I’ve debated with myself about writing about this call since I gained a degree of respect for the former congressman, a Democrat from an oil-producing state, who called me out of the blue in early October. He had read a story I wrote for another publication back in August, in which I discussed his political party’s fraudulent allegations that oil and gas companies enjoy tax “subsidies” from the federal government.
Here, in part, is what I wrote then:
The oil and gas industry does not receive “subsidies” of the type that wind, solar and electric vehicles enjoy, i.e., direct transfer payments from the government to enormous corporations like Tesla, General Motors and Ford totaling billions of dollars every year. Some in the industry — mainly small producers and royalty owners — do benefit from the expensing of intangible drilling costs, which is similar to appliance manufacturers or pharmaceutical companies expensing their own cost of goods sold every year. Small independents and royalty owners also benefit from percentage depletion, a provision that is similar to depreciation of inventory in other industries. Biden proposes to single oil and gas out by repealing those oil and gas-related provisions, which have existed in the tax code for more than a century.
In all, (Biden’s) Green Book contains a whopping total of $147 billion in new industry taxes, which would negatively impact mainly the red states where oil and gas is produced in the U.S.: Texas, Alaska, Wyoming, Montana, Louisiana, North Dakota, Ohio and Pennsylvania. In most respects, it is the same nakedly political move that was attempted during all eight years of the Obama/Biden administration without success. We’ve seen it all before, most of it, anyway.
I’ve written about this subject for many years. I spent my first 15 years in the oil industry as an accountant for several companies. I know this stuff like the back of my hand. Trust me, these are not “subsidies” by any honest definition.
Anyway, this former congressman is a lawyer -— turns out that he is actually a law professor at a state-run university in his home state who served a couple of terms in congress recently but then lost a bid for re-election. I won’t identify him by name or the state he’s from because we had a respectful discussion, and I respect his privacy.
Here’s what he wanted to talk about: Throughout his entire time in Congress, he was told by his staff, his colleagues, the Democrat party leadership and activists who visited his office that these long-time, century-old tax treatments specific to oil and gas were the same kinds of subsidies that wind and solar and EVs get and that most of those alleged oil industry subsidies actually go to major, integrated companies like Exxon. That’s literally what he believed when we began our discussion.
When I told him that Exxon does not, in fact, benefit in any way from those treatments and neither do any of the other major oil companies, he told me he didn’t believe me and was frankly a little belligerent about it. But I assured him I was right and also told him the respective years in which those treatments were taken away from integrated oil companies and even many large independent producers — 1975 for percentage depletion, 1992 for deduction of intangible drilling costs.
He was incredulous when I told him that. Why? Because he and all of his colleagues were told exactly the opposite by people they trusted. In fact, the religious dogma spread by the climate alarmists alleged these “subsidies” were an invention by evil Dick Cheney and W. Bush in the 2005 time frame. Abject nonsense. Pure fantasy.
I told him to go do a little research, and he would see I was right and referred him to an expert he could check with in Washington, DC, if he wanted to do so. That at least mollified him a bit.
But then it got even better. “But,” he said, as he got down to his apparent existential dilemma, “but, here’s the thing: if what you’re saying is true, then the Democrats in Washington are intentionally trying to harm the domestic oil industry just for pure political reasons.”
“Well…yes,” I replied. “They are.” How could that possibly come as a surprise to him?
“But…but that can’t be,” he said. “The oil industry employs millions of people. Our economy is still hugely dependent on oil and gas.”
“Well…yes. Yes, it is.”
“But…but if what you are saying is true, and the Biden people know this, and Pelosi and Schumer know this, then they are trying to intentionally damage the U.S. economy,” he continued, as he followed this all out to its inevitable logical conclusion.
“Well…yes,” I said again. I have to admit I was chuckling at this point.
“But that doesn’t make any sense!”
“Well, it does if your goal is to intentionally create shortages of oil, natural gas and coal to make renewables and EVs more competitive in the marketplace.”
“Congressman, this is the plan, and it has been the plan since you served in congress. Long before then, in fact,” I said.
“No. No one said that to me,” he said. “I can’t believe this is true. You must be wrong.”
“No, I’m right, I assure you,” I said and again referred him to the expert in DC.
Our conversation continued back and forth along these lines for quite some time until I finally told him to take a look at the group of zealot anti-oil and gas advisors with whom this president has surrounded himself:
- John Kerry
- Leftwing ex-Michigan Gov. Jennifer Granholm as Energy Secretary
- An unapologetic eco-terrorist, Tracey Stone-Manning, as Director of the Bureau of Land Management
- A life-long anti-oil and gas activist, Deb Haaland, as Secretary of Interior (who the congressman said is a personal friend of his and would never do anything to harm the oil and gas industry)
- An array of appointees at EPA, DOI, Commerce and Treasury that come out of the radical anti-oil and gas climate alarm groups
“Which of these advisors do you think are advising President Biden to strengthen the domestic oil and gas industry?” I asked. “Who among them do you think is telling the president the truth about these tax treatments?”
“Tell me this, congressman,” I added. “In your entire time in Congress, representing a significant oil and gas state, did you ever receive a single visit from a single representative of the oil and gas industry to talk to you about any of this? I’m betting the answer is ‘no.’”
“No, I never had any requests for meetings from anyone in the business.”
“So, in your defense, that’s the industry’s fault, isn’t it? I mean, how are you or any other Democrat member of congress supposed to hear the industry’s side of this if they don’t come talk to you?”
“Yes, that’s true,” he said. “But that’s just how it is in Washington now. There are only a handful of Democrat members that anyone in the industry bothers with.”
“Yes, I know. By the same token, though, there are only a handful of Republican members that the radical greens bother with, right?”
“Yes, it is true. And it’s also how you end up with members of one party ending up believing abject nonsense like this fantasy that “Big Oil” gets a bunch of federal tax subsidies, like wind and solar and EVs do, right?”
“Right. If what you’re saying is true.”
“Oh, it’s true.” The conversation ended shortly after.
Two days later, he sent me an email telling me he enjoyed our discussion and that “your arguments are persuasive.” I felt like responding with something like “they aren’t arguments — they’re facts,” but I decided to check myself on that since he truly had been mainly gracious in our call and really did seem to be trying to find the truth.
Honestly, I don’t know if he will be willing or able to ultimately accept the inevitable logical conclusion that his own reasoning during our call will lead him to. It’s hard for anyone to give up what is without doubt religious dogma with which they have been indoctrinated by true religious zealots like those in the climate alarm industry and Democrat party leadership.
I hope he does, though, since he is in the business of influencing young minds now. The dogma has to end somewhere if our country is going to survive.
About the author: David Blackmon is the Editor of SHALE Oil & Gas Business Magazine. He previously spent 37 years in the oil and natural gas industry in a variety of roles — the last 22 years engaging in public policy issues at the state and national levels. Contact David Blackmon at [email protected]