Congress quietly extends oil-industry tax breaks to geothermal firms

What it does

This bill amends the tax code to give geothermal energy companies the same tax breaks currently available to oil and gas companies. Specifically, it allows geothermal firms to deduct (amortize) geological and geophysical exploration and development costs over time, and exempts geothermal working interests from passive-loss limitations that normally restrict tax deductions. The result: geothermal companies pay less federal tax on their operations, matching the treatment oil and gas already receive.

Why we flagged it

The bill's operative mechanism is a tax deduction carve-out—it reduces the tax burden on a specific industry sector by extending existing oil-and-gas tax preferences to geothermal firms. This is a direct financial subsidy delivered through the tax code, not a regulatory reform or public-interest mandate.

What the text implies

• The bill extends tax benefits without requiring geothermal firms to meet any environmental performance standards, renewable-energy production targets, or consumer-price commitments, making it a pure tax giveaway rather than a climate or energy-policy instrument.
• By matching oil-and-gas treatment, the bill may entrench geothermal as a 'legacy' energy sector eligible for ongoing tax preferences, potentially creating political pressure to extend similar breaks to other energy sources.
• The passive-loss exception (§469) allows geothermal investors to deduct losses against other income, a benefit typically reserved for active business participants—this may enable wealthy passive investors to shelter unrelated income through geothermal holdings.

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

Who it affects

The bill reduces federal tax revenue by extending costly tax deductions to a new industry sector without offsetting revenue or public benefit. While geothermal energy is renewable and may serve climate goals, the tax mechanism here is a pure subsidy—ordinary taxpayers and other industries effectively subsidize geothermal development through foregone federal revenue. The bill does not require geothermal firms to meet environmental standards, produce energy at lower cost to consumers, or deliver a

Who stands to gain

• geothermal energy companies
• geothermal project developers
• investors in geothermal working interests

Named in the bill

Internal Revenue Code of 1986, Section 167(h)(1), Section 469(c)(3), geothermal energy sector, oil and gas industry

Where it stands

5 cosponsors: 3 Democrats, 2 Republicans.

• Dec 18, 2025 — Introduced · Congress.gov: “Introduced in House”
• Dec 18, 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

3 lobbying clients named this bill on 4 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $630,000 in lobbying spend. A filing names 12 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 61% of bills with at least one filing.

Celeste Maloy, the sponsor, reported $716,075 in PAC receipts in the 2026 cycle.

• Citizens for Responsible Energy Solutions, Inc. — $520,000 on 2 filings
• Quaise Energy, Inc — $60,000 on 1 filing
• Quaise Energy, Inc. — $50,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.