End Big Oil Tax Subsidies Act of 2011- Amends the Internal Revenue Code to require seven-year amortization of the geological and geophysical expenditures of covered large oil companies. Defines "covered large oil company" as a taxpayer which is a major integrated oil company or which has gross receipts in excess of $50 million in a taxable year.
It denies certain tax benefits to any taxpayer that is not a small, independent oil and gas company, including: (1) the tax credits for producing oil and gas from marginal wells and for enhanced oil recovery, (2) expensing of intangible drilling and development costs in the case of gas wells and geothermal wells, (3) percentage depletion, (4) the tax deduction for qualified tertiary injectant expenses, (5) the exemption from limitations on passive activity losses, and (6) the tax deduction for income attributable to domestic production activities.
This bill also prohibits the use of the last-in, first-out (LIFO) accounting method by major integrated oil companies.
Finally it limits or denies the foreign tax credit and tax deferrals for amounts paid or accrued by a dual capacity taxpayer to a foreign country or U.S. possession for any period with respect to combined foreign oil and gas income. Defines "dual capacity taxpayer" as a person who is subject to a levy of a foreign country or U.S. possession and receives (or will receive) directly or indirectly a specific economic benefit from such county or possession.
In his statement introducing the bill, Senator Earl Blumenaur of Oregon said "Right now, Americans are subsidizing some of the largest and most profitable oil companies in the world with their tax dollars. This bill, the `End Big Oil Tax Subsidies Act,' would end 10 of the most egregious tax loopholes enjoyed by the oil industry--tax loopholes that have helped BP, Chevron, ConocoPhillips, ExxonMobil and Shell make a combined profit of nearly $1 trillion over the past decade." He also said it will save $40 billion over the next 5 years and that we could redirect the subsidies in the tax code to level the playing field for emerging technologies like wind and solar power.