Bennet leads effort to rein in profiteering by oil companies as gas prices skyrocket

Sen. Michael Bennet joined other lawmakers in introducing a tax to limit profiteering by large oil companies in the wake of rising gas prices in Colorado and across the country.

“We need to use every tool at our disposal to protect Coloradans from rising energy costs and provide them relief, and this legislation will help us do that,” Bennet said in a statement Friday. “As Putin wages a reprehensible, lawless war on Ukraine and sends the global energy market into chaos, we need to hold large oil and gas companies accountable and prevent them from using this moment to exploit American consumers.”

If the Big Oil Windfall Profits Tax passes, oil companies that produce or import at least 300,000 barrels of oil per day will owe a tax, per barrel, that is equal to 50% of the difference between the current price of a barrel of oil and the pre-pandemic average price per barrel between 2015 and 2019, according to the statement. 

Smaller oil companies accounting for about 70% of domestic oil production would be exempt from this tax.

Last year, the profits of ExxonMobil, one of the largest oil companies in the world, rose more than 60% over pre-pandemic levels, to more than $23 billion. Over the same period, the price of a gallon of gas rose from an average of just under $2.70 to just over $3.40, according to Bennet’s statement. 

The average price of a gallon of gas today is over $4. 

The legislation was introduced by Sen. Sheldon Whitehouse, a Democrat from Rhode Island, and co-sponsored by a dozen senators, including Sen. Bernie Sanders, an independent from Vermont who often votes with Democrats, and Democratic Sens. Richard Blumenthal of Connecticut, Jeff Merkley of Oregon, and Cory Booker of New Jersey.

The bill would amend the Internal Revenue Code of 1986 to impose a windfall profits excise tax on crude oil and to rebate the tax collected to individual taxpayers, according to the bill’s text, which was emailed to Newsline by Whitehouse’s communications advisor. 

“We’ve seen this script before, and we cannot allow the fossil fuel industry to once again collect a massive windfall by taking advantage of an international crisis,” Whitehouse said in a statement last week.

The revenue

If passed, the revenue raised would be returned to consumers in a quarterly rebate, which would phase out for single tax filers who make more than $75,000 in income each year, according to Whitehouse’s statement. The quarterly rebate would phase out for joint filers who earn more than $150,000 in annual income. Whitehouse’s statement says that at $120 per barrel of oil, the tax would raise about $45 billion a year, so single filers would receive about $240 a year and joint filers would receive about $360 a year. 

“Big Oil raked in $174 billion in profits last year — and as Putin’s invasion of Ukraine drives up gas prices, they’re on track to make even more,” tweeted Sen. Elizabeth Warren, a Democrat from Massachusetts who co-sponsored the bill.

Russia’s invasion of Ukraine has further disrupted an already volatile global oil market, according to Bennet’s statement, by reducing supply and leading governments to limit imports of Russian energy.

“Americans want to put pressure on Putin, but they need help with high gas prices,” Merkley said in Whitehouse’s statement. “So let’s tax oil companies’ war profiteering and send gasoline rebate checks to Americans.”

Editor’s note: This story first appeared on Colorado Newsline, which is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Colorado Newsline maintains editorial independence. Contact Editor Quentin Young for questions: info@coloradonewsline.com. Follow Colorado Newsline on Facebook and Twitter.