Congressman Krishnamoorthi Requests Information From Shell and BP Asking How Much They Receive In Tax Breaks As They Report Record Profits While Gas Prices Soar

SCHAUMBURG, IL – Today, Congressman Raja Krishnamoorthi wrote to the CEOs of Shell Oil Company and BP America Inc. asking for information on how much they receive in federal tax benefits and subsidies. As American families pay near-record prices at the pump, Shell reported $19.3 billion in profit in 2021, a 22% increase over 2019, while BP reported $7.5 billion in profit in 2021, a 87% 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 Shell and BP to explain the relationship between the generous tax subsidies they receive and the decisions they make regarding oil production that directly affect consumer 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 as well as his similar requests of Chevron and ExxonMobil.

Please find Congressman Krishnamoorthi's letter to Shell here.

Please find Congressman Krishnamoorthi's letter to BP here.