By Matthew Reichbach
With government spending and the Congressional debate on raising the debt ceiling dominating headlines, a collection of New Mexico groups gathered outside an Internal Revenue Service building in Albuquerque to protest subsidies given to the oil industry.
The groups were aided by a report by Taxpayers for Common Sense called “Subsidy Gusher” which “outlined $78.1 billion in subsidies and specialized tax breaks to the oil and gas industry over the next five years.” The study also found that New Mexico taxpayers contribute $104 million per year in subsidies to the oil and gas industry — or $285,000 per day.
“Oil and gas companies are hauling in enormous profits,” Jill Lancelot of Taxpayers for Common Sense said at the rally.
“We think that oil and gas companies that are profitable ought to be to pay their fair share in taxes and they’re not doing that at this point,” Lancelot said. “It’s just wrong that these corporations make this amount of money and are unwilling to pay their fair share.”
“The oil and gas industry is alive and well and doing quite well here in New Mexico,” Matthew Garrington, the Deputy Director of the Checks & Balances Project said at the rally. “In fact, in June and July, the state of New Mexico just saw the two most lucrative months for leasing on record here in the state.”
Garrington also said that drilling activity is 40 percent above the 20 year average and that New Mexico is “about to hit a 20-year high in the number of oil and gas rigs that are on the ground, operating right now.”
The report states that “the oil and gas industry’s Congressional ties run deep.”
Not surprisingly, oil and gas companies have spent hundreds of millions of dollars over the past decade in an effort to lock in the preferential treatment they receive from Washington. Since the start o the 2002 election cycle, the oil and gas industry has donated $138.7 million to the campaigns of elected officials in Washington, according to the Center for Responsive Politics.
The coalition of groups, which also included Republicans for Environmental Protection, OLÉ, New Mexico Wildlife Federation, Backcountry Hunters and Anglers and the Alliance for Retired Americans, held a sign near the IRS pointing out the subsidies that New Mexicans paid for the oil industry.
Some supporters of the oil and gas industry have argued that if the industry is not given tax breaks the companies would move out of the state to other states that provide better tax incentives.
“[That’s] absolutely not true because oil and gas companies have to drill wherever dinosaurs died in the ground,” Garrington said. “They can’t pick up shop and move next door to Arizona for drilling because there’s no oil and gas there.”
“The simple fact of the matter is that they will drill as long as prices are high and they’ve got the technology to get at the resources,” Garrington said.
The oil and gas industry defended its role in New Mexico. The Associated Press reported:
According to the New Mexico Oil and Gas Association, the industry paid more than $1.5 billion in taxes, fees and royalties to the state during the 2010 fiscal year. It also paid an additional $141 million in local taxes.