May 24, 2022

Casten, McEachin, Blumenauer Introduce 'People Over Petroleum Act' to Give $500 Cash to Americans Facing Energy Price Inflation Paid for by Repealing $6 Billion of Tax Subsidies for Fossil Fuel

Downers Grove, IL (May 24, 2022) – Today, U.S. Representatives Sean Casten (IL-06), Don McEachin (VA-04), Earl Blumenauer (OR-03) introduced the ‘People Over Petroleum Act' -- legislation to deliver Americans a $500 direct cash rebate paid for by eliminating 11 of the most egregious tax subsidies flowing to fossil fuel companies.

In March, Casten led Reps. McEachin, Blumenauer, and Porter in a March 30th letter [casten.house.gov] urging House leadership to address the problem by pairing a direct cash rebate for consumers with a repeal of some of the hundreds of billions in direct and indirect tax subsidies flowing to oil and gas companies after analysis by Accountable US found that oil and gas company giants Shell, Chevron, BP, Exxon posted record profits in 2021 totaling $75 billion while American consumers struggled to pay heating bills and fill up their gas tanks. According to the IMF, fossil fuels companies receive nearly $650 billion a year in direct and indirect U.S. tax subsidies.

Casten said, "Forcing taxpayers to subsidize an industry that's exploiting the war in Ukraine to rake in record profits as Americans struggle to fill up their tanks and climate catastrophe costs us $2 trillion each year isn't just bad policy, it's antithetical to free-market capitalism. By giving Americans $500 cash rebate paid for by repealing $6 billion of the most egregious tax subsidies flowing to oil and gas, we will lessen the pain families are feeling, stop funding petro-dictators like Putin, and insulate Americans against future energy price inflation—all while accelerating our transition to clean, cheap American-made energy."

"Virginians in my home state and Americans across the nation are feeling pain at the pump while the fossil fuel industry enjoys record-breaking, multi-billion-dollar profits. We cannot allow this type of behavior from Big Oil to go unchecked," said McEachin (VA-04). "High energy prices have left Americans struggling to fill up their tank while working to make ends meet. I am proud to lead my colleagues in introducing this crucial legislation to help Americans get through this tenuous period with direct cash rebates – think of them like gas debit cards, delivered directly to consumers. Our legislation will also ensure Big Oil pays its fair share and support our path to a clean energy future."

Blumenauer said, "Enough is enough. Eliminating tax breaks for the fossil fuels industry is long overdue. It's particularly insidious that oil and gas executives are seeing record earnings while the cost of gasoline, groceries, and rent climb higher and higher for the American people. This policy is common sense and sorely-needed at a moment like this."

Upon the bill's passage, the following 11 subsidies oil and gas companies currently enjoy would be eliminated:

  • Amortization of geological and geophysical expenditures
  • Producing oil and gas from marginal wells
  • Enhanced oil recovery credit
  • Intangible drilling and development costs in the case of oil and gas wells
  • Repeal of percentage depletion for oil and gas wells
  • Repeal of deduction for tertiary injectant
  • Repeal of exception to passive loss limitations for working interests in oil and gas properties
  • Reduction for qualified business income not allowed with respect to oil and gas activities
  • Prohibition on using last-in, first-out accounting for oil and gas companies
  • Modifications of foreign tax credit rules applicable to dual capacity taxpayers
  • Clarification of tar sands as crude oil for excise tax purposes
Bill text can be found here.

Casten, McEachin, and Blumenauer have led the call to end fossil fuel tax subsidies in both the 116th and 117th Congress. In March of 2021, they introduced the End Oil and Gas Tax Subsidies Act [casten.house.gov], which would eliminate nearly a dozen of the most egregious tax breaks that undermine our nation's ability to invest in renewable energy sources at the rate necessary to stave off the most catastrophic impacts of the climate crisis. Fossil fuel companies may complain that subsidies are needed to keep prices down, but gas markets are global and a direct rebate would provide far more significant relief to struggling Americans immediately while reducing dependence on foreign energy.