Issues > Energy > Printer Version
Slick Subsidy
Petroleum Research and Development Program

$210 million

"Some of this activity is simply corporate welfare for the oil, gas and utility industries. Much of it duplicates what industry is already doing. Some has gone to fund technology in which the market has no interest." Representative Bernie Sanders (I-VT), quoting from the 1997 Republican budget resolution in the Congressional Record, July 15, 2000.

The U.S. Department of Energy's (DOE) Oil Technology Research and Development Program focuses on the exploration and production of crude oil in the United States. Among the beneficiaries of the Oil Technology program are BP, ChevronTexaco, ExxonMobil and Marathon. The program's goals include the promotion and enhancement of oil drilling in the Alaskan Arctic and the Powder River Basin in Wyoming.. This program uses millions of taxpayer dollars annually to subsidize research benefiting oil corporations that pollute the environment and threaten public health.

Green Scissors Proposal
Eliminate the DOE s Oil Technology Research and Development program, saving $42 million per year and at least $210 million over five years.

Current Status

Congress funded the Petroleum Oil Technology R &D program at $42 million in the fiscal year 2003 omnibus Appropriations bill (H.J. Res. 2). The administration's fiscal year 2004 budget requested $15 million for the Oil Technology programs. This is a 64 percent decrease from the fiscal year 2003 appropriations. The Senate Energy bill (H.R. 6) authorizes $2.1 billion for petroleum research and development.

Program Hurts Taxpayers

Private sector corporations already conduct research and development for exploration and production, spurred by market forces. The DOE's oil technology research and development program competes with or duplicates private sector research.

This program constitutes corporate welfare. The multibillion-dollar industries that benefit from this program can afford to conduct their own research and development and do not need additional funding from federal taxpayers. In 2000, ExxonMobil, one of the beneficiaries of DOE's Oil Technology program, spent over ten times the total amount appropriated for the government's program on its own research and development activities.

Program Hurts the Environment

All aspects of oil exploration and production have severe environmental consequences. Oil drilling often leads to the release of oil and other toxic materials that contribute to the destruction of sensitive ecosystems. Oil refining is a major source of chemical releases reported through the U.S. Toxics Release Inventory. It is estimated that the oil industry spills 31,000 gallons of oil into U.S. waterways every day. For example, in Alaska's Prudhoe Bay an average of 400 oil spills occur per year -- one spill every 22 hours.

Increased oil production also presents serious health threats. Burning petroleum is a major source of smog-forming nitrogen oxide pollution as well as carbon dioxide, a global warming pollutant.

Contacts

• Navin Nayak, U.S. Public Interest Research Group, (202) 546-9707;
• Aileen Roder, Taxpayers for Common Sense, (202) 546-8500 x130;
• Erich Pica, Friends of the Earth, (202) 783-7400 x229.