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The Republican-dominated House of Representatives yesterday moved to repeal a rule that requires oil companies to report on their payments to foreign governments, including taxes and royalties from their activities in these countries.
The rule, part of the Dodd-Frank Act, was devised and approved two years after the 2008 crisis, aiming to make public energy companies more transparent and limit the potential for bribes abroad. The energy companies themselves, however, protested that the rule puts them at a disadvantage to foreign competitors that are not bound by it.
On the other hand, backers of the rule note that the main competitors of Exxon and Chevron are based in Europe, and as such, are subject to EU regulations to the same effect. Shell, BP, Total, and the rest of them all report their tax and royalty payments to foreign governments on an annual basis.
Rex Tillerson, the new Secretary of State, was one of the most vocal opponents to the rule, arguing that it would make it harder for Exxon to do business in resource-rich countries such as Russia. Yet despite the fact that the rule was stipulated in the Dodd-Frank Act, it never took effect: in the years following the passing of the Dodd-Frank Act, the SEC has working on formulating it more specifically. As Vox reports, the final formulation was only completed in the middle of last year, and the rule was supposed to take effect this year.
The Congress is using a little known piece of legislation to quickly remove Obama regulations: the Congressional Review Act. It allows lawmakers to repeal regulation by a simple majority vote. By the end of this week, according to Bloomberg, the House is also expected to kill regulation regarding mountain-top mining and limiting methane emissions.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.