Quantcast

Big Oil, Big Profits, Big Tax Breaks

Energy

By Daniel J. Weiss and Tiffany Germain

Once again, it’s been a good quarter for Big Oil. The big five oil companies—BP, Chevron, ConocoPhillips, ExxonMobil and Shell—reported $23 billion in combined profits for their third quarter of 2013. That’s $175,000 per minute. Together, these five companies earn more in one minute than 95 percent of Americans earn in a year. These profits were slightly lower this third quarter compared to 2012, primarily due to lower (but not low) oil and gasoline prices. Gasoline averaged $3.63 per gallon in the first 10 months of 2013, slightly less than last year’s record of $3.68 per gallon.

Even though profits were lower, the big five companies continue to enrich their largest shareholders and senior executives by using a large share of profits to buy back their own stock. This past quarter, the combined buybacks of the companies (save ConocoPhillips) were nearly $10 billion, or 43 percent of the four companies’ total profits. In addition, these five companies are sitting on more than $71 billion in cash reserves.

Big Oil is swimming in an endless river of profits and continues to invest millions of dollars to lobby Congress against eliminating their special tax breaks. Environment & Energy Daily reported on Oct. 30 that:

Oil and natural gas lobbyists have spent more than a year urging lawmakers to maintain targeted tax breaks for extracting and transporting their products, but there are signs of a growing fear within the industry that impending legislation to overhaul the tax code for the first time in a generation would eliminate most of those incentives in order to lower the top-line rate paid by all companies.

Environment & Energy Daily noted that House Ways and Means Chair Dave Camp’s (R-MI) tax reform bill could “completely eliminate the so-called Section 199 manufacturing credit, which applies to oil and gas producers along with a variety of other U.S. manufacturers.”

This tax credit was designed to encourage manufacturers to keep their factories in the U.S. This incentive should not apply to oil and gas production since oil and gas fields cannot move overseas. In fact, the Congressional Joint Committee on Taxation estimated that this special tax break accounts for $14 billion—or nearly 60 percent—of the $24 billion in tax breaks that the big five companies will receive over the coming decade.

The committee also reported that foreign tax credit deduction and deduction for intangible drilling costs, will save the big five oil companies $7.5 billion and $2 billion, respectively, over the coming decade.

The big five oil companies spent a total of $33 million lobbying through the third quarter of 2013. While this may seem like a lot of money, it is actually quite a good investment. If the big five successfully retain their tax breaks, they will save $73,000 on their taxes for every $1 spent on lobbying.

The Senate and House Budget Committees will meet between now and Dec. 13 to attempt to arrive at a consensus deficit reduction package. Stripping the tax code of these special Big Oil tax breaks for these five companies that earned $72 billion so far in 2013 would provide $24 billion of revenue. This is revenue that might otherwise be cut from cancer research, Head Start, food stamps or other vital middle- and lower-income programs. Eliminating special tax breaks for the big five oil companies would protect vital investments for our health, safety and prosperity.

Visit EcoWatch’s ENERGY page for more related news on this topic.

——–

EcoWatch Daily Newsletter

Pick one of these nine activism styles, and you can start making change. YES! Illustrations by Delphine Lee

By Cathy Brown

Most of us have heard about UN researchers warning that we need to make dramatic changes in the next 12 years to limit our risk of extreme heat, drought, floods and poverty caused by climate change. Report after report about a bleak climate future can leave people in despair.

Read More Show Less
Jamie Grill Photography / Getty Images

Losing weight, improving heart health and decreasing your chances for metabolic diseases like diabetes may be as simple as cutting back on a handful of Oreos or saying no to a side of fries, according to a new study published in the journal The Lancet Diabetes & Endocrinology.

Read More Show Less
Sponsored
Golde Wallingford submitted this photo of "Pure Joy" to EcoWatch's first photo contest. Golde Wallingford

EcoWatch is pleased to announce our third photo contest!

Read More Show Less
A boy gives an impromptu speech about him not wanting to die in the next 10 years during the protest on July 15. The Scottish wing of the Extinction Rebellion environmental group of Scotland locked down Glasgow's Trongate for 12 hours in protest of climate change. Stewart Kirby / SOPA Images / LightRocket / Getty Images

It's important to remember that one person can make a difference. From teenagers to world-renowned scientists, individuals are inspiring positive shifts around the world. Maybe you won't become a hard-core activist, but this list of people below can inspire simple ways to kickstart better habits. Here are seven people advocating for a better planet.

Read More Show Less
A group of wind turbines in a field in Banffshire, Northeast Scotland. Universal Images Group / Getty Images

Scotland produced enough power from wind turbines in the first half of 2019, that it could power Scotland twice over. Put another way, it's enough energy to power all of Scotland and most of Northern England, according to the BBC — an impressive step for the United Kingdom, which pledged to be carbon neutral in 30 years.

Read More Show Less
Sponsored
Beekeeper Jeff Anderson works with members of his family in this photo from 2014. He once employed all of his adult children but can no longer afford to do so. CHRIS JORDAN-BLOCH / EARTHJUSTICE

By Jessica A. Knoblauch

It's been a particularly terrible summer for bees. Recently, the U.S. Environmental Protection Agency (EPA) announced it is allowing the bee-killing pesticide sulfoxaflor back on the market. And just a few weeks prior, the USDA announced it is suspending data collection for its annual honeybee survey, which tracks honeybee populations across the U.S., providing critical information to farmers and scientists.

Read More Show Less

tommaso79 / iStock / Getty Images Plus

By Rachel Licker

As a new mom, I've had to think about heat safety in many new ways since pregnant women and young children are among the most vulnerable to extreme heat.

Read More Show Less
Pexels

By Kris Gunnars, BSc

It's easy to get confused about which foods are healthy and which aren't.

Read More Show Less