Republican tax plan would expand oil industry subsidies and cut clean energy support
Senate Republicans are advancing a tax bill that would provide $18 billion in new benefits to oil and gas companies while stripping or weakening key incentives for renewable energy and electric vehicles.
Nicholas Kusnetz reports for Inside Climate News.
In short:
- The Senate Finance Committee's draft tax plan increases subsidies for fossil fuel companies, including raising tax credits for carbon capture tied to oil extraction and letting firms deduct more drilling expenses.
- Provisions in the bill would reduce royalty payments for drilling on public lands, repeal electric vehicle tax credits, and mandate more federal oil and gas lease sales.
- Environmental advocates say the legislation rewards polluters and reverses progress made under the Inflation Reduction Act, while Republicans argue it promotes domestic investment and trims wasteful spending.
Key quote:
“This is a reckless expansion of Big Oil handouts paid for with cuts to the social safety net.”
— Lukas Shankar-Ross, deputy director for climate and energy justice, Friends of the Earth Action
Why this matters:
The fossil fuel industry already enjoys some of the most entrenched federal subsidies in the U.S. economy. Expanding those subsidies while removing support for renewable energy comes at a time when climate scientists are warning of intensifying global warming and its cascading health and environmental consequences — heat deaths, crop failures, water shortages, and more. Increasing tax breaks for oil production tied to carbon capture could also entrench technologies that prolong fossil fuel dependence under the guise of climate action. Meanwhile, eliminating credits for electric vehicles and energy-efficient upgrades makes it harder for families to access cleaner, healthier options.
Learn more: Republicans in Senate clash over how fast to cut clean energy tax breaks
