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The Guardian
10 hours ago
- Business
- The Guardian
Elizabeth Warren presses oil companies on tax break lobbying for Senate bill
Democratic lawmakers led by the Massachusetts enator Elizabeth Warren are pressing two energy companies about their efforts to 'win a $1.1bn tax loophole' in President Trump's so-called 'big, beautiful bill'. The proposed exemption, which Senate Republicans inserted into their version of the reconciliation mega-bill 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. Enshrined within the Inflation Reduction Act, the corporate alternative minimum tax (CAMT) requires corporations with adjusted earnings over $1bn to pay at least 15% 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, Senator Warren, the Oregon senator Ron Wyden and Senate 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 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 9 July. '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. '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,' said Warren. 'Americans deserve to know if Big Oil paid for these Republicans in Congress to carve out tax breaks just for them.' 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 told the Guardian. 'Republicans would rather kill over 800,000 good-paying jobs and send energy costs skyrocketing than stand up to their big oil billionaire buddies.'
Yahoo
21 hours ago
- Business
- Yahoo
Ovintiv (OVV) Declines 6.2% as Israel, Iran Agree to Pause Strikes
Ovintiv Inc. (NYSE:OVV) is one of the . Ovintiv dropped its share prices by 6.24 percent on Monday to close at $38.91 apiece, in line with the drop in oil prices primarily due to the easing tensions between Israel and Iran. After weeks of benefitting from the conflict through higher oil prices, Ovintiv Inc. (NYSE:OVV) declined alongside its energy peers after President Donald Trump announced in a social media post on Monday that the two Middle Eastern countries have officially agreed to pause strikes, adding that he hoped it would become permanent. The oil and gas exploration and production sector alone declined by 3.29 percent. In the first quarter of the year, Ovintiv Inc. (NYSE:OVV) registered total production of 588,000 barrels of oil equivalent per day (mboe/pd) A drilling rig fueled by the energy and expertise of the oil & gas exploration and production company. For the second quarter of the year, the company expects to produce between 585,000 to 605,000 mboe/pd, as well as between 595,000 to 615,000 mboe/pd for full-year 2025. While we acknowledge the potential of OVV as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
18-06-2025
- Business
- Yahoo
Oil Industry Gets $1 Billion Tax Tweak in GOP's Senate Bill
(Bloomberg) -- Senate Republicans included a tax break estimated to be worth more than $1 billion for oil and gas producers in their version of President Donald Trump's sprawling fiscal package. Security Concerns Hit Some of the World's 'Most Livable Cities' How E-Scooters Conquered (Most of) Europe JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown The provision would allow energy companies subject to a 15% corporate alternative minimum tax to deduct certain drilling costs when calculating their taxable income. Companies including ConocoPhillips, Ovintiv Inc. and Civitas Resources, Inc. lobbied in favor of it. The change was included in the legislation released Monday by Republicans on the Senate tax writing committee, which would slash tax credits for wind, solar, electric vehicles and hydrogen. The tax break for drilling costs is nearly identical to a bill by Republican Senator James Lankford. His home state of Oklahoma is among the top oil and gas producing states. Lankford's bill, called the Promoting Domestic Energy Production Act, would cost the US government $1.1 billion over 10 years, according to the non-profit Tax Foundation, which cited an estimate from the non-partisan Joint Committee on Taxation. A representative for Lankford declined to comment. Earlier this year, Lankford told told CNBC that his bill was necessary to prevent independent oil and gas producers from being squeezed by the Corporate Alternative Minimum Tax, enacted under former President Joe Biden to prevent corporations from using deductions and credits to pay little or no taxes. 'If we can't get rid of that entirely we at least need to give some relief to those folks who are independent producers,' Lankford said. 'We need to be able to get some relief to them so they're not constantly worried about it.' Also See: Republican Who Flip-Flopped on Energy Credits Risks Voters' Ire Some Democratic lawmakers, along with environmental and watch dog groups including Friends of the Earth and Public Citizen, criticized the Senate bill as a giveaway to fossil fuel companies. 'There is a giant give away to the oil industry tucked right into this bill,' said Senator Elizabeth Warren, a Massachusetts Democrat. 'They are going to get a special get out of paying your taxes free.' Other supporters of the measure, which wasn't included in the House version of the bill, include the Domestic Energy Producers Alliance, founded by oil billionaire and Trump donor Harold Hamm. It was also backed by the American Exploration & Production Council, which represents independent oil and gas producers including Oklahoma City-based Devon Energy Corp. 'America and the world need affordable, reliable energy – and this common-sense legislation will enable domestic producers to more quickly invest in production and meet this critical need,' said Anne Bradbury, the group's chief executive officer. --With assistance from Cam Kettles. (Updates with comment from senator and more details starting in the 10th paragraph.) Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? How a Tiny Middleman Could Access Two-Factor Login Codes From Tech Giants American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software ©2025 Bloomberg L.P.
Bloomberg
17-06-2025
- Business
- Bloomberg
Oil Industry Gets $1 Billion Tax Tweak in GOP's Senate Bill
Senate Republicans included a tax break estimated to be worth more than $1 billion for oil and gas producers in their version of President Donald Trump's sprawling fiscal package. The provision would allow energy companies subject to a 15% corporate alternative minimum tax to deduct certain drilling costs when calculating their taxable income. Companies including ConocoPhillips, Ovintiv Inc. and Civitas Resources, Inc. lobbied in favor of it.
