NBB chief Joe Jobe blasts Big Oil for “misleading Americans about fuel policy,” and operating a “propaganda machine” to “kill diversity and choice” in transportation fuels.
In California, National Biodiesel Board CEO Joe Jobe blasted the petroleum industry for “misleading Americans about fuel policy”, and he called on President Barack Obama to stand firm behind his previous commitments to supporting alternative energy industries.
“Biodiesel’s story is an example of how effective government policy can be to jump start a fledgling industry,” he said. “That is the same story of nearly every new industry that involves technological development. Strong government policy support along with a unique spirit of innovation, entrepreneurship, and risk-taking are the primary reasons that so many major modern industries had their start in America.”
On RFS, Jobe explains, “The Renewable Fuel Standard is effective policy that is working. It is fulfilling its intention to establish diversity, competition, and choice in the transportation fuel sector, which is why the incumbent industry is trying to kill it.”
The “incumbent” is Big Oil, a term Jobe defined as those working around the clock to erase the RFS and all it has accomplished. He pointed out that the idea of a free energy market is false and that nothing about the global or domestic petroleum market is free, despite what the petroleum industry’s propaganda machine would have us believe. First, the petroleum sector has, since its start, enjoyed tax and policy support. They began at the birth of the industry and continue today.
Jobe, who is a CPA, meticulously outlined a few of the subsidies and other policy support. He also reminded the audience the government’s definition of a subsidy: any targeted tax code preference, and include:
1. Percentage depletion deduction – a deduction where companies can write off more than their actual cost, in some cases significantly more.
2. Nonconventional petroleum tax credit – when this decades long program ended in 2007 credits had grown to $4.5 billion annually.
3. Immediate write-off of Intangible Drilling Costs.
4. Some companies are allowed to take an enhanced oil recovery credit when oil drops below a certain amount. Specific to the oil and gas industry.
5. Some companies are allowed to set up as Master Limited Partnerships, which means they pay no corporate income tax. This is specific to oil and gas companies and is about as big of a corporate tax break as you can get.
“The petroleum lobby purports that more domestic petroleum will translate to lower prices, but the facts prove otherwise,” said Jobe. “Despite record U.S. production, fuel prices have stayed high.”
“Oil is a global commodity where prices are controlled by an international cartel that fixes supply to ensure high profits. And the fracking of shale oil is costly. If the price drops, it will no longer be economical to maintain production. These realities mean the energy market is anything but free.”
The National Biodiesel Convention and Expo continues this week in San Diego.
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