Democrats Push Plan To Tax Oil Company Profits, Send Checks To Americans During Russia-Ukraine Price Spike

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Democrats Push Plan To Tax Oil Company Profits, Send Checks To Americans During Russia-Ukraine Price Spike

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Representative. Ro Khanna and sen. Sheldon Whitehouse is pushing a bill that, according to them, will help bring relief from high gas prices to Americans, as critics of the energy sector argue it would do the exact opposite.

The proposal, which comes as Russia’s war against Ukraine shocks global energy prices, is called the “Big Oil Windfall Profits Tax”. According to Khanna, D-Calif., And Whitehouse, DR.I., the bill would impose a tax on oil barrels sold by large producers “equal to 50 percent of the difference between the current price of a barrel of oil and the pandemic average pre-price price per barrel between 2015 and 2019. “

The money from that tax would be sent to consumers as a quarterly discount, according to an account description, with a limit for singles earning $ 75,000 or more and families earning $ 150,000 or more.

WASHINGTON, DC – JUNE 29: Rep. Ro Khanna (D-CA) speaks at an “End Fossil Fuel” rally near the United States Capitol on June 29, 2021 in Washington, DC. Organized by Our Revolution, the protesters called on Congress to take action to end fossil fuel subsidies (Anna Moneymaker / Getty Images / Getty Images)

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“This is a bill to cut gas prices and hold Big Oil accountable. As the Russian invasion of Ukraine drives up gas prices, fossil fuel companies are reaping record profits,” Khanna said. “These companies have made billions and used the profits to enrich their shareholders while the average Americans are suffering at the pump.”

The tax would only affect companies that extract more than 300,000 barrels of oil per day, applying to oil extracted both domestically and globally, according to a press release from Khanna’s office. This threshold would be exempt “[s]Bigger companies account for about 70 percent of domestic production … so oil giants like Exxon Mobil and Chevron simply can’t demean consumers further without the threat of losing market share, “he said.

“We have seen this script before and cannot allow the fossil fuel industry to once again reap a huge windfall by taking advantage of an international crisis,” Whitehouse said. A press release from Whitehouse and Khanna said that rising gas prices “are not justified by rising domestic production costs, but are driven by international markets controlled by fossil fuel cartels.”

Sen. Sheldon Whitehouse, DR.I., speaks during the confirmation hearing for Supreme Court nominee Amy Coney Barrett before the Senate Judiciary Committee, Tuesday, October 13, 2020, on Capitol Hill in Washington. (Photo AP / Patrick Semansky)

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Representatives of the energy industry, however, oppose the proposal, arguing that it could have the exact opposite of the expected effect.

“Policies such as the so-called windfall tax are misleading and would likely backfire by further increasing energy costs for American households and businesses,” said Anne Bradbury, CEO of the American Exploration and Production Council.

“We believe the solution to rising energy prices should be clear to our nation’s leaders: support domestic oil and natural gas production and enable the pipelines and infrastructure needed to safely transfer energy to customers,” Bradbury added.

Oil well equipment on the Forth Berthold Indian Reservation near New Town, ND MHA Nation produces about a quarter of North Dakota’s annual oil production. (Business Tyler Olson / FOX)

“The American people are looking for solutions, they are not pointing fingers,” said Frank Macchiarola, senior vice president of political, economic and regulatory affairs at the American Petroleum Institute. “The pump price that Americans are currently paying is a function of increased demand and delayed supply combined with the geopolitical turmoil resulting from Russia’s aggression in Ukraine.”

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Macchiarola added: “Lawmakers should focus on policies that increase US supply to help mitigate the situation rather than political magnificence that only discourages investment when it is most needed.”

Energy industry insiders and supporters at S&P Global’s CERAWeek conference in Houston last week repeatedly said that the United States should move towards policies that encourage energy investment in order to increase domestic production.

Sen. Lisa Murkwoski, R-Alaska, said President Biden needs to show tangible movement in that direction or else US power generation won’t increase anytime soon.

“The president has to go up there and not just say it, but then direct his home secretary: where is that five-year plan? Direct Secretary Granholm: Get these LNG export permits out the door,” Murkowski said. “Let’s move on. So let’s not speak at an energy conference.”

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