The oil industry is urging former President Donald Trump not to completely slash provisions of President Biden’s Inflation Reduction Act (IRA) if he is re-elected. According to the Wall Street Journal, several major oil companies, including Exxon Mobil, Phillips 66, and Occidental Petroleum, have highlighted the benefits of the IRA in discussions with Trump’s campaign and his Congressional allies. While many in the fossil-fuel industry initially opposed the law when it was passed in 2022, they have come to appreciate provisions that earmark billions of dollars for low-carbon energy projects.
At a Houston fundraiser for Trump in May, Occidental CEO Vicki Hollub made a direct appeal, emphasizing the importance of preserving tax credits that support the company’s significant investments in technology designed to capture carbon directly from the air. Officials from Phillips 66, a $58 billion U.S. oil refiner, have also told members of Congress that the IRA’s tax credits are crucial for its business. The company’s renewable fuels, made from used cooking oil, vegetable oil, and fats, qualify it for large tax credits under the act.
Trump has called Biden’s climate efforts the “Green New Scam” and last month promised to cut unspent IRA funds. With the backing of influential conservative think tanks, Republicans in Congress have tried to repeal the law and its provisions multiple times and are expected to push for cuts again next year during the legislature’s budget reconciliation.
Oil industry’s plea to Trump
However, political strategists predict that Trump may try to rebrand the law, given the support for it among officials and companies in some Republican-leaning states, such as Oklahoma and South Carolina. This mirrors his rebranding of NAFTA into USMCA, which he claims is the greatest trade deal in history. The true costs of net-zero mandates are becoming increasingly difficult for Biden and the EU to hide.
Despite this, Big Oil is now eager to participate, creating jobs at significant costs. The US oil industry had mixed expectations for both Trump and Biden administrations. Trump’s actions included promising drilling areas which later faced reversals, disappointing many in the industry.
During Biden’s term, despite expectations for a focus on renewables, the industry saw record production and profits. Companies are also taking advantage of IRA incentives, which Trump proposes to cut, adding complexity to oil industry preferences in the upcoming election. The ongoing interplay between big oil, legislative maneuvers, and presidential politics continues to shape the energy landscape, with significant implications for investment, job creation, and the broader economy.
