Exxon Mobil has been lobbying against parts of Democrats' big social and climate spending bill

Key Points
  • Exxon Mobil has been lobbying against pieces of a sprawling Democratic budget bill aimed at boosting working-class families and fighting climate change.
  • The fossil fuel giant has spent $275,000 over the past week on Facebook ads that include spots targeting tax hikes Democrats have proposed including in the bill.
  • The final shape of the bill, now pegged at about $3.5 trillion, has yet to be determined, although it is expected to include measures to boost child and elder care, and policies to cut carbon emissions.
An ExxonMobil refinery in Baton Rouge, Louisiana.
Kathleen Flynn | Reuters

Exxon Mobil has been lobbying against pieces of a sprawling Democratic budget bill aimed at boosting working-class families and fighting climate change.

The fossil fuel giant has spent $275,000 over the past week on Facebook ads that include spots targeting tax hikes Democrats have included in the bill, which has a $3.5 trillion price tag at the moment. An Exxon lobbyist earlier this year also focused on legislation regarding corporate and international taxes.

The final shape of the bill has yet to be determined, although it is expected to include measures to boost child and elder care, and policies aimed at cutting carbon emissions. Democratic leaders hope to pass the legislation within weeks.

The ads don't mention President Joe Biden or the Democrats. At least six of the ads ran from Friday through Monday, although they are now inactive. One of those advertisements says, "Tell Congress no tax hikes." After a user clicks the ad, it reads, "Contact your elected officials today and let them know you oppose the proposed tax increases on American businesses."

The recent $275,000-plus ad buy is part of $2 million Exxon has spent on Facebook ads over the past 90 days. The spots pushing opposition to raising taxes on businesses also ran before the prior-week period.

"Our lobbying efforts are related to a tax burden that could disadvantage U.S. businesses, and we have made that position known publicly," Exxon spokesperson Casey Norton told CNBC following the publication of this article. "ExxonMobil stands by our position that increased taxes on American businesses make the U.S. less competitive."

Democrats have proposed raising the corporate tax rate from 21% to 26.5% as a way to help pay for the bill. They have also called for increased fees on the fossil fuel industry, while they are divided over whether to include a carbon tax.

The public is largely supportive of tax increases on corporations and the wealthy. A recent Morning Consult poll shows that 68% of those surveyed back raising taxes on the wealthy, and 62% have the same opinion of a possible uptick in corporate taxes.

Several special interest groups have launched lobbying efforts against the tax proposals and other elements of the bill, with much of the focus on centrists such as Sens. Joe Manchin, D-W.Va and Kyrsten Sinema, D-Ariz. Democrats need all 50 members of their caucus in the Senate to pass the measure using a tactic called budget reconciliation, which means they won't need to sway any Republicans to reach the usual 60-vote threshold to allow bills to proceed.

A logo of the Exxon Mobil Corp is seen at the Rio Oil and Gas Expo and Conference in Rio de Janeiro, Brazil September 24, 2018.
Sergio Moraes | Reuters

Any overhaul will require support from Manchin, whose home state of West Virginia is a large producer of fossil fuels such as coal, natural gas and oil. The state is home to part of the Marcellus Shale, a geological formation that also serves as one of the biggest natural gas fields in North America. Exxon Mobil's oil and gas fracking subsidiary, XTO Energy, has operations in West Virginia.

Since the 2012 election cycle, Manchin has received just more than $12,000 from the Exxon Mobil political action committee, according to data from the nonpartisan Center for Responsive Politics. Manchin is the chair of the Senate's Energy and Natural Resources Committee. A senior Exxon lobbyist was caught on camera by the U.K.'s Channel 4, saying that Manchin was one of his top targets. The lobbyist called Manchin the "Kingmaker" and said he spoke to the senator's office on a weekly basis.

After publication of this story, a Manchin spokeswoman told CNBC that the Exxon lobbyist "greatly exaggerated" his influence with Manchin's team. E&E News reports that the lobbyist is no longer with the company.

"Throughout his entire public service career, Senator Manchin and those who work for him have always had an open door policy and a willingness to learn from those with varying and diverse opinions," Manchin's spokeswoman told CNBC in an email Wednesday. "But recently an Exxon employee greatly exaggerated his relationship and influence with Senator Manchin's staff in an attempt to advance his own career only to be misled by an activist organization with an agenda of their own. To suggest that Senator Manchin is beholden to anyone except West Virginians is categorically false."

Exxon Mobil has spent more than $2.7 million on lobbying so far this year, according to CRP data. Michael Solon, one of the Exxon lobbyists, was paid $10,000 for work done in the second quarter that specifically focused on "unspecified reconciliation legislation related to corporate and international taxes," according to the disclosure report.

Before he was a lobbyist, Solon worked as a policy director for Senate Minority Leader Mitch McConnell, R-Ky. 

Democrats in the House and the Senate are trying to craft the framework of legislation that could win support from centrists and progressives alike in both chambers. While a final bill will likely look different, the policies approved by House committees this month as Democrats put together a larger proposal offer clues into what the plan could contain. Democratic leaders are aiming to pass their investment in the social safety net and climate policy in the coming weeks.

Other companies with links to the oil and gas industry have also been actively taking aim at the reconciliation tax proposals through their lobbyists. Gas giant Valero paid Cornerstone Government Affairs less than $5,000 in the second quarter to engage with House and Senate lawmakers on the "corporate tax provisions of the Build Back Better budget reconciliation bill," according to the lobbying disclosure report.

The International Association of Drilling Contractors, a nonprofit trade association, spent around the same amount on lobbying lawmakers and Biden administration officials on "oil and gas policies in reconciliation," among other policies, according to its second-quarter report. The group is "dedicated to enhancing the interests of the oil-and-gas and geothermal drilling and completion industry worldwide," according to its LinkedIn page.

There are other Democratic proposals linked to fighting climate change that could be of concern for oil and gas industry players.

As part of its markup, the House Natural Resources Committee proposed increased fossil fuel fees and royalties for extraction on public lands, among other plans that would affect the oil industry. The panel has also pushed to repeal the oil and gas leasing program in the Arctic National Wildlife Refuge set up as part of the 2017 Republican tax law.

The House Energy and Commerce Committee also advanced a fee on methane emissions, a product of oil and gas operations, among other energy-related policies.

Democrats are also split over whether to include a proposed carbon tax in the legislation. The provision, which could run afoul of Biden's pledge not to raise taxes on households that make less than $400,000, aims to reduce fossil fuel emissions.

Exxon's Norton said Wednesday that the company has supported "an economy-wide price" on carbon emissions for more than a decade.

"We have been clear in supporting an efficient, economy-wide price on carbon as the best way to achieve the goals of the Paris Agreement," the spokesperson said. "While there is not broad support for a tax, we are actively and publicly discussing other options, including lower-carbon fuels and other sector-based approaches that would place a uniform, predictable cost on carbon."