Home Energy Big Oil Wants to Keep Its Tax Breaks Despite Very Profitable Winter

Big Oil Wants to Keep Its Tax Breaks Despite Very Profitable Winter

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The United States experienced glacial economic growth during the first quarter of 2014, but the big five oil companies—BP, Chevron, ConocoPhillips, Exxon Mobil, and Shell—did not. Even though their profits were lower than in the first quarter of 2013, they still earned a combined $23 billion. They spent $7 billion, or nearly one-third, of this amount to repurchase their own stocks, lining the pockets of their boards of directors, their executives, and their largest shareholders. On top of this, they have $68 billion in cash reserves. Big Oil continues to prosper in a slowly recovering economy.

 

The companies benefited from domestic oil prices that averaged $5 per barrel higher in the first quarter of 2014 than in the first quarter of 2013. The higher price of oil offset the companies’ 5 percent production decline from the first quarter of 2014 compared to the first quarter of 2013.

 

In addition to producing oil and gas, the big five oil companies emit a huge amount of the carbon pollution responsible for climate change. According to the latest data from the Environmental Protection Agency, these companies spewed the climate pollution equivalent of 71 million cars in 2012—equal to more than one-quarter of the cars currently on the road.

 

This carbon pollution contributes to the growing threat of climate change. Some of these companies recognize that their carbon pollution imposes real costs on the economy and established an “internal price on carbon” pollution to account for future carbon pollution reduction requirements. This price does not equal the amount of damage they estimate their carbon pollution causes, but rather how much they think potential future restrictions would cost.

 

The Carbon Disclosure Project reports that “Many companies using an internal carbon price referred to potential increased costs should a carbon price become more formalized or mandatory.” Specifically, it found that “ExxonMobil is assuming a cost of $60 per metric ton by 2030. BP currently uses $40 per metric ton. Royal Dutch Shell uses a price of $40 per ton.” Additionally, ConocoPhillips has an internal carbon price of $8 to $46 per metric ton.

 

Applying BP, ConocoPhillips, Exxon Mobil, and Shell’s internal carbon costs to their 2012 carbon pollution yields a combined internal carbon cost of up to $14 billion.