July 03, 2010 04:53 PM UTC

Tax-funded Spills and Shills

• 5 Comments
• by: ClubTwitty

The American Petroleum Institute–which prefers to go by its acronym, API–is launching a major ad blitz targeting swing states, including Colorado, to hang onto billions in taxpayer largess that benefits this uber-wealthy industry.

A powerful oil industry trade group is launching a broad new ad campaign to prevent legislation that ends billions of dollars worth of tax breaks from gaining political traction.

The American Petroleum Institute will run television ads in 10 states – including several swing states – beginning July 6 that allege the plans would harm the economy and cost jobs.

President Barack Obama and several Democrats have floated plans to end various incentives, such as write-offs for drilling costs and the industry’s ability to claim a lucrative manufacturing tax break.

But the ads will make the case against the measures by showing ” ‘working Americans’ responses to the potential for new taxes on the oil and natural gas industry,” API said Friday. They will run in Colorado, Michigan, North Carolina, North Dakota, Pennsylvania, Virginia, Maine, Missouri, Ohio and West Virginia.

And what do we get for the billions in taxpayer subsidies to this well-heeled industry?  Lax regulations, gaspatch mishaps, and political interference.  

News surfaced this week that notorious oil major BP dumped major cash into 2008’s failed ballot measure in Colorado to bring the industry’s tax rates in line with neighboring states, in spite of it’s corporate ‘ethics’ that prohibit political contributions.  

BP, the global energy corporation whose massive oil spill is fouling huge swaths of the Gulf of Mexico, proclaims in its corporate code of conduct that it will “make no  political contributions, whether in cash or in kind, anywhere in the world.”

But BP North America — the energy giant’s U.S. subsidiary — has donated at least $4.8 million in corporate contributions over the past seven years to political groups, partisan organizations and campaigns for federal and state elections, an analysis of campaign and tax records shows.

Its most generous corporate contributions — totaling about $4 million — have gone to two Republican-aligned political action groups working to defeat state ballot initiatives in California and Colorado that could have raised oil and gas industry taxes, according to an analysis of state campaign reports by the Center for Political Accountability.

Also this week we learned of the widespread regularity of spills in Colorado’s gaspatch. It’s impossible to know how many spills actually are occurring, since many–perhaps most–go unreported by the industry, while the state agency tasked with monitoring the industry is unable to properly do it’s job.  

In spite of such negligence, and even malfeasance, the oil and gas industry is pushing to rollback certain provisions of Colorado’s recently enacted regulations, such as the requirement that pit liners be removed and disposed of like other toxic waste.  

The state’s oil and gas industry has been agitating hard for changes to pit liner regulations adopted as part of the state’s amended rulemaking in the spring of 2009. They want to be able to dispose of the liners on-site of drilling operations. Companies like Williams – the biggest producer of natural gas on the Western Slope – support those changes despite success they’ve had with recycling the dense plastic liners.

But a quick search of the COGCC site by the Colorado Independent shows a Williams’ pit liner leak violation earlier this month. “Holes in the pit lining exposed the ground below the lining. Pit has no system of monitoring and maintaining freeboard,” reads the COGCC complaint.

And the COGCC, charged with regulating all of these spills, essentially admits to a backlog of enforcement actions at a time when there is increasing pressure around the nation to step up enforcement of oil and gas industry drilling practices in the wake of the ongoing Deepwater Horizon spill.

Indications suggest that the Colorado Oil and Gas Conservation Commission is seriously considering this request. And Colorado’s gubernatorial candidates seem willing to abet attempts to weaken the rules, even those protecting our most cherished shared resource–water.

The key political battlefield in this little-noticed but big-impact fight is Colorado, which holds one of the country’s largest oil and natural gas reserves. In the state’s 2010 gubernatorial campaign, former Rep. Scott McInnis (R) and Denver Mayor John Hickenlooper (D) have turned the race into a competition to see who is more enthusiastic about shredding the minimal energy regulations already on the state’s books.

Drilling for oil and gas is a dangerous, impactful activity.  When everything goes right, the landscape is scarred, critical wildlife habitat is carved apart, truck traffic is increased dramatically, and air quality suffers.  When things go wrong, spills pollute streams, water wells are poisoned, wells explode into flames, and wildlife is killed.

There are a number of sensible and fair reforms–at both the state and federal levels–that can, and should, be enacted now.

1) Keep oil and gas drilling out of special places–like wilderness-quality lands and roadless national forests.

2) Strengthen Colorado’s regulations, including the right of affected citizens to be heard in front of the COGCC in challenging drilling permits.

3) Eliminate the use of ‘categorical exclusions’ in permitting wells and development.

4) Pass the FRAC Act.

5) End taxpayer subsidies that hide the true cost of this activity.

Corporations exist to earn profit–something successful corporations are good at, by hook or by crook.

Governments should exist to protect the public’s interest–this means ensuring that our shared resources–like water, land, air–are protected and that public health and safety is top priority. If companies refuse to abide by such standards they should not be allowed to do business.

The true cost of this activity must be reflected in the price of the commodity.  Candidates for public office should stand up for the communities and citizens impacted by this activity, not kowtow to one of the world’s richest and  most powerful industries.