Big Oil, the North Sea and the Millions It Costs to Keep It Afloat

Desmog UK have published a report showing the cost of the North Sea Oil industry to the taxpayer. Read it here.

Since 2015, the Treasury has given the industry tax breaks worth £2.3 billion. This is despite BP, Shell and Total making after tax profits of $10 billion in 2016 alone.

The hypocrisy of neoliberalism: no matter the cost, it always pushed onto the population. Whilst the heads of massive fossil fuel extraction companies preach free market principles they run to the government to keep themselves afloat, diverting money that could be used for people’s needs into destruction and ecological disasters waiting to happen. All this despite the oil industry having huge profit margins.

In recent years, the North Sea industry has also become a burden on taxpayers, rather than contributing to the overall economy, as the network claims. In 2016, the Treasury spent £24 million more propping up the industry than it got in return through tax contributions.

The idea of companies fleeing to avoid tax is largely baseless, countries with less tax breaks and higher taxes don’t suddenly become devoid of investment. Corporate tax has lowered substantially along with enormous tax breaks worth billions increasing over the last decades, the costs of which have been shouldered by the general population. The UK now has one of the lowest corporate tax rates of any major economy. 

If it’s costing us money to have the industry there in the first place, those millions could be used or invested much more wisely. Once again, the true ideological colours of the UKs establishment are shown,  with projects and schemes costing the government money huge amounts of money (such as the cruel and massively flawed benefits sanctions system, or skyrocketing prices of new nuclear plants constructed by foreign state-owned entreprises) blindly supported, no matter what their human or ecological consequences.

Another important factor, often ignored, is the hidden costs behind fossil fuel extraction and processing from everything to healthcare costs, environmental cleanup and rising seas. These costs are directly attributable to the processes necessary to fuel use and consumption, yet their cost is always burdened by other parties. Instead of taking into account these damages by means of increased prices or taxation, which would incentivise greener energy (such as wind or solar) as cheaper alternatives, fossil fuel companies are left to do as they please, leeching off the economy in the process.

It’s funny that the Conservatives – a party that professes economic and financial responsibility – would squander so much at the expense of so many. What is the reasoning behind it? What is a multimillionaire CEO or investor going to do with the extra money on the pile? Another imported luxury car that remains in a garage ninety-five percent of the time, another flat sitting idle during a housing crisis, another few thousand pumped into a tax haven whilst we’re told that there’s no money for fundamental public services, whilst those profits empower companies that steamroll ahead on their destructive fate, often lining the pockets of tyrants and dividing the population.

What can you do? You could push for divestment where you study or work, or move your money into banks that don’t invest in fossil fuels. It won’t change the world, but it will make a dent in fossil fuel revenue. 

Leaving dirty energy behind is key to preventing the worst scenarios of runaway climate change, which becomes more and more probable with each passing day stuck in the status quo. The combination of climate disasters and the current massive inequality would be horrible: a return to some form of feudalism, an unimaginably repressive dystopian world ruled entirely by private interests, humans serving merely as geopolitical pawns and armies of disposable labour, faced with dwindling natural resources, mass extinction and a collapsing biosphere. The wealthy will insulate themselves with luxury and private security, leaving the masses to deal with the fallout. Shit, that escalated quickly. About as quickly as the shrinking volume of sea ice in the Arctic. I don’t blame you for becoming a nihilist.

As long as underlying networks of lobbyists and power remain, fossil fuel companies will continue their warpath.
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