An Exxon mobile gas station in Gutenberg N.J.(Kena Betancur / VIEWpress / Corbis / Getty Images)
Progressives in and out of Congress are leading a push to eliminate all subsidies for the fossil fuel industry, making a repeal of these multibillion-dollar giveaways a red line in the upcoming budget reconciliation package, the larger spending bill aimed at implementing most of President Joe Biden’s agenda. Environmentalists and left-leaning congressional Democrats are especially motivated to take on the oil and gas industries after a covertly recorded video, made in a Greenpeace sting this May, caught ExxonMobil lobbyists boasting about their efforts to sabotage climate initiatives in Washington.
Top Exxon lobbyist Keith McCoy bragged about having weekly access to West Virginia Senator Joe Manchin’s staff, named 10 other senators who have been “crucial” to watering down Biden’s infrastructure package, and made remarkably candid comments about how capitalism and Exxon’s profit-seeking caused a global calamity. The other lobbyist in the undercover video, Dan Easley, also touted the oil giant’s relationship with the Trump administration, describing how they worked together to protect profits, specifically pointing to their “preferential tax treatment,” or subsidies.
Washington Representative Pramila Jayapal, chair of the Congressional Progressive Caucus, says that ending fossil fuel subsidies is a “top five priority” for progressive lawmakers, alongside other “really bold action” on climate. “Now, you know this, every year the United States government gives away $20 billion to the fossil fuel industry in the form of these tax breaks, incentives, other subsidies, all for an industry that made $28 billion in profits just in 2018 alone,” she said during a recent Zoom session with Our Revolution. “So it’s a huge waste of taxpayer money and it is so harmful to our climate.”
This week, House Democrats Ro Khanna and Ilhan Omar led a letter to Democratic leadership demanding that the repeal of fossil fuel subsidies be included in any infrastructure package, according to a copy obtained by The Nation. “We should not fall for the industry myth that these subsidies are necessary for good job creation,” they wrote. “Despite the fact that big fossil fuel companies claimed $8.2 billion in 2020 from the CARES Act pandemic relief bill, the industry still laid off 16 percent of their workforce.”
More than 500 groups have also rallied around securing the elimination of fossil fuel subsidies and other giveaways to the industry in upcoming legislative packages. “There are a handful of representatives from oil-heavy districts, but there are many more moderates who don’t have a stake in the fossil fuel industry,” Friends of the Earth Program Manager Lukas Ross said. “Voting against fossil fuel subsidies should not be difficult for any member of the Democratic Party.”
President Biden has repeatedly expressed support for ending fossil fuel subsidies. It’s part of the tax reform section of his American Jobs Plan, and in his budget for Fiscal Year 2022 he proposed repealing a slew of tax benefits for the oil and gas industry, including the expensing of intangible drilling costs, the credit for oil and gas produced from marginal wells, and enhanced oil recovery credit, to name a few. But he’s been relatively quiet on the issue now that negotiations are underway, worrying some progressives and environmental groups who fear he may be going back on his promise.
In a recently leaked White House memo on climate priorities, the Biden administration commits to advancing a handful of market-based climate initiatives through the filibuster-proof package, but makes no mention of fossil fuel subsidies. Climate advocates also note that Biden’s support for extending subsidies to companies that implement carbon capture and storage still ends up giving the industries the same government assistance he claims to oppose.
“Biden should reassure progressives by screaming from the rooftops that fossil fuel subsidies must be repealed,” Ross said. “To ensure the commitments he made in the campaign trail, the commitments he made in the original outline of the American Jobs Plan. This is a long-standing position for Joe Biden; he should not run from it now.”
The Exxon revelations were shocking, in large part, because the public rarely hears the unfiltered thoughts and strategies of top corporate lobbyists. But their admissions, specifically those about targeting Democratic senators to defang the bipartisan infrastructure deal, were exactly what many already suspected.
“There was a portal to hell open in the Gulf of Mexico for a minute there,” Ross added. “You would think that Democrats would have an easier time turning their backs on Exxon. The infrastructure bill is a test of how far Democrats are willing to take opposition to the fossil fuel industry. If fossil fuel subsidies aren’t repealed, I think we’re going to have our answer.”
Representative Khanna, chair of the House Oversight Committee subcommittee on the environment, has been threatening to subpoena the executives of Exxon, Chevron, Shell, and other major companies to compel them to testify before Congress if they refuse to do so voluntarily. Vermont Senator Bernie Sanders, chairman of the Senate Budget Committee, has previously called on top oil and gas executives to testify at a public hearing on climate change. The CEOs of BP America, Chevron, and ExxonMobil swiftly refused the Vermont senator’s request.
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In a recent interview with The Nation, Hawaii Senator Brian Schatz declined to comment on the specifics of the Exxon sting video, but echoed the call for oil and gas executives to publicly answer for their industry’s decades-long misinformation campaign and destruction of the planet.
“We in the Senate don’t have that authority without bipartisan cooperation, so this is more likely to have to originate in the House,” he said. “But yes, I think all the major energy company executives that have been dedicated to warming the planet for the purpose of their own profitability should be required to testify under oath as soon as possible.”
Aída ChávezAída Chávez is communications director and policy adviser at Just Foreign Policy. She was previously The Nation’s D.C. correspondent and a reporter at The Intercept, More Perfect Union, and other outlets.