It’s time to stop using taxpayer dollars to inflate the bottom line of fossil fuel corporations. Instead of providing massive subsidies to the very polluters causing the climate crisis, we must invest in America’s clean energy future. President Biden has already committed to ending all fossil fuel subsidies and he took action in his very first week in office to begin rolling back corporate handouts to big oil. Now, he needs Congressional support to finish the job. 

Today, we're calling on Democrats in Congress to eliminate fossil fuel subsidies in the reconciliation infrastructure bill and redirect those funds to pay for the investments we need to fight the climate crisis.

The Problem: We’re Funneling Billions of Taxpayer Dollars Into The Coffers of Corporate Polluters

Despite the climate change-fueled heatwaves, fires, and droughts ravaging the country, the federal government is currently propping up the fossil fuel industry. These subsidies come in many forms, including providing direct tax incentives for extracting and refining fossil fuels, and allowing fossil fuel corporations to use and abuse public lands and waters with no accountability. 

Fossil fuel subsidies add up. The federal government bankrolls the fossil fuel industry to the tune of $121 billion in direct subsidies every year. And that number is several times larger if you consider all of the downstream impacts that we pay for because of the harms of fossil fuel use—deaths, disease, climate change. 

Subsidies pad the bottom line of fossil fuel corporations, and have a noticeable impact on their ability to do business. The extra money has been shown to actually push unprofitable projects into profitability. With higher profits, the fossil fuel companies can expand their operations and pollute more, further compounding the problem. 

As more fossil fuel pollution is produced, the associated harms skyrocket. Pollution from fossil fuels killed 8.7 million people globally in 2018, and is responsible for roughly 230,000 deaths annually in the US. This pollution causes asthma, respiratory infections, lung cancer, heart disease, stroke, and cognitive impairments, all of which disproportionately harm Black and brown communities. And the climate crisis continues to worsen at breakneck speed—2020 featured the greatest number of billion dollar disasters ever in the United States. 

What We Can Do About It: Congressional Democrats Have a Path to Eliminate Fossil Fuel Subsidies

A number of Democrats in Congress have for years called for ending fossil fuel subsidies. And President Biden has called for eliminating fossil fuel subsidies both in an executive order, and in his budget. Now, Congressional leaders must follow through, and seize this opportunity to direct ill-spent money to a better purpose. 

The End Polluter Welfare Act from Senator Bernie Sanders (I-VT) and Rep. Ilhan Omar (D-MN) lays forward a comprehensive roadmap for how to recoup the fossil fuel subsidies that are supporting the poisoning of our communities. This bill would abolish dozens of financial giveaways to corrupt, multinational fossil fuel corporations. It would update royalty rates to more accurately reflect the value of the public lands, and ensure competitive leasing practices. And it would prohibit taxpayer funding of fossil fuel research, and end federal support for international fossil fuel projects. 

The Clean Energy for America Act, introduced by Senator Ron Wyden (D-OR), also contains a crucial set of subsidies for repeal, mainly focused on those in the tax code. These include ending credits for enhanced oil recovery, intangible drilling costs, and the use of certain injectants. The bill would also close accounting loopholes, including those that allow fossil fuel companies to use special depreciation methods for pipelines or structure themselves in ways to avoid paying taxes. This bill has already garnered the support of all of the Democrats on the Senate Finance Committee, and should be incorporated into the reconciliation package. And on the House side, Representative Earl Blumenauer’s (D-OR) End Oil and Gas Tax Subsidies Act should be advanced through the Ways and Means Committee. 

The reconciliation package should address the full suite of subsidies, including by making polluters pay for the damage they cause. Senators Brian Schatz (D-HI) and Sheldon Whitehouse (D-RI) have introduced the Save Our Future Act, which would put a price on carbon and other harmful air pollutants poisoning American communities. This bill would help hold fossil fuel corporations accountable, and would provide a stream of revenue for communities and states that have to-date been reliant on fossil fuel income.

The Solution: Democrats Must Prioritize Ending Fossil Fuel Subsidies in the Reconciliation Bill

Fossil fuel corporations are poisoning our communities and worsening the climate crisis, and they have run decades-long misinformation campaigns to convince us otherwise. Enough is enough. Congressional leaders should be funding projects that make life better for Americans, not worse. Eliminating most fossil fuel subsidies is easily doable through reconciliation. This money can be used to build a clean energy future, and to support workers transitioning out of the fossil fuel industry, through programs that provide wage support, pensions, education benefits, and training opportunities. 

It’s time to end fossil fuel subsidies and use that money to fund the clean energy future that the American people are clamoring for. No climate, no deal.