Beyer Announces Reintroduction Of Legislation To End Tax Breaks For Oil And Gas Industry

U.S. Representative Don Beyer today announced the reintroduction, with Reps. Sean Casten (IL-06) and Mike Levin (CA-49), of the End Oil and Gas Tax Subsidies Act. The legislation would eliminate a series of tax breaks enjoyed by the oil and gas industry.

"It is crazy, dangerous, and a stupid waste of money for the federal government to keep subsidizing fossil fuels with taxpayer money when we have just reached the 1.5°C global warming threshold and the ten hottest years on record were all in the last decade," said Rep. Beyer. "I have heard colleagues rail for years against 'the government picking winners and losers' when we use the tax code to support a clean energy transition, yet many of those most fiercely opposed to building green jobs with tax credits fiercely guard tax subsidies for massively profitable oil companies. Those tax credits are terrible policy in every way and we should end them permanently."

"According to the International Monetary Fund, the fossil fuel industry receives $757 billion a year in direct and indirect tax subsidies from the United States," said Rep. Casten. "In the last decade, we have seen the fossil fuel industry teetering on the verge of irrelevance because it cannot compete with cleaner, cheaper energy sources, but it's been kept afloat by these subsidies. I'm proud to introduce this legislation with Reps. Beyer and Levin to unrig our energy markets, lower emissions, and protect public health."

"California is experiencing some of the most devastating wildfires in our country's history, and these fires are made worse by climate change," said Rep. Levin. "While California burns, the oil and gas companies responsible for accelerating the climate crisis continue to receive billions of dollars in tax subsidies every year, all while making record profits. Ending these corporate giveaways will help us fight the climate crisis, hold those who are responsible accountable, and help the U.S. invest in clean energy."

Despite consistent profitability, fossil fuel companies receive billions of dollars in federal tax breaks and subsidies, which underwrite the costs of continued oil and gas production. The forgone revenues undermine the United States' ability to combat the climate crisis and invest in critical initiatives like education, housing, infrastructure, and healthcare. The subsidies also distort the energy market, creating an unfair and economically-inefficient advantage for polluting fuels against solar, wind, geothermal, nuclear, and hydro power.

The End Oil and Gas Tax Subsidies Act, previously sponsored by retired Congressman Earl Blumenauer (D-OR), would amend the Internal Revenue Code by:

• Increasing the amortization period for geological and geophysical expenditures from two years to seven years;
• Repealing the Section 45I tax credit for producing oil and gas from marginal wells and the Section 43 tax credit for enhanced oil recovery;
• Repealing the Section 263(c) tax deduction for the intangible drilling and development costs of oil and gas wells;
• Repealing percentage depletion in Section 613A;
• Repealing the Section 193 tax deduction for tertiary injectant expenses;
• Repealing the exception to passive loss limitations for working interests in oil and gas property.

Text of the End Oil and Gas Tax Subsidies Act can be found here.

Rep. Beyer serves on the House Ways and Means Tax Subcommittee and is Vice Chair of the Sustainable Energy & Environment Coalition.