Yesterday, Speaker Boehner said that he was open to reevaluating subsidies to oil companies. That's a bold step for a Republican legislator: GOP lawmakers receive a lot of support from the oil and gas industry. In fact, 77% of the $65 million that the industry contributed to politicians between 2009 and 2010 went to Republicans. So the Speaker deserves credit for his stated desire to "see all the facts." And we're anxious to help! Let's take a look at some of the current subsidies to oil companies.

Tax Expenditures ~ $3.96 billion in 2010

Oil companies specifically benefited from $3.96 billion in tax expenditures for 2010. Here’s a breakout of the individual tax breaks and their respective amounts:

Tax Expenditures Benefiting Oil Companies, 2010

Tax Expenditure	$ millions
Expensing of exploration and development costs, fuels	$2,040
Temporary 50% expensing for equipment used in the refining of liquid fuels	$1,140
Excess of percentage over cost depletion, fuels	$610
Amortize all geological and geophysical expenditures over 2 years	$150
Exception from passive loss limitation for working interests in oil and gas properties	$20

Source: Subsidyscope.com

As you can see, the largest tax break listed is the expensing of exploration and development costs. Essentially, this allows companies to deduct "intangible drilling costs" (such as wages or the cost of materials when constructing a well) from their taxable income immediately, rather than amortizing the costs over several years (the standard for other businesses). Most other companies are required to amortize their expenses over several years because it more accurately measures the net income for each year.

Non-Competed Contracts ~ $4 billion in 2010

The federal government contracts with oil companies to procure fuel for various branches of the government. This is not a subsidy in itself, but it can be considered a subsidy when the contracts are not fully competed. For 2010, the federal government awarded over $4 billion in non-competed contracts to companies to procure oil and petroleum.

Royalty Relief ~ $ billions

By law, the Department of Interior is required to charge royalty fees for the fair market use of public lands and goods extracted from them (typically between 12.5% and 18.75%). However, there exist special exemptions for oil and gas drilling and exploration, both on Interior land and waters in the outer continental shelf that are also managed by the Department of Interior. The reduction in royalties assessed on oil and gas extracted from government owned lands is called royalty relief. While noting the difficulty in generating an accurate estimate, the GAO estimates the cost of royalty relief is in the billions each year. Just for the deep water areas in the Gulf of Mexico, the GAO estimated $21 billion to $53 billion in losses from royalty relief between 1996 and 2000.

Cleanup Costs That Exceed the Oil Spill Liability Trust Fund ~$??

The Oil Spill Liability Trust Fund is intended to allow the federal government to respond quickly and efficiently to oil spills. The fund is paid for by a tax on oil produced in or imported to the US. However, the fund has a $1 billion per incident cap. According to the most recent GAO report, the total estimated cost of the Deepwater Horizon disaster is in the tens of billions. To date, $629.5 million of the $1 billion cap has been paid out. If the costs exceed $1 billion, agencies may be required to use their appropriated funds or obtain supplemental funding.

Depending on your definition of subsidy, there are many other ways (less easily estimated in dollars) that the federal government subsidizes oil and gas companies. These may include research and development grants, transportation infrastructure such as pipelines or the military defense of oil shipments. Even setting aside these other possibilities, the data is in: Oil companies benefit from billions of dollars worth of subsidies every year.

Every morning, when you step into a plane, train, car or bus, your trip is probably subsidized – directly or indirectly –by the federal government. Yet while transportation spending is projected to total $119 billion this fiscal year (including stimulus money), it receives relatively little scrutiny.

Today, Subsidyscope launches its transportation site, which will highlight overlooked stories, from expensive projects in sparsely populated areas to which public transit agencies get the most money. The site will also give you a chance to find these stories yourself. We’ve created a searchable database allowing users to find transportation subsidies by state; by type of recipient (for-profit company, for instance); and by mode (highways, public transit, etc.), among other options. You can also type in a search term, such as the name of a company or a type of fuel, for a more targeted approach.

We’ve developed an innovative way to identify programs we think are subsidies. Using tags, we’ve excluded transportation programs that are primarily safety- or enforcement-related; users can take our approach or ignore our suggestions and slice the data another way by choosing different tags.

Here are a few of the interesting things we’ve found so far:

• From fiscal years 2000 through 2008, the government spent far more on highways than on other modes. Highways received 76 percent of the direct expenditures; public transit came in a distant second at 16 percent.
• From fiscal years 2000 through 2008, Alaska received more transportation funding per resident -- $8,167 – than any other state. This was almost eight times higher than California, which saw the lowest per-capita spending ($1,031).
• Last year, tax breaks to employees for parking cost the government an estimated $2.92 billion in lost revenue. Tax breaks for employer-provided transit passes, in contrast, amounted to only $480 million last year. While the gap is narrowing, employers still subsidize driving over transit by a margin of six-to-one.
• Bombardier Transit, a multinational company headquartered in Germany, received $3 million to create a high-speed “demonstration fossil fuel passenger locomotive” in the village of Clinton, NY
• The state of Wisconsin received $5,843,878 in Highway Planning and Construction funds from FY 2000-2009 for improvements near the General Motors Janesville Assembly Plant. GM closed the plant this year, putting more than 2,000 people out of work.

