Congressman Krishnamoorthi Requests Information From ExxonMobil And Chevron Asking How Much They Receive In Tax Breaks As They Report Record Profits While Gas Prices Soar

SCHAUMBURG, IL – Yesterday, Congressman Raja Krishnamoorthi wrote to the CEOs of Chevron and ExxonMobil asking for information on how much they receive in federal tax benefits and subsidies. As American families pay near-record prices at the pump, ExxonMobil reported $23 billion in profit in 2021, a 60% increase over 2019, while Chevron reported $15.6 billion in profit in 2021, a 437% increase over 2019. At the same time, the Congressman noted that each year these companies also receive $12 to $19 billion dollars in tax subsidies from the federal government, ranging from the tax exemption on Foreign Oil and Gas Extraction Income (FOGEI) to the Last-In, First-Out (LIFO) accounting method.

While requesting detailed information from the two oil giants' CEOs on the subsidies their companies receive from taxpayers, Congressman Krishnamoorthi questioned the benefits that fossil fuel subsidies provide to consumers more broadly:

These tax subsidies exist to incentivize and support oil and gas extraction and, ultimately, reduce retail gasoline prices for the American consumer. However, recent modelling by researchers at the Stockholm Environment Institute and Earth Track has found that the impact of these subsidies on oil production and oil prices is limited, even more so when oil prices are high, as they are now, and new oil wells have a high expected rate of return. This confirms the previous findings of former Deputy Assistant Treasury Secretary for Environment and Energy, Gilbert Metcalf, who concluded that ending subsidies for fossil fuel companies would have a minimal effect on oil production and global oil prices.

In light of these analyses, the Congressman asked Chevron and ExxonMobil to explain the relationship between the generous tax subsidies they receive and the decisions they make regarding oil production that directly affect consumer prices:

With this in mind, please explain your company's methodology for determining the cost-benefit of new capital expenditure on oil and gas production and how federal tax subsidies affect these decisions. Please list new capital expenditure projects in Q3 and Q4 2021 in the U.S. and around the world that would not have been undertaken if Chevron did not receive these federal tax subsidies. Please explain why each of these projects is dependent on federal tax subsidies. Finally, please explain how these tax subsidies affect oil prices and retail gasoline prices.

These letters follow Congressman Krishnamoorthi's parallel letter to the U.S. Energy Information Administration requesting federal data on the scale of U.S. subsidies to fossil fuel companies and the savings produced for consumers.

Please find Congressman Krishnamoorthi's letter to Chevron here.

Please find Congressman Krishnamoorthi's letter to ExxonMobil here.