Tim Johnson calls for end to oil subsidies; Thune disagreesSen. Tim Johnson, D-S.D., called for an end to taxpayer subsidies for oil and natural gas companies Wednesday, saying instead the United States should invest in further ethanol production and improving the infrastructure to deliver ethanol to market.
By: Denise Ross, The Daily Republic
Sen. Tim Johnson, D-S.D., called for an end to taxpayer subsidies for oil and natural gas companies Wednesday, saying instead the United States should invest in further ethanol production and improving the infrastructure to deliver ethanol to market.
“High-priced oil threatens both our energy and economic security. We have a homegrown solution — ethanol,” Johnson told reporters. “It’s time to end the $4 billion a year of taxpayer giveaway to big oil. Oil companies don’t need any help.”
Johnson said the top five oil companies have recorded $32 billion in profits so far in 2011.
Johnson, a member of the Senate Energy Committee, co-sponsored the Domestic Energy Promotion Act of 2011 this month. The bill would provide more certainty for ethanol producers by setting the blenders tax credit at 20 cents per gallon in 2012 and 15 cents per gallon in 2013, before implementing a variable rate tied to oil prices. It also would extend the cellulosic ethanol tax credit through 2016 at the current rate of $1.01 per gallon.
“Ethanol means real jobs today and tomorrow for South Dakotans. Ethanol can address America’s energy and security needs,” Johnson said.
He also supports subsidies for flex-fuel vehicles and for the installation of E-85 blender pumps.
In a separate conference call with reporters, Sen. John Thune, R-S.D., said he does not support “raising taxes” for anybody — including oil companies. And he said such a move could raise gas prices for consumers.
“I don’t think raising taxes is going to do anything to reduce the price at the pump,” said Thune, who called Democrats’ rhetoric against oil companies a move to mollify environmentalists. He said the idea would not pass in the U.S. Senate and would be “dead on arrival” in the House.
Instead of ending the tax credits, Thune said the government should lift any restrictions on access to domestic oil reserves.
“This push for climate taxes and to block access to reserves is not helpful. This a case of environmental groups versus jobs for Americans,” he said. “When you’re producing your own energy, you’re less dependent on the cartel.”
He called the current weakness of the U.S. dollar “a major factor” in high gas prices.
The average nationwide price of regular-unleaded gasoline was $3.962 Wednesday. In South Dakota, the average was $3.921.