Oil is still pouring out into the Gulf ocean from the well head of the DeepWater Horizon. The entire gulf is beginning to look like an oil slick, as we learn that oil companies like BP, rig owners like TransOcean, and contractors like Halliburton (the cement plug provider in the Gulf spill) never bothered much abouit preparing for potential disasters--especially not spending money to research solutions to potential catastrophes. Quelle surprise!
There are lots of tax benefits for natural resource extraction--many that we should eliminate asap, if we are serious about preserving the environment and moving on to less destructive sources of energy (while activating our economy with real production instead of the financialization, and creating jobs, preventing reliance on middle East oil--all at the same time).
Senator Grassley wants to know just what the tax benefits and subsidies for the major contractors in the spill have been. See Grassley letter to chair of BP, May 17, 2010, asking for an accounting of all tax breaks/subsidies and royalty relief from 2005 to the present and what benefits, tax and otherwise, are received by DeepWater Horizon's operating under the flag of the Marshall Islands; Grassley letter to chair of TransOcean, May 17, 2010, asking for the same information about TransOcean and information about its other rigs operating under foreign flags (and who made the decision to replace mud with seawater, leading to the explosion, among other things) .
Sounds like a good line of questioning to pursue to me. When we see the greed-centered decision-making of companies like BP and TransOcean, we should see as clearly as possible the way we've provided tax expenditure "handouts" to them over the years. Welfare for corporations is a growing item in our budget--that will likely be added to by the "extenders" bill under consideration at this time in Congress.
Grassley also is seeking full information on the Minerals Management Services lax regulatory effort. Not surprisingly, this agency absorbed the lesson of four decades of deregulatory thinking quite well, as evidenced by the "sex for leases" scandal a few years back. See Grassley's letter to Salazar seeking accountability from the agency (May 17, 2010). A similar letter to Halliburton seeks information on the cement and the regulatory oversight of its use. See Grassley letter to Halliburton, May 17, 2010.
Addendum: Transocean has an ongoing dispute with the IRS over $698 million in taxes that the IRS claims are due. Originally a US multinational headquartered in Houston, it first purportedly moved its headquarters to the Cayman Islands (mailbox offices, anyone?) and then in 2008 created a new world headquarters in Switzerland. The US tax dispute continues, and it also has an ongoing tax dispute with Norway. See ABehind-the Scenes Firm in the Spotlight, NY Times, May 24, 2010. It has a reputation, in other words, for taking aggressive tax-saving positions. Seems to fit with its apparent stance on deep oil drilling. Although it has expanded aggressively over the last decade or so and now runs half of the 50 deep ocean oil rigs (see its website, describing itself as the "world's largest offshore driling contractor"), it clearly has not spent much money on developing safety and environmental protection technology as it should have done--and unless the US Congress changes the laws on liability, it may get off almost scot-free in terms of having to pony up for damages for the worst offshore oil disaster in US history--including human lives lost, ocean water and animals polluted and killed, and onshore damages. See, e.g., Transocean's web announcement of a filing in the Southern District of Texas to limit liability.