The analysis used both the Biden administration’s social cost of carbon of $51/metric ton and a conservative metric of $100/metric ton, although most estimates are much higher, to find:

• In 2021, public oil and gas development cost society between $23.4 billion and $46 billion, far outweighing the $9.6 billion in tax revenue.
• Current onshore and offshore public leases would cost society between $2.19 trillion and $4.3 trillion if developed.
• Potential federal oil and gas development would cost society between $22.95 trillion and $45 trillion if developed.

Although the American Petroleum Institute (API) and National Ocean Industry Association (NOIA) warned that any delay in the Biden administration’s new five-year offshore leasing plan would result in dire economic consequences, based on their own figures:

• A new five-year offshore leasing plan would cost society between $20.8 billion and $40.8 billion annually and result in 2.6 to 5 times more annual social costs than the projected revenue for state and local governments.

“Biden needs to remove his oil-tinted glasses and start treating oil and gas development with the extreme caution it deserves,” said Hallie Templeton, Legal Director at Friends of the Earth. “Our sheer survival shouldn’t come second to Big Oil’s profits. If the administration is serious about staving off the worst of the climate catastrophe, the only road forward is no new leases.”

The social cost of carbon is used to estimate the economic damages of adding carbon dioxide to the atmosphere. Fossil fuel development not only costs society trillions in the form of air and water pollution, climate change, and other environmental degradation, but is also associated with public health problems such as cancer, asthma, and temperature-related deaths.

Communications contact: Brittany Miller, (202) 222-0746, bmiller@foe.org

The post Report: Big Oil Makes Billions While Society Shoulders Staggering Costs of Public Lands and Waters Drilling appeared first on Friends of the Earth.

From supporting fossil fuel producer subsidies and incentives, to disregarding the financial and economic risks of fossil fuel investments and more, the IMF continues to lend credibility to and spur fossil fuel expansion around the world. The technical brief was released as the IMF wraps up its flagship Spring Meetings, during which the IMF Board of Governors makes decisions on addressing current international monetary issues and approving corresponding resolutions. The brief highlights the minimum approach necessary for the IMF to “do no harm” on climate.  

“The IMF has a significant amount of influence that could be used to further countries’ green transitions, yet the Fund is failing to step up,” said Luisa Abbott Galvao, International Policy Campaigner at Friends of the Earth. “It’s time for the IMF to stop undermining climate action and follow the science. It’s time to end support for fossil fuels.” 

“During the decade since the IMF admitted that climate change, gender and other inequalities are macro-critical, its policy advice and loan conditions — for example pushing countries to finance fossil fuel-boosting subsidies, squeezing other public spending, and increasing regressive VATs — have undermined achievements in each of these spheres,” said Elaine Zuckerman of Gender Action. “Also by not treating macro-critical issues intersectionally, Fund activities do not address climate change’s disproportionate harmful impacts on women and sexual and gender minorities.” 

Sargon Nissan, IMF programme manager at Recourse said “While the IMF’s newfound commitment to climate change is laudable, the Fund’s greatest impact is through its influence over the 190 member states. The Fund needs to do more to support them to safely and fairly reduce fossil fuel dependence in time to avert climate change’s worst impacts. The IMF must transform how it conducts its lending, surveillance and advice to member states to underpin, not undermine, their climate transitions.” 

Heike Mainhardt, Senior Advisor at Urgewald: “A main area of IMF advice is on tax policy. However, most often the IMF gets its tax advice wrong by continuing to support or turn a blind eye to tax breaks for fossil fuels, such as IMF operations in Mozambique, Suriname and Mongolia. Investors will keep on investing in coal, oil and gas as long as the IMF continues to support fossil fuel tax breaks and other policies that make fossil fuels profitable.” 

Bronwen Tucker, Public Finance Co-Lead at Oil Change International said, “As many Global South countries face the worst debt crises we have seen in a generation and climate disasters at the same time, the IMF has a lot to answer for. They have been key architects in creating both of these situations, and they also hold the power to alleviate them.”

Communications Contact: Kerry Skiff, Friends of the Earth U.S., kskiff@foe.org, (202) 222-0723 

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The analysis comes a day after lawmakers wrote to Big Oil executives demanding a stop to stock repurchases and a day before six Big Oil CEOs are scheduled to appear before the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations.

