Oil giant supports IRA with some provisions: Low-carbon investment cannot be abandoned!

According to the information obtained by the Financial Intelligence APP, oil giants Exxon Mobil (XOM.US), Phillips 66 (PSX.US), and Occidental Petroleum (OXY.US) do not want Donald Trump and his allies to cut the favorable provisions for the oil industry in President Biden's Inflation Reduction Act (IRA). These companies appreciate some of the benefits in the IRA, especially the incentives for low-carbon energy projects, which often require substantial investments.

Oil giants such as Exxon Mobil, Phillips 66, and Occidental Petroleum all appreciate some of the benefits in the IRA, especially the incentives for low-carbon energy projects. These projects often require significant investments, and the tax credits in the IRA help these companies invest in technologies such as carbon capture and hydrogen.

Vicki Hollub, CEO of Occidental Petroleum, told Trump at a fundraising event in May that the tax credits in the IRA help the company invest in carbon capture technology.

Meanwhile, Exxon Mobil has committed to investing $15 billion in cutting carbon emissions through new investments and has informed the Trump team that it hopes to retain some assets of the IRA.

Executives at Phillips 66 also told Trump's allies in Congress that the tax credits in this law are crucial to their business.

It is understood that oil lobbying groups may welcome the cancellation of certain aspects of the IRA, especially tax credits for renewable energy and electric vehicles.

However, Trump has not explicitly stated which funds he would cut from the bill and where savings would be made. Despite his criticism of electric vehicle charging infrastructure and tax credits for electric vehicles, he has promised to revoke any unused appropriations before a possible return to the White House and to "immediately pause" new expenditures and appropriations.

At the same time, the costs of carbon capture and sustainable aviation fuel production are very high, and the production scale of these technologies is simply not sufficient to reduce costs. Transition investments are large and high-risk, so even oil giants prefer to share risks with governments that promote the transition. However, once completed, these investments cannot simply be withdrawn in case a new president opposed to the transition takes office in the White House.

In conclusion, despite Trump's promise to revoke any unused appropriations before a possible return to the White House and to "immediately pause" new expenditures and appropriations, oil giants still support at least some aspects of the IRA and have good reasons to do so. The challenge they face is how to ensure that their investments in low-carbon technologies and sustainability are protected and supported in the face of possible changes in government policies