President Biden's budget released Thursday includes another broadside from the White House against oil companies.
The budget proposal, which Republicans said is going nowhere on Capitol Hill, would scrap tax breaks that the oil and gas companies currently enjoy and save the U.S. Treasury about $31 billion over the next decade.
This year's budget cuts the deficit by nearly $3 trillion over the next decade by asking the wealthy and big corporations to pay their fair share and cutting wasteful spending on Big Pharma, Big Oil and other special interests, said Shalanda Young, Biden's budget chief, on Thursday.
The proposal would repeal some of the credits that oil giants currently enjoy, such as an enhanced oil recovery credit and a credit for gas produced from marginal wells. The proposal would also touch other areas that are important to the energy sector, from drilling costs and geological amortization to the expensing of mine exploration costs.
The repeal of a credit for oil and natural gas wells would be the biggest item, as it would be a form of depreciation for mineral resources. The White House says that provision alone would save the Treasury nearly $14 billion over the next decade.
They invested too little of that profit'', he said.
Thursday s announcement is just the latest swipe from the White House against energy companies that, Biden officials often state, had record profits in 2022, but then used that money for stock buybacks instead of lowering prices at the pump.
President Biden said in his State of the Union address that they invested too little of that profit to increase domestic production.
In 2022, big oil companies enjoyed sky-high profits. The five biggest oil majors posted a record net profit after Russia's invasion of Ukraine sent crude prices close to $130 per barrel. Chevron CVX ExxonMobil XOM Shell SHEL BP BP and TotalEnergies TTE posted a net profit of almost $180 billion.
Chevron and Exxon recently raised the ire of the White House by announcing stock buyback plans this year, leading to the White House criticizing the companies by name.
Assistant Press Secretary Abdullah Hasan reacted to Chevron's earnings report by saying that the only thing that is getting in the way of increased production is their own decision to keep plowing windfall profits into the pockets of executives and shareholders instead of using them to boost supply. Oil officials are quick to note that the banner 2022 came after record losses in 2020 during a price crash that year, leading many energy CEOs to be wary of ramping up production even with the current high energy prices.