DNC - Senator McCain Watch: Big Oil Rewards Big Shift on Offshore Drilling

The McCain Energy Plan: $4 Per Gallon for Americans, $4 Billion For Big Oil

Washington, DC - The McCain campaign spent yesterday fielding tough questions about Senator McCain's shift on offshore drilling after an article in the Washington Post exposed a dramatic increase in donations from the oil and gas industry to McCain following his reversal to join Bush in supporting offshore drilling.

Like Bush, McCain lets special interests drive his campaign - and his policy. Last month McCain received three times as much in campaign contributions from oil and gas industry executives and employees after the date of his reversal on offshore drilling, June 16, as in the first part of the month. Altogether McCain took $1.1 million in contributions from oil and gas industry donors in June. That means McCain received nearly twice as much in donations from the oil and gas industry last month than in the previous three months combined.

McCain will reward his Big Oil donors with a set of same-as-Bush policies that will boost corporate profits while doing nothing to lower Americans' gas prices in the short term. McCain's tax plan would give $4 billion in breaks to the top five oil companies -- and almost nothing to middle-class Americans. Big Oil wants to drill offshore, but it won't produce a drop of oil for seven years and won't help today's consumers at the pump. Finally, McCain's gas tax "holiday" proposal would mean that funds slated to create thousands of American jobs repairing roads and bridges around the country will disappear into the pockets of Big Oil. Instead of long-term solutions, McCain offers only short-term gimmicks and more of the same failed Bush policies that put corporate interests ahead of Americans' interests.

Like Bush, McCain caters to Big Oil even as Americans pay more than $4 a gallon for gas.


McCain Received $1.1 Million in Oil and Gas Money in June.
Oil and gas industry executives and employees donated $1.1 million to McCain last month -- three-quarters of which came after his June 16 speech calling for an end to the ban -- compared with $116,000 in March, $283,000 in April and $208,000 in May. [Washington Post, 7/27/08]

Gas Tax Holiday Would Cost Federal Government $9 Billion.
"Despite calls from the presidential campaign trail for a Memorial Day-to-Labor Day tax freeze, lawmakers quickly concluded -- with a prod from the construction industry -- that having $9 billion less to spend on highways could create a pre-election specter of thousands of lost jobs." [AP, 7/19/08]

Tax Policy Center Says McCain Gas Tax Cut Would Boost Profits for Oil Companies.
The Urban Institute and Brookings Institution's "Tax Policy Center" responded to McCain's proposal to temporarily cut the excise tax on gasoline a "stupid tax trick" and "empty rhetoric" that was "disappointing."  Citing economic principles of supply and demand, the policy center noted that "refineries run at capacity" during the summer and said that since the lower price on gas are just going to make people drive more, the subsequent increase in quantity of demand drives up prices and only rewards the producers of petroleum. "Higher prices might stimulate a little more production and we might import more gasoline from our neighbors. But the price will have to increase by almost the amount of the tax cut.  Otherwise, there will be shortages.  Unless the plan's aim is to boost short-term profits for petroleum refineries, the proposal makes no sense. [Tax Policy Center, Urban Institute and Brookings Institute, 4/15/08, http://taxvox.taxpolicycenter.org/blog/_archives/2008/4/15/3641270.html]

WSJ: Oil Industry Has "Coveted" Off-Shore Drilling "For Years."
"Nonetheless, the industry has for years coveted the potential energy reservoirs hidden beneath federal waters. By broad government calculations, there are 86 billion barrels of oil in offshore waters, with about 18 billion barrels of that located in areas now off-limits. The greatest prize based on sheer volume is believed to be in the waters off the coast of Southern California, which is estimated to hold 5.6 billion barrels of oil and 10 trillion cubic feet of natural gas. The eastern and central Gulf of Mexico are believed to hold 3.7 billion barrels of oil and 21.5 trillion cubic feet of gas. Experts believe there are smaller caches off the Atlantic seaboard and further up the Pacific coast." [Wall Street Journal, 6/19/08]

McCain Called For Lifting The Federal Moratorium On Offshore Drilling. 
During a speech on energy, McCain said, "But a broad federal moratorium stands in the way of energy exploration and production. And I believe it is time for the federal government to lift these restrictions and to put our own reserves to use. We can do this in ways that are sensible standards of environmental protection. And in states that choose to permit exploration, there must be an appropriate sharing of benefits between federal and state governments. But as a matter of fairness to the American people, and a matter of duty for our government, we must deal with the here and now, and assure affordable fuel for America by increasing domestic production."  [Speech, johnmccain.com, 6/17/08]

Houston Chronicle: McCain Trying to "Make Amends With Texas Energy Producers" With Support for an End to Moratorium on Offshore Drilling.
The Houston Chronicle Reported, "Republican presidential candidate John McCain, seeking to make amends with Texas energy producers who did not support him during the 2008 GOP primary season, said Monday he wants to end a federal moratorium on offshore drilling and create "additional incentives" for states to approve new exploration ventures." [Houston Chronicle, 6/17/08]

  • 1999: McCain, Campaigning In California, Endorsed A Moratorium On Offshore Oil Drilling. "For a moment, Republican presidential hopeful John McCain almost sounded like a San Francisco liberal. The Arizona senator said yesterday that gays and lesbians would be welcome to serve in his administration. He decried the influence of money in politics. He endorsed a moratorium on offshore oil drilling." [San Francisco Chronicle, 7/29/99]
  • 1999: McCain Supports The Current Moratorium On Oil Drilling. "In response to a query of the candidates, Gore and Bradley promised to support the existing moratorium, in addition to opposing the leases. Both also say they will work with the seven oil companies holding leases to find alternatives to drilling. That could mean canceling the leases, or buying out the companies in a deal like the one that secured the Headwaters  Forest. McCain supports the current moratorium, but hasn't decided on the pending leases. Steve Forbes hasn't replied to questions about oil drilling." [Ventura County Star, 11/15/99]

McCain's Tax Plan Would Save Largest American Oil Companies Nearly $4 Billion. According to the Center For American Progress, "The centerpiece of Sen. McCain's plan to stimulate the economy -- actually, the whole plan -- is large tax cuts for corporations. It would deliver $3.8 billion in tax cuts to the five largest American oil companies, according to an analysis released today by the Center for American Progress Action Fund." According to the Center For American Progress' Analysis, Exxon/Mobil would save as much as $1.2 Billion under McCain's corporate tax cut. [Wonk Room, Thinkprogress.org, 3/27/2008]