When I read State Rep. Duane Ankney’s letter on lack of tax incentives to the fossil fuel industry, the first thing I thought was, “Huh?” (See “Letters,” Jan. 23.) An Internet search showed how complicated this topic is. Still, it’s clear the fossil fuel industry—oil, gas and coal—has benefited more than any other energy source. In the 60 years from 1950 to 2010, fossil fuels reaped about $600 billion or 70 percent of total energy industry incentives, compared to 9 percent for renewables. While incentives for fossil fuels are mainly permanent provisions written into the tax code, those for renewables are time-limited initiatives. This unleveled playing field creates artificially low fossil fuel prices.
Montana also offers its own subsidy, an 18-month oil and gas tax holiday for new wells. Industry pays no taxes when wells are most productive, and communities like Sidney are straining under infrastructure, education, law enforcement and other demands during the boom. Sen. Christine Kaufman, D-Helena, introduced SB 295, which would have removed the tax holiday, and directed the roughly $35 million annually to community oil and gas impact relief and a renewable resources trust fund. Republicans killed it in committee. Instead, they passed SB 396, diverting U.S. mineral royalties from federal lands to an oil and gas impact fund, reducing our general revenue fund by $10 million annually.
Add to this the portending legacy of abandoned wells. In fossil fuel friendly Wyoming, companies are writing off low reclamation bonds, leaving the state to pick up the tab, estimated at $30,000 per well. Ridiculously, Montana’s bonds are even lower with less incentive to reclaim wells. If you like Montana’s dubious distinction as home to the Berkeley Pit, our nation’s largest superfund site, you’ll love it when taxpayers pick up the tab for cleaning our groundwater, without benefit of the tourist attraction.