As the climate crisis accelerates, U.S. Rep. Ro Khanna (D-Calif.) has reintroduced legislation targeting one of the most egregious aspects of fossil fuel policy: billions of dollars in taxpayer subsidies funneled to fossil fuel companies. These subsidies, Khanna argues, are being used to extract even more climate-damaging oil from the earth, fueling environmental destruction and contributing to a worsening global crisis.
Khanna’s bill, the End Polluter Welfare for Enhanced Oil Recovery Act, is aimed squarely at halting these subsidies, specifically targeting the billions in public funds given to companies that use captured carbon dioxide for enhanced oil recovery (EOR)—a process in which CO2 is injected into oil wells to extract more fossil fuels.
“The fossil fuel industry receives over $20.5 billion in taxpayer dollars every year while fleecing American consumers and driving a global climate crisis,” Khanna told Common Dreams in an exclusive interview. “The End Polluter Welfare for Enhanced Oil Recovery Act will eliminate the subsidy for captured carbon used for enhanced oil recovery, which only leads to more fossil fuel extraction and does nothing to mitigate climate change.”
This push comes during an intensifying climate emergency, marked by record heat waves, wildfires, and other catastrophic climate events. For Khanna and many environmental advocates, continuing to subsidize the extraction of fossil fuels through captured carbon only prolongs dependency on oil and gas, exacerbating the climate crisis rather than mitigating it.
Carbon capture technology has long been touted as a necessary tool in the fight against climate change. But critics of the technology argue that its current application in the U.S. is deeply flawed. Instead of being used to meaningfully reduce emissions, most of the CO2 captured is reinjected into oil wells, enhancing fossil fuel extraction and profits.
“Oil drilling is the real story behind the fossil fuel industry’s carbon capture obsession,” said Jim Walsh, policy director at Food & Water Watch, an environmental group that has endorsed Khanna’s bill. “These corporate polluters are raiding public coffers from what could easily be hundreds of billions of dollars while greenwashing the further degradation of our climate.”
Walsh and other environmentalists also emphasize the significant risks to communities living near fossil fuel infrastructure. Expanding EOR projects often leads to the construction of thousands of miles of dangerous pipelines, threatening public health and safety while doing little to address the climate crisis.
Despite the controversy surrounding EOR, Congress has continued to expand tax breaks for companies engaged in this process. The Inflation Reduction Act (IRA), hailed by some as a landmark climate package, included a provision that increased Section 45Q tax credits from $35 to $60 per metric ton of CO2 injected into oil wells for EOR.
Khanna’s bill would specifically eliminate these tax credits, cutting off a key financial lifeline for fossil fuel companies that benefit from taxpayer support. These companies, critics argue, have used such incentives to perpetuate fossil fuel dependency and undermine efforts to transition to renewable energy sources.
“It’s unconscionable that American taxpayers are still subsidizing oil and gas companies to extract even more fossil fuels through so-called ‘enhanced oil recovery,’” said Mattea Mrkusic, senior energy transition policy lead at Evergreen Action, another organization supporting Khanna’s efforts.
Khanna’s reintroduction of the bill comes at a critical moment. The U.S. is heading into a pivotal general election, and the future makeup of Congress—and the White House—will play a significant role in shaping climate policy. Democratic Vice President Kamala Harris is seen as a strong supporter of climate action, but the specter of Donald Trump, the Republican frontrunner, looms large. Trump has pledged to gut federal climate policies and has called on Big Oil to back his campaign with $1 billion.
Beyond the political stakes, the economic costs of the climate crisis are mounting. Extreme weather events, fueled by climate change, are causing billions of dollars in damages each year, disproportionately impacting marginalized communities. Continuing to subsidize fossil fuels, advocates argue, is a costly and harmful use of taxpayer money.
“Climate change is no longer a distant threat—it’s happening right now, fueling more frequent and severe weather events, disproportionately impacting marginalized communities, and costing the American people billions every year,” Mrkusic added. “Taxpayers shouldn’t be left footing the bill to help Big Oil boost its profits at the expense of our health and economy.”
Khanna’s bill has garnered support from both lawmakers and environmental organizations. Fifteen other House members have signed on to co-sponsor the bill, and over a dozen advocacy groups have thrown their weight behind the legislation, including the Sierra Club, Greenpeace USA, Oil Change International, and 350.org.
Mahyar Sorour, director of beyond fossil fuels policy at the Sierra Club, echoed Khanna’s sentiments about the absurdity of continued fossil fuel subsidies. “Fossil fuel companies have raked in astronomical profits at the expense of communities while Big Oil and Gas lobbyists actively work to keep us hooked on their polluting products that perpetuate the climate crisis,” Sorour said.
“It is absurd that taxpayers should then also provide a blank check through subsidies, corporate giveaways, and sweetheart deals,” Sorour continued. “We must end the billions of dollars in wasteful taxpayer subsidies to the fossil fuel industry.”
Khanna’s efforts to end fossil fuel subsidies are part of a bigger push to eliminate government support for polluting industries. He is also a co-lead on the End Polluter Welfare Act, a sweeping bill introduced earlier this year by Sen. Bernie Sanders (I-Vt.) and Rep. Ilhan Omar (D-Minn.). That legislation aims to close tax loopholes and end corporate handouts to fossil fuel companies, potentially saving taxpayers up to $170 billion over the next decade.
For Khanna and his allies, the message is clear: the time has come to stop subsidizing the fossil fuel industry and start investing fully in a clean energy future.
“We are grateful to Rep. Khanna for leading this legislation and look forward to supporting this and other types of similar legislation that hold Big Oil and Gas companies accountable,” said Sorour.
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