What are the pros and cons of subsidizing oil companies?

Question

I have a bad feeling about the issue due to the extraordinary profits in this oligopolistic industry but have not actually done any analysis on the topic.

So I'd appreciate hearing reasons why such subsidies do/do not make sense (or how they make sense in some ways but not in others).

Thanks.

(I'm asking this in both Economics and Current Events to see if I get different answers.)

Answer 1

I don't think anyone is saying it's a good idea to subsidize oil companies or suggesting that anyone do so. To what does your question refer?

Answer 2

Pro:  good for economic growth.  One of the things fueling (no pun intended) the growth in China and India is cheap, govt' subsidized oil prices.   (Much like one of the things fueling America for the last 40 years has been cheap, gov't subsidized food, much of which is produced using, you guessed it, oil.)  This assumes oil companies pass the savings on to consumers, which the gov't can pressure them to do.

Con:  People use more oil, which further increases our dependancy on fossil fuels, wrecks the environment, etc.

Answer 3

The oil companies get their rewards at the gas pump.  Why would we want to subsidize them?  Just let them go get the oil and gas for use without unreasonable barriers, and leave it alone.

Answer 4

Pros would be to encourage searching for oil reserves, even in times of low oil prices, which probably keeps oil prices from being as high as they could be

Cons: obviously it encourages our reliance on fossil fuels (which has a number of cons itself), stifles research into alternative energy, completely useless in times of high prices, increases the deficit, epitomizes interest-based politics

I really had to stretch to think of a pro, because I think it's a horrible idea in any case, especially now.  Then again, I'm against most industrial subsidies.

Answer 5

Just read all of the stupid replys that you will get....corporate welfare.facism,.republican agenda...any thing you can call it....its a stupid idea to subsidize these oil co.