Senate Democrats revive effort to target oil, gas subsidies
Source: Hannah Northey, E&E reporter • Posted: Wednesday, August 5, 2015
Sen. Robert Menendez (D-N.J.), along with 18 Democratic co-sponsors, reintroduced the “Close Big Oil Tax Loopholes Act,” a bill that would target a variety of deductions for the five largest oil companies — BP PLC, Exxon Mobil Corp., Royal Dutch Shell PLC, Chevron Corp. and ConocoPhillips Co. — and use the revenue for deficit reduction.
But Menendez will face an uphill battle in a Republican-led Congress. The industry and its congressional supporters say the tax measures are standard business deductions available to most industries.
This isn’t the senator’s first attempt to slash subsidies for oil and gas companies. Menendez floated the same language in 2011, 2012 and 2013, but those measures were blocked by Republicans (E&E Daily, Feb. 14, 2013).
“As Republicans in Congress look in every direction for options to cut spending, they should take a look at this bill, support it, and stop giving away billions of taxpayer dollars to highly profitable — and often environmentally negligent — companies,” Menendez said in a statement. “It’s well past time Congress stands up for American families and stands up to Big Oil.”
Menendez said the bill would result in $22 billion in savings for deficit reduction over the next decade, noting that the nation’s five largest oil companies raked in nearly $1 trillion in profits over the past 10 years.
Among the industry benefits targeted by Menendez is a credit allowed on income taxes paid to a foreign government. The bill would also eliminate a deduction for intangible drilling costs, which include wages and the cost of supplies for drilling oil wells, and limit the deduction for income attributable to the production of oil and natural gas.
The legislation would also take aim at sections of the Energy Policy Act of 2005 — Sections 344 and 345 — that provide incentives and royalty relief for oil and gas production. Menendez said the bill’s changes would ensure Americans receive a “fair value for federally-owned fossil fuel resources.”
Co-sponsors are Sens. Ed Markey of Massachusetts, Sheldon Whitehouse and Jack Reed of Rhode Island, Jeff Merkley of Oregon, Barbara Mikulski and Ben Cardin of Maryland, Amy Klobuchar and Al Franken of Minnesota, Jeanne Shaheen of New Hampshire, Dianne Feinstein and Barbara Boxer of California, Debbie Stabenow and Gary Peters of Michigan, Patrick Leahy of Vermont, Chuck Schumer of New York, Bill Nelson of Florida, Patty Murray of Washington, and Dick Durbin of Illinois.