BP

Claims Dept: Dole's votes on oil

ryanteaguebeckwith — Tue, 12 Aug 2008 10:45:40 -0400

Majority Action, a liberal 527 group created by two Democratic political consultants , is running a TV ad attacking U.S. Sen. Elizabeth Dole's record on oil issues.

What it says: The ad flashes corporate logos as ominous music plays and a narrator talks about Dole's record. "Chevron, $18.7 billion. BP, $20.8 billion. ExxonMobil, $40.6 billion. Big oil companies are making billions at our expense. And where has Elizabeth Dole been? In Washington, taking over a quarter-million in campaign cash from Big Oil and voting to give them billions more in tax breaks. Tell Elizabeth Dole we need lower fuel costs, not billions for big oil." Text on the screen reproduces phrases from two news articles: "Big Oil's Big Windfall ... a minimum of $7 billion and as much as $28 billion" and "$2.6 billion for oil and gas industries."

The background: Oil companies drilling on federal land typically pay a royalty fee.

In 1995, Congress created a royalty relief program for oil companies to spur production in the Gulf of Mexico. Waivers granted between then and 2000 added up to at least $7 billion in lost revenue for the federal government.

Dole was elected to the U.S. Senate in 2002.

As part of an omnibus energy bill in 2005, Congress extended some of the royalty relief provisions by another five years, but it cost far less than the previous measure. Dole voted for that bill.

Though an exact figure is not available, the Congressional Budget Office estimated that the extensions and several other provisions in the 2005 bill would cost the federal government about $200 million over the following five years.

(Update: The U.S. Department of the Interior says it has so far cost the goverment nothing.)

Apart from royalty relief, the 2005 energy bill included $2.6 billion in tax cuts for oil and gas companies, but it also included $2.9 billion in tax hikes — a net tax increase for the industry.

Congressional budget analysts say they do not consider the royalty relief program to be a "tax break," although it has a similar effect on the federal budget.

Dole has received $266,456 in campaign contributions from people associated with the oil and gas industry since 2002 and another $35,000 from oil and gas companies' political action committees, according to the Center for Responsive Politics.

Bill Buck, executive director of Majority Action, defended the ad, but did not offer any other specifics.

"We assert that Senator Dole voted for billions in tax cuts for the oil industry because it is true," he said in an e-mail to Dome.

Is the ad accurate? In large part, no. The ad does not back up its claim that Dole has given "billions ... in tax breaks" to oil companies. The $7 billion figure cited is wildly inaccurate, since it refers to legislation from before Dole's time in the Senate and is not even properly termed a "tax break." The $2.6 billion figure is also misleading, since it leaves out the offsetting tax hikes in that bill.

Correction: An earlier version of the post incorrectly described its founders.

This just in: Oil companies make money

ryanteaguebeckwith — Thu, 07 Aug 2008 13:31:24 -0400

Oil companies do indeed make billions of dollars.

A recent TV ad by Majority Action attacks U.S. Sen. Elizabeth Dole for receiving contributions from the oil industry, which notes that "big oil companies are making billions at our expense."

As part of our usual fact-checking duties here at the Dome, we checked the numbers mentioned in the ad, and they are mostly accurate.

For comparison's sake, the companies and their previous earnings are below, based on information from the U.S. Securities and Exchange Commission.

Chevron
2004: $13.3 billion
2005: $14.1 billion
2006: $17.1 billion
2007: $18.7 billion

BP
2004: $15.7 billion
2005: $19.6 billion
2006: $21.1 billion
2007: $21.2 billion

ExxonMobil
2004: $25.3 billion
2005: $36.1 billion
2006: $39.5 billion
2007: $40.6 billion

Note that the 2007 earnings we found are slightly higher for BP than the $20.8 billion cited by Majority Action. The ad cites a Feb. 6 article in the Charleston Post-Courier that we could not locate, although a report in the Houston Chronicle cites a similar number.

Claims Dept: Obama on gas prices

ryanteaguebeckwith — Tue, 15 Apr 2008 10:20:42 -0400

Democratic presidential candidate Barack Obama's latest ad focuses on high gas prices and energy indepenence, Rob Christensen reports.

What the ad says: "Since the gas lines of the ’70s, Democrats and Republicans have talked about energy independence, but nothing's changed — except now Exxon's making $40 billion a year, and we're paying $3.50 for gas. I'm Barack Obama. I don't take money from oil companies or Washington lobbyists, and I won't let them block change anymore. They'll pay a penalty on windfall profits. We'll invest in alternative energy, create jobs and free ourselves from foreign oil. I approve this message because it's time Washington worked for you. Not them."

The background: ExxonMobil reported earning a record $40.6 billion in profits in 2007. The average national cost of gas on April 7 was $3.33 per gallon, according to the Energy Information Administration.

It is technically true that Obama has not taken money directly from oil companies, because direct corporate contributions have long been banned.

But Obama's campaign has accepted $213,000 in contributions from people who work in the oil and gas industry or their spouses, according to the Center For Responsive Politics. And according to FactCheck.org, Obama's campaign has received money from executives of ExxonMobil ($30,850), Hess ($5,200), Shell ($9,900), ConocoPhillips ($4,300), Chevron ($9,500) and BP ($6,396.)

Obama's oil and gas industry contributions are a tiny fraction of the $193 million that Obama’s campaign has raised and are less than Clinton has brought in from similar sources.

Is the ad accurate? The assertion that Obama does not receive money from the oil industry is misleading. Accepting contributions from oil industry executives, as opposed to their political action committees, is a distinction without merit.