Now Is the Time—Stop Giveaways to the Fossil Fuel Industry
Momentum is growing in Congress and among the public to eliminate government giveaways to the fossil fuel industry. Hearings such as the one hosted May 19 by the House Natural Resources Subcommittee on Oversight and Investigations are illustrating how irresponsible it is—fiscally and environmentally—to continue to subsidize and provide loopholes to the fossil fuel industry when clean energy is the better investment for our families and our future. It’s a public policy embarrassment that this country continues to enable and enrich polluters at the expense of all of us, especially in a climate crisis. There’s no time like the present to put an end to this misguided practice.
We know that to stop global warming and protect communities and nature, we must stop burning fossil fuels. Yet, our government and others around the world continue to use taxpayer money and government resources to support the fossil fuel industry, helping it harm us. Loopholes in the tax code, below-market public land and ocean leasing rates, support for fossil fuel development projects and many other giveaways amount to at least $15 billion a year in giveaways to these companies.
Public support is growing around the urgency to shift to clean energy and stop the use of fossil fuels to protect our communities, natural areas and climate. At the same time, we are seeing decisionmakers pushing to do away with having our hard-earned taxpayer dollars go to boost fossil fuel industry profits.
And we’re seeing a drumbeat of momentum from decision-makers. On Earth Day, Representative Rho Khanna (D-CA) chaired a hearing of the Environment subcommittee of the House Committee on Oversight and Reform on the role of fossil fuel subsidies in preventing action on the climate crisis.
The hearing shined a critical spotlight on the need to eliminate fossil fuel subsidies and the on-the-ground impacts of these giveaways. It also showed the growing public focus on how unacceptable fossil fuel subsidies are. This comes at a moment where the Biden administration is proposing elimination of many fossil fuel subsidies and a number of Congressional bills propose to do the same.
At the hearing, Representative Katie Porter (D-CA) demanded that an industry lobbyist explain why ‘taxpayers have to subsidize you and your polluting clients.’
Tara Houska, prominent activist and founder of the Giniw collective, an indigenous women-led organization that fights destructive fossil fuel development, spoke of the devastating impact of the industry on black, indigenous, and communities of color in a response to a question posed by Representative Alexandria Ocasio-Cortez (D-NY).
Youth climate activist Greta Thunberg also called upon policymakers to take immediate action to end the giveaways.
The most comprehensive legislative proposal—the End Polluter Welfare Act of 2021—would end approximately $15 billion a year in government spending that lines the corporate pockets of the oil, gas, and coal industries. Top subsidies targeted for elimination include a tax loophole that “allows companies to deduct a majority of the costs of drilling new wells domestically”; and another provision in the tax code, known as ‘percentage depletion’ that allows oil and gas companies to shrink the value of their assets for tax purposes more quickly than other industries. The bill would also end below-market leasing and royalty rates currently charged to the fossil fuel industry for development on public lands. Senator Bernie Sanders (D-VT) and Representative Ilhan Omar (D-Minn) authored the legislation and have gained co-sponsorship from Senators Jeff Merkley (D-OR), Ed Markey (D-MA), Corey Booker (D-NJ), Chris Van Hollen (D-MD), Elizabeth Warren (D-MA) and Representative Nanette Diaz Barragán (D-CA).
On Earth Day, Senator Ron Wyden (D-OR), Chair of the Senate Finance Committee introduced the Clean Energy for America Act, which also would eliminate the biggest fossil fuel subsidies targeted by President Biden. The bill eliminates the biggest tax loopholes that benefits the oil and gas industry, and also “repeals the special treatment of fossil fuels under the publicly traded partnership rules, putting them on equal footing with other energy companies.” The legislation is cosponsored by 25 Senators, including Senator Chuck Schumer and Finance Committee members Debbie Stabenow (D-MI), Maria Cantwell (D-WA), Tom Carper (D-DE) and Ben Cardin (D-MD).
These most recent proposals build on The End Oil and Gas Tax Subsidies Act, which would “eliminate eleven provisions of the tax code that unfairly benefit oil and gas companies,” introduced by senior member of the House Ways and Means Committee, Representative Earl Blumenauer (D-OR), as well as Representatives Sean Casten (D-IL), Donald McEachin (D-VA), and Katie Porter (D-CA).
So Congress is putting its own weight behind the Biden Administration’s call to end fossil fuel subsidies and there’s a growing chorus of policymakers, communities, and taxpayers across the country that the time has come to end wasteful, unfair, and destructive government giveaways for an industry on its way out. To stop global warming and save people and the planet from further climate destruction, it’s a no-brainer to take immediate action to plug these loopholes and stop giving polluters a free ride.