Although oil companies have blamed high gas prices on modest environmental reforms by the Biden Administration, the vast majority of oil executives are curtailing production to satisfy demands from Wall Street, according to survey data from the Dallas Federal Reserve.

The report finds:

• In the first two months of 2022, seven companies’ boards authorized the repurchase of $24.35 billion in stock — a 15% increase over all of the buybacks authorized in 2021. Six of those decisions came in February 2022, after Russian warmongering lifted stock prices. The total since the start of 2021 is $45.6 billion.
• More than half the companies boosted their dividends, often extravagantly, in January and February. Of the 11 companies raising their dividends, nine were increases of more than 15% and four were increases of more than 40%. Eleven companies have increased their payouts by at least 100%, some from zero, since the first quarter of 2021.
• Six companies have begun paying additional dividends on top of their routine quarterly payments, including by implementing new variable dividends based on company earnings. So far in 2022, these companies have started paying out an initial $3 billion in special windfall dividends.

“This is a master class in war profiteering. Oil and gas companies are feeding off humanitarian disaster and consumer suffering in order to reward Wall Street,” said Lukas Ross, climate and energy program manager at Friends of the Earth. “Oil companies drove us into a climate crisis and are now price-gouging us to extinction. Congress and President Biden must take action by passing a windfall profits tax to rein in Big Oil’s cash grab.” 

“Big Oil is living the second half of their unspoken mantra ‘socialize losses, privatize gains,’” said Chris Kuveke of BailoutWatch. “Two years after winning multi-billion dollar bailouts from the Trump Administration, these newly flush companies are pocketing billions from an international crisis, and they don’t care how it affects regular Americans.”

“Big Oil executives are reaping windfall profits while accelerating the climate crisis and sticking consumers with the bill,” said Alan Zibel, a Public Citizen researcher. “The oil industry and their allies on Capitol Hill falsely claim that the Biden administration’s acceptance of mainstream climate science is stifling investment in the domestic oil industry. But the industry’s actions show that they are intently focused on funneling cash to their shareholders rather than lowering prices for consumers.”

Communications contact: Kerry Skiff, kskiff@foe.org, (202) 222-0723

Shravya Jain-Conti, BailoutWatch, sjain@climatenexus.org, (917) 328-6973

Patrick Davis, Public Citizen, pdavis@citizen.org, (608) 770-4800

The post Report: Big Oil, Profiting Off of War, Plans to Return $45 Billion to Investors in Share Buybacks While Boosting Dividends appeared first on Friends of the Earth.

Friends of the Earth Climate and Energy Justice Program Manager Lukas Ross issued the following statement in response:

There are 49 other Senators who have just as much leverage over this process as Joe Manchin. Leader Schumer must hold the line for climate justice. This is a historic chance to end fossil fuel subsidies and invest in a livable future. We can’t waste this opportunity to pass meaningful climate legislation because there might not be another.

Expert contact: Lukas Ross, (202) 222-0724, lross@foe.org
Communications contact: Brittany Miller, (202) 222-0746, bmiller@foe.org

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“You asked for my support for ending fossil fuel subsidies, and you have it,” the senator’s letter reads.

Heinrich’s message came in response to a letter from environmental groups and lawmakers across the state, who have been urging action on eliminating subsidies as part of the upcoming spending packages.

“As the negotiations over the Build Back Better Act intensify over the next few days, it is encouraging to know that Senator Heinrich is ready to fight to end these unconscionable government kickbacks to polluters, said Food & Water Watch Senior Organizer Margaret Wadsworth. “We know we must transition New Mexico’s economy away from fossil fuels, not continue to subsidize an industry that is driving the climate crisis, wasting precious water resources, and polluting our air.”

“We are in a critical moment to address the climate crisis and must build toward a climate-justice-centered framework that puts people, not industry polluters first,” said Sierra Club Rio Grande Chapter Organizer Miya King-Flaherty. “Ending federal fossil fuel subsidies is fiscally responsible. We must invest in a clean, renewable energy future, and end handouts to industry polluters. It’s great to see Senator Heinrich support ending fossil fuel subsidies as budget reconciliation talks continue. He is a great environmental champion for New Mexico.”

“Senator Heinrich’s commitment to repeal fossil fuel subsidies sets the standard for climate leadership,” said Friends of the Earth Campaigner Raena Garcia. “In the face of a climate emergency, we need progressive action to transform our nation’s reliance on fossil fuels and end support for an industry that is destroying New Mexico’s people and places. Thank you Senator Heinrich for answering the call.”

