Congressman John Yarmuth (KY-3) announced today that he will introduce legislation to finally end federal subsidies to oil companies and return the money to the American people through targeted gas rebates.
Federal subsidies to oil companies will amount to about $38.6 billion over ten years. Not bad at all for an industry in which the top three US players alone earned $230 billion in just the last four years alone.
Yarmuth's legislation would permanently end corporate welfare to these highly profitable companies, some of which have recently booked profits higher than any in the recorded history of mankind. It would then take the first ten years of these savings, and inject them all back into our still struggling economy immediately by paying them out as "rebates" to US vehicle owners.
According to Yarmuth's press release, every car owner would receive a check from the IRS for about $160. That would be an average of $320 for Kentucky families and would inject about $564 million into Kentucky's struggling economy.
Speculators have been relentlessly driving up crude oil prices for several months due to increasing tension and, what many see as, war mongering over Iran. In an unprecedented move, Europe will soon join the boycott on Iranian oil, and just last week many Iranian banks were denied access to most global financial markets. Iran has threatened to blockade the Straits of Hormuz. Such a blockade would strangle global oil inventories and President Obama has promised military action to keep the straits open if it comes to that. Attacks on Iranian naval forces enforcing the blockade could quickly and easily escalate into a yet another devastating Middle East war.
In the US, Republicans have seized on rising gas prices to try to force the administration to approve the XL pipeline that would give Canadian tar sands oil access to global markets via the Gulf of Mexico. Opening of the pipeline would eventually increase global supplies and, to that degree, and only to that degree, exert some downward pressure on global crude oil prices.
While the XL pipeline could very modestly lower gas prices for Americans on the East and West coasts, it could actually increase gas prices in parts of the Midwest, including Kentucky. Midwestern refineries have been able to buy tar sands oil at significant discounts because so much of it is landlocked and has no way to get to global markets.
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