GOP Witness Confirms That U.S. Government Should Not Subsidize Mature Industry after Congressman Grills Her on $650 Billion Annual Oil and Gas Tax Subsidies
Washington, D.C. – During this week's Select Committee on the Climate Crisis hearing Congressman Sean Casten (IL-06) questioned GOP witness Heather Reams on the harmful, market distorting tax subsidies provided to the failing oil and gas industries—a problem which he recently introduced new legislation to solve. These subsidies cost taxpayers $650 billion a year, and President Biden has also sought to end them through the American Jobs Plan.
During his questioning, Rep. Casten quoted an excerpt from Reams' written testimony that stated "never ending subsidies skew markets in a way that stifles American innovation," before pointing out that a particular industry has seen "45% reduction in demand for its product, a 40 to 45% reduction in their per unit price because there just wasn't the demand to prop that price up, $340 billion of negative cash flow, and up to 250 bankruptcies."
When Casten asked Ms. Reams if she thought the government should subsidize such an industry to keep it afloat, Reams agreed that these failing industries should not receive subsidies of any kind. Casten then revealed that he was specifically referring to the oil and gas industry.
Full transcript:
Casten: Miss Reams, I really, really appreciated your written testimony, and particularly when you said that, I think I've got this quote right, "never ending subsidies skew markets in a way that stifles American innovation." I couldn't agree more, as a guy who sat there as an innovator deploying clean technology. If you had an industry that over the last decade had seen a 45% reduction in demand for its product as competition came along, that saw a 40 to 45% reduction in their per unit price because there just wasn't the demand to prop that price up, that saw $340 billion of negative cash flow, up to 250 bankruptcies. Do you think the government should subsidize that industry to keep it afloat?"
Heather Reams: I think that mature technologies, there's a, there's a tough argument to be made for mature technologies receiving any kind of subsidy.
Casten: Okay, well I agree, I just described the oil and gas sector. That was: 45% decline in coal 40 to 45% reduction in the prices of coal and gas, $342 billion of negative free cash flow in the shale gas sector. During 50 bankruptcies $20 billion of write offs for Exxon Mobil and yet, according to the IMF we still subsidize the fossil fuel industry to the tune of $650 billion a year. We need a level playing field, and we need to stop deluding ourselves that the level playing field doesn't overwhelmingly skew to the dirty energy sector. Thank you and I yield back.