"No Full Repeal of IRA"…Oil Industry Puts Brakes on Trump

US Oil Industry Receives Subsidies for Low-Carbon Technology Development
ExxonMobil and Others Oppose Full Repeal of IRA

American oil giants are consecutively conveying their opposition to the full repeal of the Inflation Reduction Act (IRA) to former President Donald Trump, the Republican presidential candidate.

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On the 6th (local time), The Wall Street Journal (WSJ) reported that U.S. petrochemical companies believe the IRA provisions supporting tax benefits for low-carbon energy projects should be maintained. The IRA is a flagship pro-environment manufacturing revitalization policy promoted by the Joe Biden administration.

Former President Trump has expressed his intention to pursue fossil fuel-based energy policies. Although his allies in the U.S. oil industry initially opposed the enactment of the IRA, their stance changed after the Biden administration began supporting tax benefits for low-carbon technology development.

Vicki Hollub, CEO of Occidental Petroleum, reportedly persuaded former President Trump directly at a fundraising event held in Houston, Texas, last May, emphasizing that the company’s tax credit provisions for large-scale investments in carbon capture technology should be maintained. Occidental Petroleum is building a $1.3 billion carbon capture plant in West Texas and plans to construct dozens more plants in the future.

ExxonMobil and Chevron have also committed to investing $30 billion in other low-carbon technologies such as carbon capture, hydrogen, and biofuels. Since these plans are based on the premise of IRA tax credit benefits, both companies have conveyed to the Trump campaign that some IRA benefits should be retained. Phillips 66, a major oil and natural gas company, also informed Congress that IRA’s tax benefits are important for its business.

Earlier, former President Trump criticized the Biden administration’s pro-environment policy stance as a "Green New Scam," claiming it to be a fraud disguised as environmentalism, while advocating for fossil fuel-based energy policies. Because of this, some have expressed concerns that the IRA could be repealed if former President Trump is elected.