Chesapeake Energy paid $0 in corporate taxes on its $2.8 billion in profits
A recent report from the Institute for Policy Studies makes clear that Chesapeake Energy, which proclaims itself “America’s champion of natural gas,” is likewise one of America’s champions of corporate tax dodging.
The company made a whopping pre-tax profit of $2.8 billion in 2010, but it paid $0 in corporate income tax to the U.S. Treasury. At the same time, the company’s CEO, Aubrey McClendon, was given $21 million in compensation. I emphasize given because how does one actually earn over $57,000 a day?
Aubrey McClendon has built Chesapeake Energy into the second largest natural gas producer in the United States by betting big on fracking, regardless of the environmental pollution the practice creates.
To avoid paying any corporate taxes at all, Chesapeake Energy takes advantage of the numerous corporate tax loopholes enjoyed by the oil and gas industry. In particular, Chesapeake is able to deduct “intangible” fracking expenses from its tax obligations!
Such expenses include the cost of running the generators that pump huge amounts of toxic fracking fluid underground—where much of it stays during fracking—and the cost of the sand, water, and toxic chemicals combined to make fracking fluid.
That Chesapeake Energy can write these expenses off adds insult to the injury that is fracking.
Of course, keeping these loopholes in the tax code doesn’t come without a cost. Continuing to pay minimal corporate taxes, if any tax at all, requires hiring expensive lobbyists and underwriting various political campaigns.
According to the Institute for Policy Studies, Chesapeake doled out over $3.5 million in campaign contributions and lobbying efforts just last year.
So, while Chesapeake and other natural gas champions make enormous corporate profits and buy up fracking policy, residents of rural communities across the country are stuck paying for the costs shale gas drilling brings to local infrastructure, public health and the environment.
If you’re keeping score, that’s Chesapeake Energy $2.8 billion, Aubrey McClendon $21 million, and rural communities and taxpayers—um, way less than nothing.