When the Deepwater Horizon drilling platform set off the worst oil spill at sea in American history, it was flying the flag of the Marshall Islands. Registering there allowed the rig’s owner to significantly reduce its American taxes.
The owner, Transocean, moved its corporate headquarters from Houston to the Cayman Islands in 1999 and then to Switzerland in 2008, maneuvers that also helped it avoid taxes.
At the same time, BP was reaping sizable tax benefits from leasing the rig. According to a letter sent in June to the Senate Finance Committee, the company used a tax break for the oil industry to write off 70 percent of the rent for Deepwater Horizon — a deduction of more than $225,000 a day since the lease began.What the article doesn't reveal is why these subsidies continue in the face of the manifest greed and ecological suicide it represents. In his book, Endgame, Volume I: The Problem of Civilization, Derrick Jensen tells us why.
With federal officials now considering a new tax on petroleum production to pay for the cleanup, the industry is fighting the measure, warning that it will lead to job losses and higher gasoline prices, as well as an increased dependence on foreign oil.
But an examination of the American tax code indicates that oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process.
According to the most recent study by the Congressional Budget Office, released in 2005, capital investments like oil field leases and drilling equipment are taxed at an effective rate of 9 percent, significantly lower than the overall rate of 25 percent for businesses in general and lower than virtually any other industry.
And for many small and midsize oil companies, the tax on capital investments is so low that it is more than eliminated by various credits. These companies’ returns on those investments are often higher after taxes than before.
The United States economy is dependent on oil from the Middle East, South America, and around the world. American lives are dependent on it: the agricultural infrastructure - from gasoline to pesticides - rests on the foundation of oil and natural gas. It's not too much to say that we eat refined and transformed oil. (p. 104)This is a problem for many reasons, not the least of which is that oil is a nonrenewable resource that is becoming rapidly depleted. Hence, the attempts to extract it with high-risk methods from difficult-to-reach sources - such as deep sea drilling in the Gulf of Mexico.
Discovery of oil and gas peaked in the 1960s, and the situation has deteriorated enough that by now the world consumes more than three times as much oil each year as is discovered. Do you think the oil industry is aware of oil field depletion? Of course. Its their business. Why do you think no new supertankers have been built for twenty years? A report written for oil industry insiders and priced at $32,000 per copy concludes that world oil production and supply peaked in 2000, and will decline to half by 2025. The report predicts large and permanent increases in oil prices for the very near future. (p. 111)The government subsidizes the oil industry directly through tax policies and indirectly through its military presence in the Persian Gulf and elsewhere, in part to keep down the cost of our insatiable thirst for it; or, at least, to keep the costs hidden from view.
Our entire economic system is based on these subsidies, from agriculture to manufacturing to energy. Especially energy. That's why oil is so cheap right now. Just including the cost of the Persian Gulf military presence - for which we taxpayers foot the bill - would at least double the price of oil. The thing that scares me even more than monetary subsidies, however, are the hidden subsidies that can never be accounted for. Can you put a price tag on global warming? Can you put a price on a pristine lake or river? The so-called economic view of our planet and life is anti-life. (pp. 112-113)Eventually, quite possibly within my lifetime, the oil is going to run out. Even before then it will become so prohibitive in cost as to be inaccessible. So why does the government continue to subsidize the oil industry? Because its scarred shitless about what the end of oil means for our way of life and will do anything in its power - no matter the cost to human beings or to the planet upon which all life depends - to keep it flowing for as long as possible.
Our government is subsidizing oil in a self-defeating attempt to buy time; self-defeating, because its pro-growth economic policies only promote oil consumption and hasten the eventual collapse of the fossil fuel economy. I don't know if our leaders - like the rest of us - are in denial about this looming crash or clinging to a technological panacea or both. So, we tootle along with business as usual while the planet burns and the clock is ticking.
Industrial civilization is not sustainable. Our energy consumption is overshooting the carrying-capacity of the planet and creating a toxic stew in its wake. We are in a no-win race to see which comes first: the collapse of industrial civilization or the collapse of the ecosytems it is destroying, which is another way of saying the same thing. Jensen argues that the only question for us is the extent to which we can mitigate the violence and degradation that this collapse will entail, and begin to plant the seeds of a sustainable culture.
Jensen challenges us to squarely face the consequences of our choices. He is worth quoting at length:
We all face choices. We can have ice caps and polar bears, or we can have automobiles. We can have dams or we can have salmon. We can have irrigated wine from Mendocino and Sonoma counties, or we can have the Russian and Eel Rivers. We can have oil from beneath the oceans, or we can have whales. We can have cardboard boxes or we can have living forests. We can have computers and cancer clusters from the manufacture of those computers, or we can have neither. We can have electricity and a world devastated by mining, or we can have neither (and don't give me any nonsense about solar: you'll need copper for wiring, silicon for pohotvaltaics, metals and plastics for appliances, which need to be manufactured and then transported to your home, and so on. Even solar electrical energy can never be sustainable because electricity and all its accoutrements require an industrial infrastructure.) We an have fruits, vegetables, and coffee brought to the U.S. from Latin America, or we can have at least somewhat intact human and nonhuman communities throughout that region . . . We can have civilization - too often called the highest form of social organization - that spreads (I would say metastasizes) to all parts of the globe, or we can have a multiplicity of autonomous cultures each uniquely adapted to the land from which it springs. We can have cities and all they imply, or we can have a livable planet. We can have "progress" and history, or we can have sustainability. We can have civilization, or we can have at least the possibility of a way of life not based on the violent theft of resources.
We can't have it all. The belief that we can is one of the things that has driven us to this awful place . . . To pretend that civilization can exist without destroying its own landbase and the landbases and cultures of others is to be entirely ignorant of history, biology, thermodynamics, morality, and self-preservation. And it is to have paid absolutely no attention to the past six thousand years. (pp. 148-149)This is quite an indictment. It raises all kinds of questions that we would rather avoid. But we can't. It is time for us to begin to imagine what kind of life is possible, what kind of cultural is desirable, after apocalypse. Beginning from a very different set of assumptions, Alasdair MacIntyre came to a similar - now, seemingly prophetic - conclusion in his After Virtue:
What matters at this stage is the construction of local forms of community within which civility and the intellectual and moral life can be sustained through the new dark ages which are already upon us . . . This time however the barbarians are not waiting beyond the frontiers; they have already been governing us for quite some time. And it is our lack of consciousness of this that constitutes part of our predicament. We are not waiting for Godot, but for another - doubtless very different - St. Benedict. (p. 263)It is not the intellectual and moral life, but life itself, with which we must be concerned. And we cannot wait for this new and improved St. Benedict. It is up to us.