Oil and gas tax break buried in 'domestic energy' bill
H.R. 662 — Promoting Domestic Energy Production Act · Filed by Mike Carey (R-OH) · 43 cosponsors · Introduced Jan 23, 2025 · Referred to committee
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What it does
This bill amends the tax code to allow oil and gas companies to deduct intangible drilling and development costs (costs of drilling wells, not physical equipment) when calculating their adjusted financial statement income for tax purposes. Currently, these costs are treated differently for tax and accounting purposes; the bill aligns the two, allowing companies to reduce their taxable income by these drilling expenses, effective for tax years starting in 2026.
Why we flagged it
The bill's operative mechanism is a targeted tax deduction for a single industry sector. It reduces the tax treatment of drilling costs, allowing companies to claim deductions previously unavailable, functioning as a direct tax subsidy to fossil fuel producers.
What the text implies
- The bill reduces federal revenue without a corresponding public investment or environmental condition, effectively subsidizing oil and gas extraction at taxpayer expense.
- Aligning tax and accounting treatment for drilling costs may incentivize increased drilling activity by improving after-tax returns on exploration, potentially accelerating fossil fuel development.
- The deduction applies retroactively to 2026 and forward, creating an ongoing revenue loss that compounds annually as companies claim the benefit on all qualifying drilling expenses.
Section numbers refer to the bill text the analysis read — linked under Primary records below.
Who it affects
The bill reduces federal tax revenue from oil and gas producers without offsetting public benefit or investment requirement. The deduction flows directly to corporate tax savings in a narrow industry, reducing the tax base available for public services while subsidizing fossil fuel extraction.
Who stands to gain
- oil and gas exploration and production companies
- integrated energy companies with upstream operations
- independent oil and gas producers
Named in the bill
Internal Revenue Code Section 56A(c)(13), Section 167 (depreciation deductions), Section 168 (accelerated cost recovery system), Section 263(c) (intangible drilling and development costs), oil and gas industry, U.S. Department of the Treasury
Where it stands
43 cosponsors: 40 Republicans, 3 Democrats.
- Jan 23, 2025 — Introduced · Congress.gov: “Introduced in House”
- Jan 23, 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
1 lobbying clients named this bill on 2 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $500,000 in lobbying spend. A filing names 24 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 0% of bills with at least one filing.
Mike Carey, the sponsor, reported $1,809,017 in PAC receipts in the 2026 cycle.
- Independent Petroleum Association of America — $500,000 on 2 filings
Lobbying Disclosure Act filings through Jul 18, 2026. A filing shows who paid to lobby on a bill it names, not what changed.
How this was measured
Analysis — Quorum's AI read the bill text published by Congress.gov (1,317 characters) on Jun 3, 2026. Section numbers in the findings refer to that text, linked below; transparency and hidden-provision scores are compared against the median of 16,222 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
Money — Senate Lobbying Disclosure Act filings whose specific-issue field names this bill for quarters ending Dec 2025 to Jun 2026. A filing's amount is reported whole beside the median number of bills a filing names; it is never divided across them. PAC receipts are FEC-reported contributions to the sponsor's candidate committee in the 2026 cycle.
As of — lobbying records through Jul 18, 2026 · page rendered 2026-10-20.
“Oil and gas tax break buried in 'domestic energy' bill” QuorumCivic. https://share.quorumcivic.app/bill/119/hr662 Report an error
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