Fossil Fuels Get Too Many Government Handouts. Biden Wants to Cut Them off.

Business News/Analysis, Federal Agency/Executive Branch, Opinions, Policy, White House

April 6, 2021

Print This Article Share it With Friends

by Lili Pike (Vox) The American Jobs Plan proposes taking away major tax breaks for the fossil fuel industry. — One of the great ironies of climate politics is that America continues to subsidize — to the tune of billions of dollars a year — the very industries that are most responsible for the warming of the planet. Biden wants to put an end to that.

His American Jobs Plan, released last week, recognizes that if the US wants to hit decarbonization targets, and get climate change under control, cutting off government support for fossil fuels is a logical first step. The proposal takes aim at tax preferences, loopholes, and laws that allow fossil fuel companies to dodge costs and avoid cleaning up their pollution.

As part of the tax reform section of the plan, removing preferential treatment for oil, gas, and coal corporations would also free up federal dollars to support dozens of other climate initiatives, for which Biden has proposed around $1 trillion in investment.

But prying away these perks from the industry has been challenging in the past. President Barack Obama and congressional Democrats tried in vain to slice out subsidies, ultimately hitting Republican roadblocks.

Now, with a slim majority in Congress, Democrats have a shot at finishing the job. In the coming months, they will be working on an infrastructure bill that could incorporate many elements of Biden’s American Jobs Plan — including the section on subsidy reform.

…

Subsidies are often concealed in obscure language within state and federal tax codes, but Oil Change International combed through the records and produced an in-depth report in 2017. The authors chose to focus on subsidies for fossil fuel mining and drilling, which they argued are particularly egregious — and thus worth our attention — because they can tip the scale toward further fossil fuel extraction.

…

Another obscure but significant subsidy comes in the form of a corporate structure, “Master Limited Partnership,” which allows fossil fuel companies to avoid paying any corporate income taxes.

For the coal sector, the top giveaway has been cheap leases in the Powder River Basin in Wyoming and Montana, where the vast majority of coal mining on federal land occurs. Leases have been allocated without a competitive bidding process for decades. READ MORE

Comments are closed.

Advanced BioFuels USA