OP-ED: Legislature Gives Big Oil More Tax Breaks

By David Schaeffer

AS YOU READ this op-ed, a package of bills aimed at giving big oil further tax breaks and expanding eminent domain rights has already passed through the Michigan House with barely even a glimmer of resistance.  This package of bills has an obvious goal of promoting the development of enhanced recovery from oil wells that have previously been sealed.  The question is, do we really need to be giving tax breaks to companies which will likely use enhanced recovery whether we do or not?

The first bill in the package, HB 4855, will lower the severance tax paid by oil drillers for enhanced recovery operations using carbon dioxide (CO2) from 6.6 percent to 4 percent, nearly a 40% decrease. From my perspective it seems fairly hard to make the argument that Corporate Oil needs further assistance in the guise of a tax break. These industrial empires are, after all, some of the most profitable and influential companies on the planet. Not to mention the fact that as the price of crude oil continues to rise, drillers will eventually be willing to invest in enhanced recovery with or without a tax break.

The next two bills in this package, HB 5254 & 5255, will further strip away the rights of Michigan land owners due to the expansion of eminent domain rights for the creation of new pipelines and transportation of the extraordinary amounts of CO2 that will be needed for each enhanced recovery operation. This limits the say that landowners have over activities on or near their land, as well as limiting the information that companies will be required to disclose to land owners.

The final little piece of this package seems harmless enough, after all it just pencils in CO2 pipelines into the statutory regulations that already govern crude oil, petroleum and natural gas. The real concern here is that in Section 3 of HB 5274 a possible loophole has been written in that could allow companies to evade Michigan  Public Service Commission (MPSC) oversight in special cases where “the nature and extent of their business is private, and where if in the conduct thereof no public interest is involved.”  Can anyone else see that coming back to bite citizens in the rear?

Now while it’s a little surprising that more Republicans haven’t spoken up against the expansion of eminent domain, the real shocker is the reaction of Democrats. While in committee, not a single Dem voted against this package, and even though some voted against the bills on the floor, the Party has largely remained silent. Once again it appears as though the fear of political backlash in an election year has given our elected officials cold feet when it comes to standing by their values and speaking out against the oil industry.

As a young, educated, and hardworking American am I surprised? Not at all. Overwhelmingly I am disappointed, but I am long past surprise at the influence of corporate money in politics.

(David Shaeffer lives in Lansing, Michigan.)