A closer look at 'subsidies' oil and gas tax breaks don't fit the definition.

• Author: Lewis, David

Type "Obama" and "oil subsidies" into Google, and you get 6,120,000 results. These include first-Googlepage headlines such as "Fossil Fuel Subsidies: Helping the Richest Get Richer," "Senate Republicans reject Obama call to end 'big oil' tax breaks," and "Obama's day: going after oil subsidies."

Take "Obama" out of the equation and your 17,200,000 results include Google-first-page headlines such as "History of U.S. Oil Subsidies Go Back Nearly a Century."

It's easy to conclude that, if indeed there is a national debate over oil industry tax breaks, the argument is over and the pro-oil side of the debate lost.

But, just for laughs, let's say there is a debate and let's set the terms of that discussion.

So let us define our terms: What is a subsidy? What is it the oil industry is getting from the federal government?

Among other things ("a sum of money formerly granted by the British Parliament to the crown ..."), Merriam-Webster defines "subsidy" as "a grant by a government to a private person or company to assist an enterprise deemed advantageous to the public."

And a "grant" is defined as "a gift (as of land or money) for a particular purpose."

So, is the oil industry receiving subsidies? Not according to the dictionary.

"What the president is talking about is tax breaks," says Encana Corp. spokesman Doug Hock. "We don't get subsidies like some of the renewables where they actually get cash money, and their product is subsidized in the market. We get tax breaks, and a lot of these are tax breaks that have been on the books for almost 100 years, things that are common to manufacturing industries."

A subsidy, or gift, is more akin to the $40 billion the Obama stimulus offered to clean energy companies such as Solyndra ("Clean and Economical Solar Power from Your Large Rooftop"), which received $535 million in loan guarantees and then suspended operations and filed for Chapter 11 bankruptcy. Next, the government paid the company's creditors the $535 million.

What the oil and gas exploration and production industry receives thus is not a subsidy at all, but various tax treatments.

(For a remarkable discussion of these points, see the Wikipedia entry, "Energy subsidies," which cites studies from the World Bank, the World Resource Institute, the Environmental Law Institute, the European Environmental Agency, the Union of Concerned Scientists and others to produce a one-sided view of the subject.)

With so much obfuscation, propaganda and...