As Gas Prices Climb Along with Oil Company Profits, Brown to Announce Bills to Target Price Manipulation by OPEC Countries and End Tax Loopholes for Big Oil

“Close Big Oil Tax Loopholes Act” Would End $4 Billion in Tax Giveaways to Big Oil, Use Savings to Reduce Federal Deficit

No Oil Producing and Exporting Cartels (NOPEC) Act Would Allow U.S. Attorney General to Prosecute OPEC Countries for Manipulating Gas Prices

 

CLEVELAND, OH—With the average price per gallon of gas in Ohio up more than $1.30 over the last year and 48 cents in the last month alone, U.S. Sen. Sherrod Brown (D-OH) held a news conference today at a gas station in Cleveland to unveil a new bill aimed at ending the more than $4 billion in tax deductions, subsidies, and royalty relief given to Big Oil companies each year. Brown’s bill would end these wasteful taxpayer handouts to big oil companies making record profits and use the savings to reduce the federal deficit.

Brown also announced support for legislation that would give the U.S. Attorney General the authority to pursue legal action against oil-producing nations, like the Organization of the Petroleum Exporting Countries (OPEC), that band together to manipulate the price of oil, natural gas, or any petroleum product.   

“It's bad enough that Ohioans have to pay more than $4.00 a gallon at the gas pump because the price of crude oil rises due to price fixing by OPEC,” Brown said. “They shouldn't need to subsidize the oil industry through the tax code as well.  Big Oil is reaping big profits while working- and middle-class Ohioans struggle to make ends meet.  It's about time this corporate welfare meet its end."

Brown was joined today by Sherri Warner, of the Ohio Trucking Association, and a local retiree and small business owner from Middleburg Heights, who spoke to the tough choices that her family faces due to rising gas prices.

Over the last decade, the nation’s five largest oil companies have taken home nearly $1 trillion in profits—including more than $30 billion in the first quarter of 2011 alone—and tens of billions of dollars in taxpayer subsidies. Oil companies make up four of the top ten spots on the Fortune 100 list of largest corporations.

CEOs from the Big 5 oil companies have testified that they do not need incentives for oil exploration. Meanwhile, gas prices in Ohio have spiked to near-record highs, putting a squeeze on family budgets and small business owners, and placing Ohio’s economic recovery at risk.

The Close Big Oil Tax Loopholes Act is aimed at ending the more than $4 billion in tax deductions, subsidies, and royalty relief to the five biggest oil companies each year. The new bill would end these wasteful taxpayer handouts to big oil companies making record profits and use the savings to reduce the federal deficit. Closing these loopholes will amount to more than $20 billion over ten years for taxpayers.

Among its provisions, the legislation would accomplish the following: 

  • Recoup royalties that oil companies avoided paying for oil and gas production on public lands
  • Prevent oil companies from manipulating the rules on foreign taxes to avoid paying full corporate taxes in the U.S.
  • End a number of tax deductions and relief afforded to the oil industry, such as the deductions for classifying oil production as manufacturing, for the depletion of oil and gas through drilling and for costs associated with preparing to drill.

Brown also announced support for the No Oil Producing and Exporting Cartels Act (NOPEC) which clarifies that OPEC's activities are not protected by sovereign immunity and that the federal courts should not decline to hear such a case based on the "act of state" doctrine.  This would enable the Department of Justice to take action against foreign states for colluding to set the price or limit production of oil. Brown also cosponsored this bill in the 110th Congress.

Brown is working to lower gas prices for Ohio’s families and small businesses. Earlier this year, Brown announced new plans for cracking down on oil speculation, which may be responsible in part for driving up prices at the pump. Brown sent a letter to the Commodity Futures Trading Commission (CFTC) urging the agency to use its full authority under the recently-passed financial reform bill to protect consumers and small businesses from artificially inflated gas prices. He has also called on U.S. Secretary of State Hillary Clinton to push Organization for Petroleum Exporting Countries (OPEC) to increase production levels.

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