In the coming weeks, transportation stories will appear regularly on the site. We’ll present information graphically whenever possible, using interactive maps, charts and visualizations. And we’ll post relevant reports and documents from government and other sources. We hope you’ll use the site to make your own discoveries.

Starting today, the Subsidyscope Web site tries to bring a little order to the government’s bewildering economic rescue effort. A project of The Pew Charitable Trusts and the Sunlight Foundation, the site will offer data and analysis on federal market interventions of all types over the next several years. What better place to start than the bailout – the acronym-rich array of stock purchases, loans and loan guarantees that seems to grow bigger each day?

We begin by offering a database of transactions under the Treasury Department’s Troubled Asset Relief Program, better known as TARP. Here you can find the name of each institution that got TARP money; its location; its size (as measured by total assets); and the amount and date of the transaction. We also show a breakdown of the potential subsidy costs of these stock purchases and loans, as estimated by the Congressional Budget Office. TARP transactions become subsidies when the government pays more than market value for stock or makes loans at below-market rates. About a quarter of the $247 billion allocated by Treasury as of Dec. 31 constitutes a subsidy, the CBO reports. In our chart, you’ll see that the subsidy rates for some transactions – e.g., loans to General Motors and Chrysler, estimated by the CBO at 63 percent – are quite high. The average rate for all transactions is 26 percent.

We’ll add numbers, graphics and documents to the site in the coming weeks and months. The aim is to make Subsidyscope a source of comprehensive, easy-to-understand information on the bailout and other massive federal programs.

On his campaign Web site, John McCain laments that "wasteful special interest subsidies are not moving us toward an energy solution." In particular, McCain tees off on "subsidies, tariffs and price supports that focus exclusively on corn-based ethanol" - one of Barack Obama's favored fuels.

McCain, however, has become a vocal advocate for the oil industry, which is itself heavily subsidized despite enjoying the fruits of soaring crude prices. Doug Koplow, who's been researching energy subsidies for 20 years and is president of Earth Track, says that this "very large, very sophisticated, profitable industry" can pay its own freight. "It can pay for its own R&D. It can pay its own cleanup costs," Koplow observes. "So why are you subsidizing it at all?"

Just how big is the subsidy? It's hard to quantify with much precision, given the secrecy surrounding corporate tax returns and other barriers to transparency. Friends of the Earth took the most recent stab at it in a July report, "Big Oil, Bigger Giveaways". The environmental group calculated that the oil and gas industry will receive "more than $32.9 billion in handouts from taxpayers over the next five years." This includes "tax benefits, royalty relief [forgiveness of royalties], research and development subsidies and accounting gimmicks that benefit the oil industry."

Koplow believes the Friends of the Earth number is low because it doesn't include the cost of defending oil shipping lanes in the Persian Gulf, the cost to own and operate the stockpile of oil in the Strategic Petroleum Reserve, or accelerated depreciation benefits, which allow companies to write off investments in pipelines, drilling equipment and other infrastructure more quickly than the stuff actually wears out. His total subsidy figure for oil and gas: $39 billion a year.

Using defense spending data from the mid-1990s (adjusted for inflation), and assuming that only about a third of this spending goes toward protecting shipping lanes, Koplow estimates the value of the defense subsidy alone at nearly $20 billion a year - not including the cost of the Iraq war.

In fairness, Koplow notes that - on a per-unit-of-energy-produced basis - oil isn't the most generously subsidized portion of the energy sector. It's eclipsed by both ethanol and nuclear power, he says. Obama has embraced the former, touting the biofuel throughout the primary campaign. "Mr. Obama is running as a reformer who is seeking to reduce the influence of special interests," Larry Rohter reported in the New York Times in June. "But like any other politician, he has powerful constituencies that help shape his views. And when it comes to domestic ethanol, almost all of which is made from corn, he also has advisers and prominent supporters with close ties to the industry . . ."

McCain, for his part, is a friend not only of big oil - he opposes new taxes on the industry, Obama favors them - but has called for the construction of 45 nuclear reactors by 2030. Critics say that no reactor will be built without massive subsidies; the Department of Energy has started down that road with a new loan guarantee program that sets aside up to $18.5 billion for nuclear construction. Here's a fact sheet on both candidates' energy policies from Reuters.

Stay tuned for more from Sunlight on the issue of government subsidies.