Forbes
22-05-2025
- Business
- Forbes
How To Frack A Modern Shale Well And Boost Capital Efficiency
Multiple wells in Kansas To many, it's still a surprise just how big a modern frac job is, or more correctly 40-50 separate frac jobs in a single horizontal well. First, the total volume of water that is injected into a 2-mile horizontal is about 20 million gallons. How much is this? If all this water were poured into a container that surrounds the grassed area of a football stadium, the water would rise about 40 feet. How much proppant is pumped down there to prop and keep the created fracture network open to later flow of oil and gas? About 20 million pounds, or enough to fill 90 railway shipping containers. These numbers are for just one horizontal well. The shale revolution quickly discovered that two wells could be fracked at the same time, and save costs. One way is to use one set of pumps and one high pressure manifold, but alternate the injection between two wells—this was called a Zipper frac. Another option was to use two sets of pumps and two pressure manifolds to simultaneously pump fracs in two wells—called a Simulfrac. This made fracking still more efficient although not increasing cost savings as much as a Zipper frac. A logical extension has been reported by Ovintiv, whose predecessor was Encana. A Trimulfrac is when three wells are fracked simultaneously. The logistics are more complicated with three high-pressure manifolds that inject into three wells at the same time. But the result is even lower costs, and increased capital efficiency. To accommodate this, you need more frac pumps. As reported, a typical Trimulfrac had 12 electric pumps and 6 diesel pumps, compared with a Zipper frac of 8-10 electric pumps. Also needed is access to a larger reliable water supply each day. This can be a problem in the Permian basin semi-deserts of West Texas and New Mexico. Also required is more sand proppant, and Ovintiv have deployed huge piles of wet sand on site. The daily sand usage went up from 5 million pounds/day for each Zipper frac to 13 million pounds/day for a Trimulfrac. Zipper fracs were used by Ovintiv in the period 2017-2019. In 2020 – 2022, about 80% of fracs were Simulfracs. But in 2023, 60% were Simulfracs and 40% were Trimulfracs. An obvious benefit is greater footage fracked each day, and a typical number reported was 4,000 ft/day. Compare this with 1500–1800 ft/day for older Zipper fracs in 2017-2019. With this new Trimulfrac momentum, fracking can keep pace with 4-5 drilling rigs. The synergism means less fuel consumed, and less friction reducer needed to lower frac pumping pressure. The well completions are more efficient as shown by costs. The average cost savings total up to $125,000/well compared with Simulfrac, and $525,000/well compared with Zipper frac. According to Ovintiv, there has been no frac interference by offset fracs. And no degradation of well productivity due to simultaneous fracking. They claim their technology leads to a consistent volume of stimulated reservoir rock based on high cluster efficiency due to effective perforating practice. A new analysis by Energy Information Administration (EIA) argues that Trimulfracs are the new norm. They identified simultaneous well completions in their data set 'by grouping wells located within 50 ft of each other and analyzing overlapping start and end dates for completions, an indicator that the wells were fractured concurrently.' EIA found that in 2014 the average number of horizontal wells completed at the same time was 1.5, but has risen to 3 in 2024. The 1.5 ratio in 2014 suggests a mix of single-well fracs and Zipper fracs. In the figure, a blip above a ratio of 3 may indicate a few Quadfracs have been added to the data: fracking four wells at the same time. Multiple wells fracked at each location. Additional information supports this picture. Matador Resources found success in 2024 using Trimulfracs: a 25% reduction in completion time and cost savings above $1 million compared with Simulfracs and Zipper fracs. Chevron plan to use Trimulfracs on half of their Permian wells in 2025. Chevron can bring each well to production in 25% less time which reduces costs by 12% for each well. Chevron got into Trimulfracs after March 2024 and used the technique on 20% of its wells in 2024. In 2025, the company want to use Trimulfracs on 50%--60% of its wells in the Permian. The company noted they need 60% more frac water and frac sand each day to carry this out. On some days the sand was brought in by 10 trucks every hour to achieve this. Electric fracking fleets have advantages over traditional diesel pumpers. They can reduce logistics and costs by using local power from the grid, or from onsite natural gas to drive the gas turbines. Power is easier to manage, and automation sensor and software can be installed, as Halliburton have demonstrated. For their Trimulfracs, Chevron uses mostly electric pumps which consume 50% more power each day than fracking only one well each time. For operators still concerned about reaching net-zero emissions, renewable power exists, and at some point may become available to well sites, in Texas and New Mexico. A common industry feeling about Donald Trump's mantra 'drill, baby, drill' is that 'We've been there and done that.' It came to a head in 2018, the year of the fracker, when expanding the number of shale wells was top priority. But free cash flow, profits, and investments in oil and gas industry dwindled until companies realized they had to boost capital efficiency to turn this around. Boosting capital efficiency, and return on investment, have remained strong goals since 2018, and general opinion is this will continue despite the Trump administration's mantra to accelerate drilling.
