Analysis: Oil companies have received $1.9B in tax benefits under coronavirus stimulus

Companies with ties to the oil industry have received some $1.9 billion in tax benefits under federal coronavirus stimulus legislation, according to an analysis from Bloomberg. 

Thirty-seven such companies claimed tax benefits through the $2.2 trillion CARES Act that was passed by Congress in late March, the outlet found after reviewing Securities and Exchange Commission filings.

One provision of the law gives companies greater ability to deduct recent losses: a key feature for an oil industry that saw prices drop from $50 in February to as little as negative $37 one day in April.

Prices are now hovering near $30, but many in the industry have already sustained significant losses.

The tax changes allow companies even in bankruptcy to get refunds, which experts told Bloomberg means it could be years before some oil firms pay corporate income taxes again.

The provisions were designed to benefit any number of companies, particularly small ones likely to take a huge hit in the economic fallout.

The taxpayers funds being routed to oil companies come as Democrats have fought provisions that might benefit the fossil fuel industry.

“Using federal assistance — including low-interest loans, royalty relief, tax breaks, or strategic petroleum reserve purchases — in order to prop up oil companies would be a wasteful misuse of government resources that would exacerbate the climate crisis,” Sens. Ed Markey (D-Mass.), Jeff Merkley (D-Ore.) and Bernie Sanders (I-Vt.) wrote in a letter to President Trump in March.

While a $3 billion request from the White House to fill the nation’s petroleum reserve was ultimately left out of the CARES Act, the administration has looked for other ways to assist the industry. 

Expanded criteria for the Main Street Lending Program eased restrictions on borrowing for heavily indebted companies and also allows them to use the loans to refinance existing debts — a move specifically requested by an industry group for small and mid-sized oil producers.