KHANNA, GRIJALVA, QUIGLEY ANNOUNCE LEGISLATION TO REPEAL FOSSIL FUEL SUBSIDY FOR ENHANCED OIL RECOVERY

Press Release

December 13, 2021 -- Today, Representatives Ro Khanna (CA-17), Chair of the House Oversight Subcommittee on the Environment, Raúl Grijalva (AZ-03), Chair of the House Natural Resources Committee, and Mike Quigley (IL-05), member of the House Committee on Appropriations, introduced the End Polluter Welfare for Enhanced Oil Recovery Act to repeal a tax giveaway that enables the fossil fuel industry to profit off capturing carbon emissions and using them to increase oil production.

The version of Build Back Better that was passed by the House did not include any of the domestic fossil fuel subsidies repeal passed by the Senate Finance Committee earlier this year. But the transition to a clean energy future relies on eliminating the special privileges that the fossil fuel industry currently enjoys over other industries.

The End Polluter Welfare for Enhanced Oil Recovery Act would reform one of the largest domestic fossil fuel subsidies, The Tax Credit for Carbon Sequestration (Section 45Q). Right now, fossil fuel companies receive a tax credit for injecting carbon dioxide into oil wells to extract more oil, a process known as enhanced oil recovery (EOR). In the United States, of all carbon captured, 95% is used for EOR. This means increased oil and gas production, more pollution and additional costs for American taxpayers. Just this one subsidy is predicted to amount to $7.8 billion dollars over the next ten years. The public should not be on the hook for increasing the profits of the fossil fuel industry.

"Using carbon capture as an excuse to continue drilling for oil is not a climate change solution," said Rep. Ro Khanna. "It's our responsibility here in Congress to expose the fossil fuel subsidies in our tax code and work to end them. Unlike when they were first created, these subsidies no longer create jobs. Instead, they undermine efforts to tackle the climate crisis. I'm proud to introduce this bill to end one of the biggest fossil fuel subsidies and set us on the path to a clean energy economy."

"The American people are tired of giving handouts to the oil and gas industry and demand real action on climate change," said Rep. Grijalva. "Rather than subsidize companies trying to squeeze the last drops of profit out of wells past their expiration date, we need to do everything in our power to reduce our reliance on fossil fuels and limit carbon pollution. I'm proud to cosponsor this bill, and I look forward to enacting reforms to our tax code that incentivize real emissions reduction, not more drilling and pollution."

"The American people do not want to subsidize oil and gas production with their hard-earned tax dollars. We are living every day with a warming climate that has been largely caused by increased fossil fuel emissions. We should be encouraging oil and gas companies to move to clean energy sources, not subsidizing their continued mining of fossil fuels. I'm proud of the steps this bill takes to correct the tax code and properly align incentives with a clean energy future," said Rep. Quigley.

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