Congress moves to end $10B annual fossil fuel tax breaks

What it does

This bill repeals ten major federal tax subsidies and preferences for oil and gas companies, effective January 1, 2025. It eliminates accelerated deductions for geological surveys, credits for marginal wells and enhanced oil recovery, percentage depletion allowances, and special accounting methods that reduce taxable income. It also restricts the foreign tax credit for dual-capacity taxpayers (companies receiving economic benefits from foreign governments) and broadens the excise tax on crude oil to include tar sands and other unconventional sources. The net effect is to increase the federal tax burden on major oil and gas producers and integrated energy companies.

Why we flagged it

The bill's sole operative purpose is to eliminate ten distinct federal tax preferences benefiting oil and gas companies. Every section targets a specific subsidy mechanism; there is no secondary purpose or rider.

What the text implies

• Section 10 (LIFO accounting ban) applies only to 'major integrated oil companies' meeting specific production and refinery thresholds, potentially exempting smaller independent producers and allowing them to retain the LIFO advantage.
• Section 11 (dual capacity taxpayer rules) may reduce foreign tax credits for U.S. oil companies operating in countries where they receive subsidies or economic benefits, but treaty obligations are preserved, limiting the practical impact.
• Section 12 (tar sands excise tax) expands the definition of crude oil subject to the Oil Pollution Act excise tax, increasing costs for unconventional oil extraction and potentially affecting Canadian tar sands imports.
• The bill's effective date (January 1, 2025) is retroactive to the date of enactment for some provisions (e.g., section 12), creating potential timing disputes for transactions in progress.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Ordinary citizens benefit from elimination of federal subsidies to profitable fossil fuel companies, freeing up tax revenue for public purposes and removing a market distortion that artificially lowered energy prices. The bill does not impose direct costs on consumers or restrict consumer rights; it reallocates tax burden from the general public to a narrow, profitable industry.

Named in the bill

Internal Revenue Code of 1986, Section 167(h) (amortization of geological and geophysical expenditures), Section 45I (marginal well credit), Section 43 (enhanced oil recovery credit), Section 263(c) (intangible drilling costs), Section 613A (percentage depletion for oil and gas), Section 193 (deduction for tertiary injectants), Section 469(c)(3) (passive loss exception for oil and gas), Section 199A (qualified business income deduction), Section 472 (LIFO accounting method), Section 901 (foreign tax credit), Section 4612 (excise tax on crude oil) — and 3 more

Where it stands

16 cosponsors: 16 Democrats.

• Jan 14, 2025 — Introduced · Congress.gov: “Introduced in House”
• Jan 14, 2025 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

2 lobbying clients named this bill on 3 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $520,000 in lobbying spend. A filing names 20 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 41% of bills with at least one filing.

Sean Casten, the sponsor, reported $783,050 in PAC receipts in the 2026 cycle.

• Independent Petroleum Association of America — $500,000 on 2 filings
• Fact Coalition (a Project of the Fund for Constitutional Government) — $20,000 on 1 filing

Lobbying Disclosure Act filings through Jul 18, 2026. A filing shows who paid to lobby on a bill it names, not what changed.