Windfall profits tax ‘is sorely needed’ but more oil is not, groups warn Biden

While welcoming U.S. President Biden’s newly confirmed support for a windfall profits tax targeting fossil fuel giants, advocacy groups on Monday also argued against incentivizing more oil production in the United States, especially given the worsening climate emergency.

In brief remarks at the White House Monday afternoon, Biden decried the “outrageous” third-quarter profits of oil companies such as ExxonMobil and Shell, asserting that “their profits are a windfall of war, a windfall from the brutal conflict that’s ravaging Ukraine.”

Flanked by Treasury Secretary Janet Yellen and Energy Secretary Jennifer Granholm, Biden called on oil companies to cut prices at the pump and boost domestic production—and warned that “if they don’t, they’re gonna pay a higher tax on their excess profits and face other restrictions.” He pledged his administration will work with Congress on relevant policies.

“President Biden is getting it wrong,” declared Robert Weismann, president of the consumer advocacy group Public Citizen. “America needs a windfall profits tax; we don’t need Big Oil to ramp up production. Oil prices have been high—and Big Oil profits have skyrocketed—because of the Russian invasion of Ukraine. The solution to that is simple: a windfall profits tax that extracts Big Oil’s unjust enrichment and returns the money to the people.”

Weissman stressed that “drilling more won’t lower prices for U.S. consumers. More oil from U.S. lands will just be exported—as 29% of U.S. crude production now is. And more investment in oil drilling will deepen our dependence on fossil fuels when the worsening climate catastrophe demands we speed the transition away from fossil fuels.”

“Americans know that Big Oil profiteering is ripping them off and want a direct solution,” he added. “A windfall profits tax is that. Boosting oil production is not.”

Friends of the Earth program manager Lukas Ross responded similarly to Biden’s remarks.

“While we sorely need a windfall profits tax, yet another incentive to drill for oil is not,” Ross said. “When Congress returns from recess, we expect President Biden’s swift help in passing a windfall profits tax that refunds Big Oil’s ill-gotten gains to consumers.”

Biden’s speech and the reaction came just before not only the U.S. midterm elections—which will determine control of Congress for the next two years—but also COP27, a United Nations climate summit set to kick off in Egypt on Sunday.

In the lead-up to the conference, science-based U.N. reports have underscored the need for the global community—especially rich nations disproportionately responsible for the climate emergency—to dramatically scale up efforts to limit planet-heating pollution.

Originally published at Commondreams.org.