the 1.4 million members of the American Federation of State, County, and Municipal Employees (AFSCME), to urge you to vote to support the "CLEAN Energy Act of 2007" (H.R. 6).  AFSCME strongly supports H.R. 6 because it would close unneeded tax loopholes for oil companies, reform royalty relief on outdated oil and gas leases, and repeal or rollback several unnecessary tax breaks and royalty relief enacted in the 2005 Energy Bill.  Furthermore, AFSCME supports H.R. 6's investments in clean, renewable energy resources, energy efficiency, new technologies, and energy conservation.

AFSCME supports H.R. 6's plan to recapture a total $14 billion by reducing or repealing these unnecessary subsidies.  Quite simply, given the recent record breaking profits of the energy industry, the federal government should not continue subsidizing large profitable oil and gas companies.  For example, in 2005 ExxonMobil reported profits of $36 billion.  At the same time ConocoPhillips reported 2005 profits of $13.5 billion, the domestic manufacturing tax loophole gave ConocoPhillips $106 million.  This illustrates there is no need for a tax incentive and demonstrates that Congress should close the $7.6 billion tax loophole that allows oil companies to receive a tax break designed for domestic manufacturers.

Similarly, the Interior Department's failure to include "price thresholds" in its 1998-1999 Gulf of Mexico oil and gas leases could cost the federal government up to $10 billion and thereby further increase the oil and gas industry's profits.  H.R. 6 would recapture $4.35 billion on these leases and $1.75 billion on other Gulf of Mexico leases. 

As America promotes energy efficiency and consumes less energy, all Americans should benefit through reduced costs and a cleaner environment.  America's energy policy should be aligned with these goals.  AFSCME opposes continuing unnecessary tax breaks and royalty relief for oil and gas companies and supports investing in renewable energy resources and clean and energy efficient options. 

We urge you to vote "yes" on H.R. 6.

Sincerely,

Charles M. Loveless
Director of Legislation

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