Exxon Mobil Corp. Chief Executive Officer Rex W. Tillerson said losing $21 billion in U.S. tax breaks provided to oil companies would cut investments in energy projects, limit job creation and slow economic growth.
Senate Democrats are proposing to repeal the incentives for Exxon, Royal Dutch Shell Plc, Chevron Corp., ConocoPhillips and BP Plc to help shrink the federal deficit. Tillerson called the plan “counterproductive,” in testimony submitted for a Senate Finance Committee hearing today in Washington at which executives from the five companies were asked to appear.
“Increasing these companies’ taxes would only discriminate against certain U.S. workers, make our companies less competitive against others who are in the same business, and discourage future energy investment,” said Tillerson, who also is Exxon’s chairman. “If the U.S. oil and gas industry was permitted to develop our nation’s enormous untapped energy supplies, it could put downward pressure on energy prices and increase revenues for government budgets.”
Exxon, the world’s largest company by market value, reported a 69 percent increase in first-quarter profit, the biggest jump in eight years. Net income rose to $10.7 billion from $6.3 billion a year earlier, Irving, Texas-based Exxon said on April 28.
After a 29 percent rise in oil prices in the past 12 months, the five companies don’t need tax incentives to invest, Senator Charles Schumer, a New York Democrat, said during a news conference in Washington yesterday.
“You’re going to do anything you can to find oil at these prices,” he said, speaking of the five companies.
The legislation, which the full Senate may consider as early as next week, would increase oil and gas taxes for 10 years, with the cash used to reduce the U.S. budget deficit.
In the House, Democrats introduced legislation that would increase fees on oil companies if they don’t produce in areas where they hold leases. The bills also would require new safety standards for drilling and promote natural-gas powered trucks with tax credits.
The Republican-led House yesterday passed legislation that would require U.S. decisions on drilling permits within 60 days, as a part of an effort to increase oil production in the Gulf of Mexico.
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