Casten, Blumenauer, McEachin, Porter Call on House Leadership to Pair Direct Cash Rebates for Consumers with Repeal of Oil and Gas Subsidies to Lessen Americans’ Pain at the Pump
Washington, DC (March 30, 2022) – Today, U.S. Representatives Sean Casten (IL-06), Earl Blumenauer (OR-03), Don McEachin (VA-04), and Katie Porter (CA-45) sent a letter to House leadership urging them to pair a direct cash rebate for consumers with a repeal of some of the hundreds of billions in direct and indirect tax subsidies flowing to oil and gas companies. A recent analysis by Accountable US found that oil and gas company giants Shell, Chevron, BP, Exxon posted record profits last year totaling $75 billion while American consumers struggled to pay heating bills & fill up their gas tanks. The subsidies repeal would serve as a pay-for for the rebate to raise tens of billions in revenue to lessen the pain American families feel at the pump. Earlier this Congress, the members introduced the End Oil and Gas Tax Subsidies Act.
Casten said, "Forcing taxpayers to subsidize an industry that's exploiting the war in Ukraine to rake in record profits as Americans struggle to make ends meet in the face of sky-high gas prices isn't just bad policy, it's antithetical to free-market capitalism. By pairing a direct cash rebate with a repeal of some of the $650 billion in tax subsidies flowing to oil and gas, we will lessen the pain American families feel at the pump, stop funding oil-rich autocrats, and insulate Americans against future energy price inflation accelerating our transition to clean, cheap American made energy."
Full text of the letter can be found here and below.
Dear Speaker Pelosi and Leader Hoyer,
As the House continues to pursue solutions to lower consumer gas prices, we have seen numerous policy proposals with the goal of providing immediate relief to our constituents. A rebate to consumers is among the best and most efficient tools we have to put more money back in the hands of Americans struggling to make ends meet in the face of high gas prices.
As we continue to study the most appropriate rebate mechanism, we encourage you to consider repealing some of the hundreds of billions in direct and indirect subsidies to oil and gas companies as a pay-for for the rebate to raise tens of billions in revenue to lessen the pain American families feel at the pump.
Big Oil's profiteering has hit a new high as they continue to hit record profits and take advantage of the tragic situation in Ukraine. Data from the past 15 years illustrate that 2021 was the highest year on record for dividend payouts from integrated oil companies based here in the United States, with companies like Exxon and Chevron averaging payouts of close to $12.5 billion[1]. The ability of these companies to pay out colossal dividends last year is evidence of how well oil and gas companies continue to perform in the market.
A recent analysis by Accountable.US found that oil and gas company giants Shell, Chevron, BP, and Exxon posted record profits last year totaling $75 billion while American consumers struggled to pay their heating bills and fill up their gas tanks. Combined, the four companies raked in $24.4 billion in quarter four of 2021, bringing their total profits for last year to over $75.5 billion. Chevron, Shell, BP, and Exxon used these bloated profits to shower billions onto their shareholders – including their wealthy executives whose salaries are heavily padded with stock options.[2] The record profits enjoyed by oil companies are proof that oil and gas producers can operate effectively in the market without government assistance. The money spent on unnecessary subsidies could be far better spent on efforts to shield the American people from the consequences of Putin's war against the Ukrainian people.
On March 26, 2021, the four signatories to this letter introduced H.R. 2184, the End Oil and Gas Tax Subsidies Act, which would eliminate nearly a dozen of the most egregious tax breaks enjoyed by the industry. The proposed eliminated subsidies account for billions in tax breaks annually, undermining our nation's ability to invest in renewable energy sources and damaging our environment. Fossil fuel companies may complain that subsidies are needed to keep prices down, but gas markets are global and a direct rebate would provide far more significant relief to our struggling constituents. Additionally, eliminating the subsidies would have the added benefit of preparing our country for a cleaner, safer, and cheaper green energy future which will prevent situations like this from happening again.
The League of Conservation Voters and Climate Power recently found that 61% of Americans say that America's continued dependence on oil is a major cause of rising gasoline prices today, and a similar majority want the President and Congress to take action to reduce our dependence on oil.[3] By ending subsidies to oil and gas producers, not only will we help American families who are hurting as a result of energy price inflation, but we will also set our country on a path towards true energy independence.
Thank you for the consideration,
Sean Casten, Member of Congress
Earl Blumenauer, Member of Congress
Don McEachin, Member of Congress
Katie Porter, Member of Congress
[1] Bloomberg L.P., "Oil Companies Net Income, Dividends Paid, Repurchase of Common Stock" Bloomberg 2022.
[2] "Big Oil Companies Net $75 Billion While Consumers Struggle", Accountable.US, February 9, 2022
[3] "Connecting with Voters on Gas Prices", Climate Power, March 15, 2022
https://climatepower.us/wp-content/uploads/sites/23/2022/03/Garin-Costs-and-Clean-Energy-Memo.pdf