As DOGE takes a hacksaw to essential government functions in the name of “efficiency” and Congressmembers decry government “waste,” they are completely ignoring the massive amount of taxpayers dollars given to one of the most profitable industries of all time — the fossil fuel industry. According to the IMF, in 2022, the US government gave the industry an estimated $757 billion in subsidies. $757 billion. 

To be clear, of this $757 billion, around $20 billion were directly given away to the industry. The rest were implicit subsidies, public costs borne by activity that the industry profits from. 

While they are less obvious, implicit subsidies are just as real, and even more insidious. For example, researchers have linked liquefied natural gas pollution to 60 premature deaths and $957 million in healthcare costs per year. 

These lives and this money are a small fraction of the price the government is willing to pay for its dogged adherence to the fossil fuel industry’s agenda. These dead mothers and fathers, the sons and daughters struggling to breathe, are an indirect subsidy by definition, but the most direct example of the criminality of the government’s sale to the fossil fuel industry.

As Congressmembers prepare a budget reconciliation bill, they have an opportunity to save taxpayers billions of dollars and put the money towards programs that the public actually supports. The $20 billion the government hands directly to the fossil fuel industry could fund 513,764 four-year scholarships for university students, pay the salaries of 206,098 elementary school teachers, or ensure that nearly 7 million low-income children receive healthcare for a year. 

The truth is, these giveaways are a problem for everyone. A better world is being stolen from us.

Tax Cuts for Oil and Gas Cost Us Billions of Dollars

One major type of oil and gas industry giveaway is the tax deductions the industry can claim. These lower a company’s taxable income, reducing the amount of taxes they pay each year. 

The intangible drilling costs deduction, one of the oldest fossil fuel subsidies in the country, allows companies to deduct most of the costs of setting up oil and gas drilling wells. Created in 1913, the intangible costs deduction persists to this day, sapping taxpayer dollars for projects before they ever produce a single drop of oil. The Joint Committee on Taxation estimated that repealing this massive giveaway could bring in nearly $6.5 billion in revenue by 2032. 

Percentage depletion, another huge subsidy codified in 1926, allows oil companies to deduct their income by a “strangely specific” 27.5%. According to Senator Tom Connally, the Senator who sponsored it, “We could have taken a 5 or 10 percent figure, but we grabbed 27.5 percent because we were not only hogs but the odd figure made it appear as though it was scientifically arrived at.” Getting rid of this would bring back an estimated $7.3 billion, per the same report.

Despite the image of free market dominance, the fossil fuel industry is largely reliant on public money. According to a report from the Stockholm Environment Institute and Earth Track, as much as 60% of oil and gas reserves are “subsidy dependent,” meaning that without your money, they would stay in the ground. 

Your tax dollars are the only thing keeping fossil fuel prices from being totally unaffordable. Along with the industry’s lobbying, this has blocked the transition to cheaper, greener, cleaner energy. As a result, we now face climate chaos as well as higher energy bills. 

Tax Credits for Carbon Capture are a Fossil Fuel Giveaway in Disguise

The 45Q tax credit subsidizes carbon capture and storage (CCS), a technology by which, supposedly, the oil and gas industry will capture its own emissions and clean up its own pollution. 

In reality, carbon capture technology has never successfully reduced emissions on a commercial scale. The actual amount of captured carbon doesn’t come close to corporations’ targets. In one study, researchers found that one use of CCS would only capture 10-11% of emissions, not the industry’s touted 80 or 90%.

Even worse, internal documents show that fossil fuel corporations have no intention of actually reducing emissions with CCS. BP makes its end goal explicit, reporting that CCS can enable decades of continued fossil fuel expansion. 

In fact, the oil and gas industry can use carbon captured with CCS to extract more oil. Occidental Petroleum’s CEO Vicki Hollub reported that they hoped to tap into another 50-70 billion barrels of oil from direct air capture projects. In her words, the technology “gives our industry license to continue to operate for the [next] 60, 70, 80 years.”

Even if 45Q weren’t inherently flawed, a near-total lack of oversight allows corporations to get away with cheating the system. From 2010 to 2019, $894 million, nearly 90% of 45Q credits claimed, were approved without following the Environmental Protection Agency’s reporting requirements. 

Corporations aren’t required to verify capturing the carbon on site, nor do they have to report their common hazardous leaks. The public has no way of knowing if the captured carbon actually stays in the ground. 

Nevertheless, 45Q may cost us taxpayers anywhere from $3 billion (from 2022-31) on the low end to as high as $835 billion (from 2025-2042).

Deregulation Subsidizes Fossil Fuel Profits

Indirectly, but just as effectively, the laws that corporations pay politicians to pass are subsidies themselves, meant to guard the industry’s profits. From 2020-2024, oil and gas corporations have spent nearly $650 million lobbying to wrap the government around their will. 

Infamously, Donald Trump gathered the heads of industry at Mar-a-Lago and allegedly asked for $1 billion in campaign money. This request, while disgusting, is emblematic of the fossil fuel industry’s continuous control over our government.

Just as these individual subsidies above are clear giveaways to the industry, the framework of laws and regulations that govern them is often created for the same reason: to protect the industry’s profit. The House Natural Resources Committee has already proposed its reconciliation bill, containing dozens of provisions set to maximize revenue for oil and gas corporations at the expense of us and our environment. 

Under this bill, the government would lease out billions of acres of public land for drilling, fast-track drilling projects over the objection of the communities, and allow corporations to simply buy their way out of following environmental regulations. 

Polluter corporations are literally buying their own laws to expand their profits. They’re constantly threatening to override the will of the American people, even as fossil fuel expansion exacts greater and greater costs. However, increasingly, we are unifying to demand environmental justice from their government, especially as it has come under increasing attack.

Congress Must Finally Stand Up for Us and End Fossil Fuel Subsidies

As I write, our Congress is collaborating with the fossil fuel industry to ram through more giveaways and slashing crucial government programs in the process. This budget reconciliation bill may be one of the most environmentally destructive in recent memory.  

Massive giveaways are being devised behind closed doors while people across the country are being left defenseless against the destruction of our environment. But as they consider this budget reconciliation bill, Congress has an opportunity to stand up for us, and they must seize it. Lawmakers must defend our health and environment, stop benefits for Big Oil and Gas billionaires, and finally end fossil fuel subsidies.