All That Meat and No Potatoes…
Shocking, I know, but Exxon Mobil and Chevron, et al, don’t want to alter their profit streams, asking to be able to continue sending bomb trains throughout the country. The reason? Updating the safety equipment would cost money. What a compelling argument, worthy of a 6th grade debate team.
The American Petroleum Institute, the industry’s main trade group, petitioned the United States Court of Appeals for the District of Columbia Circuit to block key provisions of the rules, which were unveiled this month by Anthony Foxx, the transportation secretary. The petition was filed on Monday.
The trade group, which represents companies like Exxon Mobil and Chevron, has long argued that forcing oil producers and shippers to use newer tank cars and replace older models would impose high costs on the industry and lead to a shortfall in tank car capacity.
The petition seeks to block a requirement that older tank cars be retrofitted with new safety features designed to prevent them from spilling oil or rupturing in a derailment. It also challenges a requirement that tank cars be equipped with new electronic braking systems or face operational restrictions.
(click here to continue reading Oil Industry Asks Court to Block Rail Transport Safety Rules – NYTimes.com.)
If Exxon Mobil were forced to spend $100,000,000 updating the bomb cars, ((a number I just pulled out of the air, and probably a lot more than they would actually pay)) would it be a large enough number to reduce their annual profits measurably? In 2014 alone, ExxonMobil reported revenue of $394,105,000,000. Chevron’s reported revenue for 2014 was $211,970, 000,000 by the way. I would hazard a guess their accountants are top notch, and most of the costs of updating bomb trains would be written off as operating expense, right? The oil industry has been making immense, unimaginable profits for decades, or more.
In other words, protesting that updating the rail cars so that they don’t blow up communities and cause fires that last for weeks because updating the rail cars would cost too much is a lame argument. Cries pleading poverty from corporations as wealthy as Chevron is laughable.
Love Is Letting Go
Not that the Transportation Department and Barack Obama will listen to me, but my negotiation points would include the tax subsidies the oil and gas industry currently enjoy: fix the bomb trains and you get to keep half of your tax subsidies.
The oil industry’s lobbyists like to argue that its array of tax write-offs (which allow companies to deduct everything from drilling costs to the declining value of their wells) aren’t any different than other deductions for less publicly reviled companies. Cutting them will discourage new exploration and put jobs at risk, they claim.
Yet, some of the breaks are anachronisms that date back almost to the days of John D. Rockefeller. And in a world of permanently high crude prices, there’s very little rationale for subsidizing the bottom lines of companies like ExxonMobil and BP.
Make no mistake, either: Those profits are perfectly healthy. Between drilling and refining, Exxon’s U.S. operations alone earned $7.5 billion after taxes in 2012. California-based Occidental Petroleum Corporation, one of the so-called “independent” oil companies and the top oil driller in Texas, raked in $7.1 billion via its oil and gas division.
(click here to continue reading America’s Most Obvious Tax Reform Idea: Kill the Oil and Gas Subsidies – The Atlantic.)