As the Senate works this week to pass major legislation that would slash taxes, climate programs and government spending, Republicans are poised to include billions of dollars in benefits for the oil and gas industry.
The new oil-targeted tax changes would cost the federal government about $18 billion in lost revenue over a decade, according to an analysis released Saturday by Congress’ Joint Committee on Taxation. For comparison, a plan to end a tax credit for energy-efficient home improvements was projected to save about $21 billion over the same period.
Environmental groups said the proposal, included in draft language released last week by the Senate Finance Committee, subsidizes fossil fuel companies at the expense of the American people.
“This is a reckless expansion of Big Oil handouts paid for with cuts to the social safety net,” said Lukas Shankar-Ross, deputy director for climate and energy justice at Friends of the Earth Action, part of a coalition of advocacy groups called United to End Polluter Handouts. “It’s pretty straightforwardly monstrous.”
On Monday, the coalition announced a six-figure advertising campaign to pressure senators to oppose the tax incentives.
The office of Senate Finance Committee Chairman Mike Crapo (R-Idaho) did not immediately respond to a request for comment. But Crapo said in a statement last week that the committee’s draft would provide tax relief to middle-class families, extend “pro-growth provisions” and introduce “new incentives for domestic investment.” He added that the legislation “also achieves significant savings by slashing Green New Deal spending” and, he claimed, cutting waste.
Congressional Republicans are working to pass a sprawling bill to extend and expand tax cuts enacted in 2017 under reconciliation rules that would allow them to pass the Senate with a simple majority. The House of Representatives passed its version of the bill in May, including the near-complete repeal of the most consequential climate and renewable energy provisions of the Inflation Reduction Act of 2022. The House bill would also significantly cut spending for Medicaid and other social programs.
The initial Senate drafts kept most of those changes from the House and included additional benefits that oil companies have sought for years. The most significant would affect a tax incentive for carbon capture and storage.
Existing law provides a tax credit of $85 per ton for companies that remove carbon dioxide from smokestacks and pump it underground for permanent storage so it won’t warm the climate. Oil companies can also use that captured carbon dioxide to squeeze more crude out of depleted oil fields, and current law provides a tax credit of up to $60 per ton of carbon dioxide for this practice.
The Finance Committee’s proposal increases the value for this so-called…
Read More: As GOP Tries to Pass Tax Bill, Senate Includes Billions in Benefits for Oil
