Amid Rampant Price Gouging, Pascrell Demands Answers from 11 Oil Executives

“Unpatriotic and unconscionable” profiteering as billion dollar revenues are siphoned overwhelmingly to executives and shareholders

WASHINGTON, DC – Amid rampant price gouging of American drivers during Vladimir Putin’s illegal invasion of Ukraine and failure to meet surging post-pandemic demand, U.S. Rep. Bill Pascrell, Jr. (D-NJ-09), the Chairman of the House Ways and Means Subcommittee on Oversight, today sent urgent inquiries to heads of the 11 oil and gas companies with revenues over one billion dollars demanding answers on their executive profiteering, corporate stock buybacks, and enjoyment of U.S. tax benefits.

“While it is bad enough American drivers are facing record high gas prices as Vladimir Putin conducts an illegal invasion of Ukraine, it is unpatriotic and unconscionable for any corporation to use the ongoing conflict as cover to gouge drivers even more. Consequently, as Chairman of the Ways and Means Subcommittee on Oversight, I write to inquire whether [your company] is using federal tax benefits and manipulating our tax laws to reward shareholders with large dividends and stock buybacks, while pocketing record profits and simultaneously jacking up gas prices for American drivers,” Chairman Pascrell writes separately to 11 oil executives.

At a time of record profits for the oil and gas industry, Pascrell believes American taxpayers are entitled to know how much money these massive companies receive under special oil and gas provisions of the tax code as well as the tax cuts and other corporate-friendly changes made by the Republican Tax Cuts and Jobs Act of 2017.

Chairman Pascrell’s inquiries were sent to Royal Dutch Shell CEO Ben van Beurden, British Petroleum CEO Bernard Looney, Exxon Mobil CEO Darren Woods, Equinor CEO Anders Opedal, Enbridge CEO Al Monaco, Chevon CEO Michael Wirth, Marathon Petroleum CEO Michael Hennigan, ConocoPhillips CEO Ryan Lance, Pioneer Natural Resources CEO Scott Sheffield, Devon Energy CEO Rick Muncrief, and APA CEO John Christmann.

In the first three quarters of 2021, the 24 top oil and gas companies around the world made a combined $174 billion in net income. Since that time, average retail gasoline prices have steadily risen from around $2 per gallon in December 2020 to approximately $4.10 per gallon in March 2022.

Copies of Chairman Pascrell’s letters are available here, and text of his letter is below.

March 10, 2022

Dear NAME,

While it is bad enough American drivers are facing record high gas prices as Vladimir Putin conducts an illegal invasion of Ukraine, it is unpatriotic and unconscionable for any corporation to use the ongoing conflict as cover to gouge drivers even more. Consequently, as Chairman of the Ways and Means Subcommittee on Oversight, I write to inquire whether COMPANY is using federal tax benefits and manipulating our tax laws to reward shareholders with large dividends and stock buybacks, while pocketing record profits and simultaneously jacking up gas prices for American drivers.

In the first three quarters of 2021, the 24 top oil and gas companies around the world made a combined $174 billion in net income, with COMPANY raking in NUMBER. Since that time, average retail gasoline prices have steadily risen from around $2 per gallon in December 2020 to approximately $4.10 per gallon in March 2022.^[i] As these record profits for your company occurred, I understand in 2020 your compensation was at least NUMBER and that your company has engaged, or has made plans to engage, in massive stock buybacks and shareholder dividend increases.

The Biden administration has estimated that ending current tax credits, deductions and other special provisions that are targeted towards encouraging oil, gas, and coal production would generate an additional $35 billion in federal tax revenue over the 10-year budget window.^[ii] Under broader corporate and international tax reform, the Biden administration has also proposed modifications to the tax treatment of foreign fossil fuel income that is estimated will generate an additional $86.2 billion over the 10-year budget window. The Biden administration has also ensured federal policies are not limiting our energy production within the United States by approving essential domestic production permits. At a time of record profits for the oil and gas industry, American taxpayers are entitled to know how much benefit COMPANY receives under special oil and gas provisions of the tax code as well as the tax cuts and other advantageous changes made by the Tax Cuts and Jobs Act of 2017(TCJA).

To better understand how COMPANY benefits from the federal tax code while refusing to increase production or reinvest profits to meet the expected energy demand from society’s reemerging from COVID-19, please respond to the following questions by DATE:

• Please detail the federal oil and gas tax incentives COMPANY has received for the last decade. Please include the total value for each fiscal year for each of the following tax incentives, if applicable:

(1) the enhanced oil recovery credit for eligible costs attributable to a qualified enhanced oil recovery project;

(2) the credit for oil and gas produced from marginal wells;

(3) the expensing of intangible drilling costs;

(4) the deduction for costs paid or incurred for any tertiary injectant used as part of a tertiary recovery method;

(5) the use of percentage depletion with respect to oil and gas wells;

(6) expensing of exploration and development costs;

(7) percentage depletion for hard mineral fossil fuels;

(8) capital gains treatment for royalties;

(9) the Oil Spill Liability Trust Fund excise tax exemption for crude oil derived from bitumen and kerogenrich rock; and

(10) accelerated amortization for air pollution control facilities.

• Please provide total investment in additional oil and gas production that COMPANY has undertaken in the past ten years.

• Please detail what tax savings the TCJA conferred on  COMPANY. Has COMPANY engaged in stock buy backs or dividend increases since the enactment of TCJA and if so, how do they compare to such activity prior to TCJA, going back ten years?  If so, please detail the value of each for each fiscal year.

• Please outline if COMPANY has lobbied the federal government for policies to lower its taxable income or incentivize buy backs. If so, please quantify the amount spent.

• Please confirm and detail your total compensation for each of the past ten fiscal years.

• Please confirm if your company has ceased all operations and divested of all financial interests in Russia. If not, please explain.

• How has your company invested in renewable resources to ensure a global commodity controlled in part by foreign nations and their leaders is not abused as an economic weapon? How much has your company invested?

As the Ukrainian people suffer grievously from Russian aggression, and Americans finally begin to resume their ordinary lives, this is a particularly egregious moment for big businesses to gouge their customers to reward COMPANY’s executives and investors. No firm should be profiteering during Europe’s darkest hour since 1945. Therefore, I look forward to your prompt response and working together to ensure COMPANY is not using Putin’s illegal war as an excuse for anti-social and immoral corporate behavior. Thank you for your urgent attention to this matter.

Sincerely,

[i] https://www.eia.gov/petroleum/gasdiesel/

[ii] https://home.treasury.gov/system/files/131/General-Explanations-FY2022.pdf