Big Oil expected to claim $1.5 billion in tax breaks in Coronavirus scam
Big Oil is reaping major benefits from the large corporate tax cuts that were passed as part of the coronavirus stimulus, according to a recent report from Friends of the Earth. At least 12 oil and gas companies are expected to claim a total $1.5 billion in tax breaks, according to a review of over 40 quarterly filings.
By Dan Bacher
“This windfall is due primarily to changes to net operating losses and the alternative minimum tax (AMT) that Republicans in Congress snuck through under the pretext of coronavirus aid. The report hows that tax policy was the oil and gas industry’s main priority in stimulus negotiations,” the group reported.
In response to the report, Friends of the Earth senior policy analyst Lukas Ross issued the following statement: ”Trump’s Big Oil bailout is no longer a threat on the horizon, it is an inarguable fact. Republicans in Congress are apparently perfectly fine with polluters cashing refund checks while nurses work without PPE gear. These corporate tax cuts must be repealed, and the fossil fuel industry must be barred from accessing future stimulus funds.”
The topline findings indicate:
- Refining giant Marathon Petroleum is expecting $411 million in tax benefits as a result of changes to net operating losses alone.
- Occidental Petroleum (California Resources Corporation), the fourth largest oil company in the US whose debt was recently downgraded to junk, is expecting a $195 million “cash refund” as a result of changes to the AMT and net operating losses.
- EQT, the largest producer of natural gas in the US, is expecting changes to the AMT to increase its “collected, expected refund” in 2020 by $94.8 million.
- Devon and EOG, two of the largest fracking companies in the US, are expecting tax benefits of $105 million and $150 million, respectively.
- Many other shale companies, including Pioneer and Continental, report continuing to monitor the stimulus tax cuts, indicating that benefits could be claimed later.
- The full list of beneficiaries is available here.
CONCLUSIONS AND RECOMMENDATIONS:
“The original coronavirus stimulus was passed quickly and in an emergency,” stated Ross. “As additional legislation to address the crisis is considered, it is important for Congress to both prioritize still unmet human needs while correcting previous mistakes. Much more work needs to be done, both to support workers and families in the face of COVID-19 and to prevent runaway bailout of the fossil fuel industry. Congress cannot afford to wait. As it returns to work and begins to develop the next relief package, it must:
- Prioritize direct aid to workers and communities on the frontlines of the crisis.
- Support the ReWIND Act from Senator Merkley and Representative Barragan, the most comprehensive anti-bailout legislation to date. It would stop fossil fu- els from gaining access to stimulus lending, eliminate royalty relief, and ban additional purchases into the Strategic Petroleum Reserve.
- Repeal the tax breaks provided to Big Oil in the last package.
- Allow the 45Q tax credit to expire and do not include it as a trade in forthcoming stimulus packages.”
For more information, read the recent report from Friends of the Earth, “Cashing in on COVID: Tax Breaks, Royalties and Stimulus Loans.”