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Clean Energy Works Memo

Source:http://www.politico.com/blogs/bensmith/0710/Climate_groups_to_target_Big_Oil_Welfare_Tax.html

COMMUNICATIONS MEMORANDUM

TO: CEW GroupsFR: David Di Martino, CEW Communications

RE: The Big Oil Welfare Tax

DA: July 9, 2010

The coming weeks will be very important for supporters of comprehensive cleanenergy and climate legislation. The opposition, in the form of API and BigOil lobbyists in Washington, are spending millions on smear campaigns andcalling on their cronies in the Senate to do everything they can to continueAmericas dependence on oil and prevent a new policy that moves us away from

oil and toward a clean energy economy.

The other side is on message and determined to defeat a new energy policywith the tired old false attack that climate and energy legislation is anational energy tax. What they dont want anyone to know is that the

American people already have a national energy tax The Big Oil Welfare Tax- in the form of billions of dollars in subsidies to the wildly profitablebig oil companies. Thats right; American taxpayers SUBSIDIZE an industry

that earns hundreds of millions of dollars in profits each quarter, and turnsaround and charges $3, $4 even $5 for a gallon of its subsidized gasoline.

CEW is planning to launch a targeted grassroots and media campaign to attackBig Oil for profiting from the Big Oil Welfare Tax and highlight their

hypocrisy for calling investments in new technology and renewable sources ofenergy an energy tax. We will target activities in the same states where

APIs smear campaign ads are running. We will engage real people to call for

action on clean energy and climate and to demand that API and Big Oil stopthe smear campaign and get to work on solutions for Americas energy future.

We will distribute a tactical campaign plan in the coming days but in themean time we are providing (below) message guidance on the Big Oil WelfareTax. Please use this line of attack to fend off criticisms of climate andenergy legislation as a tax and use it to put opponents of clean energy andclimate legislation on their heels defending taxpayer subsidies to Big Oil defending the Big Oil Welfare Tax.

By The Numbers: The Big Oil Welfare TAX

As Big Oil and their lobbyists work overtime to prevent being heldaccountable for their actions and a change in our nations energy policy,

polluters benefit from generous energy tax provisions that effectively raisetaxes on average Americans. These provisions subsidize the oil industry with$4 billion in tax breaks and loopholes every year.

Big Oil companies make record profits each year yet still benefit from thisBig Oil Welfare Tax Breaks that costs Americans dearly in both tax revenue

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and continued dependence on oil.

The Republican Leadership in Congress opposes a new clean energy and climatepolicy that will reduce our dependence on oil, create jobs, enhance ournational security and protect our environment. They apologize to BP, protectbig polluters, and want to preserve the big oil welfare tax policy thatsupports oil companies that already make a killing.

Here are the tax provisions that constitute the Big Oil Welfare Tax onAmericans:

$4 Billion Energy Tax Benefits Big Oil Every Year: A $4 Billion Self-AdmittedWelfare TAX subsidies to the Oil Industry. Oil industry officials say that

the tax breaks, which average about $4 billion a year according to variousgovernment reports, are a bargain for taxpayers. [New York Times, 7/6/10]

16 Percent Tax Break: Big Oils Overall Tax Rate Is 9 Percent 16 PercentLOWER Than The Overall Business Tax Rate. According to the most recent study

by the Congressional Budget Office, released in 2005, special treatment forcapital investments like oil field leases and drilling equipment mean that

oil companies are taxed at an effective rate of 9 percent, significantlylower than the overall rate of 25 percent for businesses in general and lowerthan virtually any other industry. [New York Times, 7/6/10]

$1.8 Billion In Tax Loopholes: Transocean Has Saved $1.8 Billion WithOffshore Tax Loopholes. Transocean which has approximately 18,000employees worldwide, including 1,300 in Houston and about a dozen in Zug,Switzerland has saved $1.8 billion in taxes since moving overseas in 1999,the study found. [New York Times,7/6/10]

$2.6 Billion In Additional Tax Breaks: Bush Pushed Through $2.6 Billion InTaxpayer Giveaways To Big Oil. Despite the public anger at the gulf spill,

it is far from certain that Congress will eliminate the tax breaks. Asrecently as 2005, when windfall profits for energy companies prompted evenPresident George W. Bush a former Texas oilman himself to publicly callfor an end to incentives, the energy bill he and Congress enacted stillincluded $2.6 billion in oil subsidies. In 2007, after Democrats took controlof Congress, a move to end the tax breaks failed. [New York Times, 7/6/10]

$340 Million To Protect Tax Loopholes: Since 2008, Big Oil Has Spent $340Million In Federal Lobbying Fees. Since 2008, the oil and gas industry hasspent $340 million on federal lobbying fees. [New York Times, 7/6/10]

$18.6 Million For The Grand Oil Party: Senate Republicans Have Accepted AtLeast $18.6 Million From Big Oil. Since 1989, members of the SenateRepublican Caucus for the 111th Congress have accepted at least $18,690,814from the oil and gas industry. [Center for Responsive Politics, 6/4/10; CQ

MoneyLine, 6/7/10]