Biden should kill windfall tax ‘as the most important thing he can do to incentivize oil companies’

During part of an interview with Bloomberg on Friday, economist, Harvard professor, director of the National Economic Council under President Barack Obama and Treasury Secretary under President Bill Clinton, Larry Summers, said the President Joe Biden “should stop talking about windfall taxes”. as the most important thing he can do to incentivize the oil companies.

Summers said, “I think the president should stop talking about windfall taxes as the most important thing he can do to incentivize oil companies. I think using the Strategic Petroleum Reserve is a good idea, but I would prefer to do it in a slightly different way. The government can lock in a profit. What the government should do is sell all that oil and commit to buying back oil, using the substantially discounted futures market that is available. So the government can sell oil for over $100 and promise to buy back that oil…within a range of $90, and then in a year we’ll have the same size strategic oil reserve that we had before, and we having $10 a barrel times, say, 100 million barrels of oil, or $1 billion. And I think more generally, we need to take a modern approach, a modern financial approach to these strategic reserves where we think about using futures markets and securing profits as we achieve stabilization.

Follow Ian Hanchett on Twitter @IanHanchett


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