Communications contact: Brittany Miller, 202-222-0746, bmiller@foe.org

The post Senator Heinrich Signals Supports for Ending Fossil Fuel Subsidies appeared first on Friends of the Earth.

Fossil fuel subsidies like these are a hot topic for climate and justice groups, who see the misspent funds as low-hanging fruit that could help pay for Democrats’ proposed $3.5 trillion climate and care reconciliation package. 

Recent legislation passed by the House Ways and Means Committee would eliminate two subsidies addressed in the new report: the exemption for Foreign Oil and Gas Extraction Income (FOGEI) and special treatment for dual-capacity taxpayers, worth at least $86 billion to just a handful of oil majors. Unfortunately, the legislation left intact at least another $35 billion in domestic fossil fuel subsidies that President Biden proposes ending, some of which are over a century old. Alternative proposals in the Senate like Chairman Wyden’s Clean Energy For America Act would address both domestic and international polluter giveaways.

“The House bill made a decent start by targeting Big Oil’s international tax loopholes, but it went nowhere near far enough,” said Lukas Ross, Climate and Energy Justice Program Manager at Friends of the Earth, “Leader Schumer needs to lead on climate and ensure that all $121 billion in fossil fuel subsidies are repealed in the final package.”   

Repealing the Trump-era exemption for FOGEI will raise an estimated $84.8 billion in revenue. Based on an analysis of SEC filings and other data, the report finds that only 12 companies are currently eligible for  the special treatment this loophole affords.  

The dual capacity loophole, which allows oil companies substantial latitude to potentially misrepresent royalties and other payments to foreign governments as creditable tax payments, would raise at least another $1.4 billion; other estimates put the number much higher. 

“US Big Oil companies like Exxon and Chevron have fought tooth and nail to keep the payments they make to governments around the world a secret, while paying lip service to the global movement for payment transparency,” said Daniel Mulé, Policy Lead for Extractive Industries Tax and Transparency at Oxfam. “This secrecy has a potential tax impact in the US as well, as it makes it all the more difficult to discern if US oil & gas companies are illegitimately inflating their foreign tax credits.”

The report documents the lobbying activities of firms like Chevron and Conoco specifically to protect these loopholes in particular. 

“Big Oil isn’t going quietly,” said Chris Kuveke, Analyst at BailoutWatch, “Since Biden became President, it is unfortunate but not surprising that the handful of companies benefitting from these loopholes are lobbying to protect their special treatment.” 

Press inquiries: Kaela Bamberger, 202-222-0703, kbamberger@foe.org

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Friends of the Earth President Erich Pica issued the following statement in response:

This bill is fundamentally at odds with the President’s commitment to repeal fossil fuel subsidies. This is a failure of climate leadership that will not soon be forgotten. If Chairman Neal and Speaker Pelosi will not rise to the challenge of amending this bill, we are counting on Chairman Wyden and Leader Schumer to continue the fight where the House has surrendered.

Communications contact: Kaela Bamberger, kbamberger@foe.org, 202-222-0703

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The CEPP has been touted by Majority Leader Schumer as one of the largest individual emissions reduction programs in the infrastructure package. The potential inclusion of fossil fuels and false solutions in pending legislation poses a direct risk to the Biden administration’s emissions reduction goals and commitments to environmental justice.

“We need rapid and ambitious climate policy, not another polluter subsidy,” said Sarah Lutz, Climate Campaigner for Friends of the Earth. “These so-called ‘technology neutral’ standards are incompatible with the urgent need to transition to sustainable and renewable energy.”

The CEPP is expected to be a reconcilable iteration of the recent Clean Energy Standard bills, which many environmental groups have criticized for subsidizing fossil fuels and other polluting energies that inflict disproportionate harms on BIPOC and low-income communities. Many of these technologies were highlighted in the recent White House Environmental Justice Advocacy Council recommendations as not being beneficial to communities.

“The climate emergency cannot be fooled or tricked by legislating that polluting energy sources can now qualify as clean. Likewise, greenwashing dirty energies will not change their environmental injustices,” the letter reads. “Therefore, we urge you to direct incentive payments solely to proven and ecologically sound renewable technologies, such as solar, wind, and geothermal.

Communications contact: Brittany Miller, (202) 222-0746, bmiller@foe.org

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