Democrats call on House leadership to use spending plan to repeal fossil fuel subsidies

Aug 30, 2021
In The News

A group of more than 50 Democrats is calling on Speaker Nancy Pelosi (D-Calif.) and House Majority Leader Steny Hoyer (D-Md.) to include a repeal of fossil fuel subsidies in the party’s multitrillion-dollar infrastructure package.

The group, led by Reps. Carolyn Maloney (D-N.Y.) and Ro Khanna (D-Calif.), penned a letter to the Democratic leaders Monday asking that the repeal of fossil fuel subsidies be included in Democrats’ Build Back Better Act because they do not bolster U.S. energy independence or create new jobs.

“Fossil fuel subsidies should be repealed because, instead of enhancing American energy independence or creating jobs, they simply enhance the profits of fossil fuel companies,” the lawmakers wrote.

“We should not fall for the industry myth that these subsidies are necessary for good job creation,” they later added.

They specifically targeted subsidies that are only given to the oil and gas industries, including “the deduction for intangible drilling costs, corporate tax exemption for fossil fuel master limited partnerships (MLPs), percentage depletion, and the dual capacity taxpayer deduction for royalty payments to foreign governments on fossil fuels.”

The Democrats also argued that repealing subsidies for the oil and gas industries would help “advance racial justice,” writing that “Black and Brown communities are disproportionately affected by fossil fuel pollution.”

They wrote Black people are affected by pollution from harmful particles at a rate that is 54 percent higher than the overall population because of “the proximity of petrochemical and related facilities to their homes and neighborhoods.”

The letter also argued that fossil fuel-related jobs are “dangerous,” contending that “Fracking workers are experiencing toxic radiological exposure.”

“For these reasons, we implore you to include the repeal of fossil fuel subsidies in the Build Back Better Act,” the lawmakers wrote.

The idea of repealing fossil fuel subsidies has been a chief priority among Democrats this year.

Senate Majority Leader Charles Schumer (D-N.Y.) last week said the bipartisan infrastructure bill and Democrats’ reconciliation spending package would help reduce U.S. carbon emissions by 45 percent by the end of the decade compared to levels recorded in 2005.

Part of that decrease, 3.5 percent, was attributed to “fossil fuel subsidies repeal,” according to a graphic breaking down the 45 percent decrease.

President Biden’s budget proposal has also called for eliminating tax provisions that benefit the fossil fuel industry, a move that is projected to generate $35 billion over the course of a decade.

Specifically, the administration is looking to dismiss benefits received by the fossil fuel industry for enhanced oil recovery, a procedure of extraction that allows companies to get fuel they otherwise would not be able to access and another for “intangible” costs such as wages, repairs, supplies and other costs that are necessary for oil and gas drilling.