Face it: There's no free market for energy

2012-03-30T09:17:00Z 2012-03-30T10:57:09Z Face it: There's no free market for energyBy Jeremy Fugleberg, Star-Tribune energy reporter Casper Star-Tribune Online

Face it: There's no free market when it comes to energy.

Wind and solar energy producers get a break on their taxes, yes. But so do oil and natural gas producers.

If you don't think so, you clearly haven't looked at the tax code recently. You'll find credits and deductions for nearly every type of energy under the sun (including the sun).

Critics of others' policies often decry the picking of winners and losers through tax and other policy. But nearly everyone who can change the federal tax code does that.

Face it: you push for the world you want through the way things are taxed.

Don't be ashamed. Everyone does it.

For some, that means boosting help for oil and gas producers by tax policies that encourage them to explore more land and take the chance they'll drill a dry hole.

For others, that means giving wind producers a helping hand so that more wind turbines pump additional megawatts into the power grid.

This issue came up recently when I was talking to Chuck Harkins, a Casper-based accountant with lots of small Wyoming oil and natural gas operators as clients, about the Obama Administration's likely changes to tax policy for the oil and gas industry.

Obama has targed Big Oil -- the large, integrated multi-national companies such as Exxon Mobil, ConocoPhillips and BP -- in his recently unveiled budget and in speeches across the country. In his latest budget proposal, he aims to eliminate a range of tax breaks he says would bring in nearly $40 billion in new tax revenue over the next decade.

But from my discussion with Harkins, it seems that some of those changes would also hurt what you could call Small Oil -- relatively small, independent operators who are often willing to take more risk and are often the first to discover new sources oil and gas fields. Some of the changes would specifically target those producers, hitting subsidies given only to small producers.

Still, those changes would likely save the government money, and let's be honest: those producers aren't always exactly small mom-and-pop firms struggling to make a buck.

But those firms do indeed get help from the federal government through tax policy.

Of course, you can certainly suggest cutting all help for everyone. That's a tough sell with a tax code that is a mashup of each generation's attempt to promote the latest great idea of how the world should be.

So for the sake of argument, let's assume you think some types of energy are worth helping through tax policy. What kind of world do you want? What kind of energy do you think is best?

Tell me that, and I can probably tell you what kind of tax subsidies -- usually credits or deductions -- you think are worth giving out, and those you think are a waste of taxpayer money.

As Harkins told me: "Everybody wants change, until it affects them personally."

So tell me your idea of good tax breaks. Tell me why they're needed, why they're better than those given to those other guys and worth it to taxpayers.

That's the more honest discussion. One that gets lost in the name calling and claims to the capitalist moral high ground of the free market. Let's hope we hear it.

I hope I hear more of such discussion, and people like Harkins provide a good perspective on why taxes are the way they are.

Copyright 2015 Casper Star-Tribune Online. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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