RELEASE: KHANNA, GRIJALVA, QUIGLEY ANNOUNCE LEGISLATION TO REPEAL FOSSIL FUEL SUBSIDY FOR ENHANCED OIL RECOVERY
Washington, DC – 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.
"We need to transition off fossil fuels, not double down on subsidies for oil drilling. Repealing these fossil fuel handouts is the right thing to do for our climate and communities who are seeing their air and water poisoned by this destructive industry," said Jim Walsh, Senior Energy Policy Analyst, Food & Water Watch.
"Subsidizing the oil and gas industry to capture carbon dioxide and use it for extracting still more oil is a colossal waste of public resources, and makes no sense in the context of global climate catastrophe," said Basav Sen, Climate Justice Project Director, Institute for Policy Studies.
"A tax credit for enhanced oil recovery is a subsidy to drill more oil. We're in a deep hole addressing the climate crisis, and the first thing we need to do is stop digging. This bill is a example of the real climate leadership we need to get us out of this mess," said Collin Rees, Senior Campaigner, Oil Change International.
"Zero Hourendorses this legislation because at a time when climate disasters continue to become more commonplace, it is simply unacceptable for tax dollars to continue subsidizing the industry that continues to cause climate change and environmental destruction," said Zanagee Artis, Co-founder, Zero Hour
"Grassroots American Indians and Alaskan Natives in our Indigenous Environmental Network are demanding to stop any provisions in the Build Back Better Act that would allow subsidies for Enhanced Oil Recovery. EOR is not a low carbon oil and will result in a net increase in greenhouse gas emissions. Climate change and global warming is real in Native lands that is becoming a life and death situation for many of our people," said Tom B.K. Goldtooth, Executive Director, Indigenous Environmental Network
"The climate clock is ticking quickly. The urgent necessity of a transition away from fossil fuels is self-evident. In the bleak light of the worsening climate crisis, why give taxpayer money away to oil and gas companies to support an industry practice - Enhanced Oil Recovery - that forces the last drops out of a fossil fuel well? What possible policy goal can be served by undermining and counteracting the movement away from fossil fuels to renewable wind and solar energy? Why in the world would we pay these companies to further poison our air, water, soil and future? It is long past time to stop the subsidies for this destructive practice and invest in a clean, sustainable future," said Michelle Deatrick, Chair, DNC Environment and Climate Crisis Council.
The full list of organizations that have endorsed the End Polluter Welfare for Enhanced Oil Recovery Act include: Food & Water Watch, Greenpeace USA, Sierra Club, Sunrise Movement, Climate Justice Alliance, Our Revolution, Indigenous Environmental Network, Friends of the Earth, Oxfam America, Evergreen Action, Zero Hour, Institute for Policy Studies Climate Policy Program, Progressive Democrats of America, DNC Environment and Climate Crisis Council, Earthworks, Grassroots Global Justice Alliance, Oil Change International, Great Plains Action Society, U.S. PIRG, Environment America, and the Center for International Environmental Law.
The full text of the legislation can be viewed here.
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