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EV Policy & Politics

Fossil Fuel Industry Running Scared About Losing Subsidies

Originally by NRDC

by Sujatha Bergen 

Damning new evidence confirms, clear as day, the fossil fuel industry’s dirty dealing: Exxon lobbyists, working behind the scenes to sabotage action to combat climate change. That’s what a new video published by Greenpeace UK features. Dan Easley, a former top lobbyist for the multinational oil company highlights the proposal to eliminate ‘favorable tax treatment’ for the fossil fuel industry as a top concern for the company.

That’s a huge acknowledgment. The oil and gas industry has always denied it enjoys special giveaways in the U.S. tax code—see, most recently, the American Petroleum Institute’s testimony at a Congressional hearing chaired by Rep Rho Khanna (D-CA) and its denial on Twitter.

 

President Biden’s FY 2022 Budget and a bunch of legislative proposals aim to eliminate $120 billion in tax giveaways over the next ten years. Top cuts include:

  1. Repealing a $84.7 billion tax giveaway on foreign oil and gas drilling established under the Trump Administration that directly benefits Exxon and other major oil and gas companies.
  2. Eliminating a provision worth approximately $10.5 billion created more than a century ago that allows fossil fuel companies to immediately deduct much of the cost of exploring for and developing an oil well.
  3. Closing a loophole that allows oil and gas companies to deduct 15 percent of their income from production. Valued at $9 billion over ten years, this giveaway allows many independent oil and gas companies to regularly deduct more money than a well is worth. Again, enriching polluters.

Mr. Easley’s admission that Exxon benefits directly from special tax considerations and admissions that Exxon deploys underhanded tactics to undermine action on climate change are a call to action. Congress should act immediately to close loopholes that help the fossil fuel industry extract polluting oil and gas that damages the planet and threatens communities. In addition to lining the coffers of fossil fuel companies, the subsidies distort the market for fossil fuels and artificially incentivize investment in these outdated and destructive technologies. 

It is well past time for Congress to stand up to Exxon and the fossil fuel lobby and eliminate tax giveaways to oil, gas, and coal companies once and for all.

 
Written By

EXPERT BLOG @ NRDC The latest opinion and analysis from NRDC’s science, legal, and policy experts.

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