Sen. Elizabeth Warren questions Treasury Secretary Scott Bessent duting a Senate Finance Committee hearing on president’s proposed budget.AP/Jose Luis Magana
This story was originally published by the Guardian and is reproduced here as part of the Climate Desk collaboration.
Democratic lawmakers led by the Massachusetts senator Elizabeth Warren are pressing two energy companies about their efforts to “win a $1.1 billion tax loophole” in Donald Trump’s so-called One Big Beautiful Bill.
The proposed exemption, which Senate Republicans inserted into their version of the reconciliation megabill this month, would exempt fossil fuel companies from paying a tax codified by Biden in 2022. “It’s an insult to working people to give oil companies a massive tax handout while slashing healthcare and raising energy prices for millions of families,” Warren, who was a major advocate for the tax, told the Guardian.
“Americans deserve to know if Big Oil paid for these Republicans in Congress to carve out tax breaks just for them.”
Enshrined within the Inflation Reduction Act, the corporate alternative minimum tax (CAMT) requires corporations with adjusted earnings over $1 billion to pay at least 15 percent of the profits they report to their shareholders, which are known as “book profits,” in taxes. The Senate Finance Committee’s proposal would shield domestic drillers from that tax by allowing companies to deduct certain drilling costs when calculating their income—a change that would allow some companies to pay zero dollars in federal taxes.
Winning the tax tweak has been a major priority for fossil-fuel interests this year. The oil major ConocoPhillips and Denver-based petroleum company Ovintiv directly lobbied for the change, federal disclosures show.
On Thursday morning, Warren, along with Senate Democratic colleagues Sheldon Whitehouse (Rhode Island), Ron Wyden (Oregon), and Minority Leader Chuck Schumer, sent letters to ConocoPhillips and Ovintiv pressing for answers on their role in shaping the CAMT change. “Your company’s lobbying disclosures explicitly prioritize this handout,” read the letters, which were shared exclusively with the Guardian.
Both companies could “benefit tremendously from this provision,” read the letters, which are addressed to the ConocoPhillips CEO, Ryan Lance, and the Ovintiv CEO, Brendan McCracken, respectively.
The Guardian has contacted ConocoPhillips and Ovintiv for comment.
In their missives, the senators asked how much each company has spent on lobbying for the provision and will spend this year, how much each has donated to elected officials advocating for fossil fuel tax cuts, and how much of a reduction in taxes each company would see if the provision is finalized, requesting answers by July 9.
“The rationale for CAMT was simple: for far too long, massive corporations had taken advantage of loopholes in the tax code to avoid paying their fair share, sometimes paying zero federal taxes despite earning billions in profits,” the signatories wrote.
The proposed change, the letters note, closely resembles a bill introduced by the Oklahoma senator James Lankford this year, which would allow companies to subtract “intangible drilling and development costs” from their CAMT income calculations.
Lankford accepted nearly $500,000 in donations from the fossil fuel sector between 2019 and 2024, making it his top source of industry funding. The Guardian has contacted the senator for comment.
Deductions for intangible drilling costs—referring to costs incurred before drilling, such as for labor and equipment—have been on the books since 1913, making them the oldest, largest US fossil fuel subsidy, according to one report on the Lankford proposal.
“Big Oil now wants this deduction to apply not only for purposes of their taxable income, but for book income purposes as well,” the letters say. “Put another way, if enacted, this provision would reduce or even eliminate tax liabilities for oil and gas companies under CAMT, allowing some to pay no federal income taxes whatsoever.”
Other energy-related provisions in the draft reconciliation bill would phase out incentives for clean energy manufacturing and energy efficiency, causing utility bills to rise and jobs to be lost. This makes the tax break proposal “especially insulting,” says the letter, which was sent as temperatures spiked across much of the US.
“Americans deserve to know if Big Oil paid for these Republicans in Congress to carve out tax breaks just for them,” said Warren.
As drafted, the reconciliation bill would also jeopardize energy security by curbing the growth of renewable energy, Schumer told the Guardian.
“The Republicans’ plan is a complete capitulation to Big Oil at the expense of clean energy and American families’ wallets,” Schumer said. “Republicans would rather kill over 800,000 good-paying jobs and send energy costs skyrocketing than stand up to their Big Oil billionaire buddies.”
