An oil pumpjack
Spencer Platt/Getty Images
Oil stocks were poised to open lower Monday as investors reacted to the news that the Democrats’ climate change measure could cost oil companies, by some estimates, as much as $25 billion.
The Inflation Reduction Act of 2022 proposes to reinstate a tax on crude oil and imported petroleum of 16.4 cents a gallon tax starting next January, according to a summary of the measure released by the Senate’s finance committee.
The tax, called the Hazardous Substance Superfund Financing Rate, or Superfund Tax, was originally included in the House of Representatives’ version of the Build Back Better Act, and it was then estimated it could generate about $25 billion in revenue.
The petroleum Superfund tax was originally instated from 1980 to 1995 at 9.7 cents a barrel, and was designed to help fund the cleanup of hazardous waste sites.
That said, there are other provisions in the $369 billion measure that are slated to help the oil industry, put in at Sen. Joe Manchin’s insistence. It creates tax subsidies for traditional energy plants that capture carbon emissions, and requires the Interior Department to offer at least 2 million acres of onshore federal land and 60 million offshore acres to the fossil fuel industry every year for a decade.
Shares of Big Oil companies were down in premarket trading Monday, with Exxon Mobil (ticker: XOM
) dipping 0.7%, Chevron ( CVX
) off 0.6%, Shell
( SHEL
) down 0.2%, and ConocoPhillips ( COP
) declining 0.4%.
Write to Sabrina Escobar at [email protected]
