Congress moves to end $1B annual oil-industry tax subsidy
H.R. 8108 — End Polluter Welfare for Enhanced Oil Recovery Act of 2026 · Filed by Ro Khanna (D-CA) · 12 cosponsors · Introduced Mar 26, 2026 · Referred to committee
Your members of Congress
Enter a ZIP to see where your representative and both senators stood on this bill.
Looked up on this device — your ZIP is never stored on our servers.
What it does
This bill eliminates two federal tax credits for the oil and gas industry: the Enhanced Oil Recovery (EOR) credit under Section 43 of the tax code, and the ability to use captured carbon dioxide as a tertiary injectant (a method to extract more oil) to qualify for the Section 45Q carbon capture tax credit. The bill removes roughly $1–2 billion annually in tax subsidies that have historically supported oil extraction, effective immediately for new projects.
Why we flagged it
The bill's core function is to repeal two tax credits that subsidize oil and gas extraction. It is straightforward fiscal policy aimed at removing industry welfare, not a complex regulatory or appropriations measure.
What the text implies
- Elimination of the EOR credit may reduce domestic oil production incentives, potentially increasing U.S. reliance on foreign oil imports in the short term, though long-term climate and energy-transition goals may offset this.
- The carbon-capture carve-out (preventing CO2 use in EOR from qualifying for 45Q credits) closes a loophole where oil companies could claim climate-friendly tax credits while extracting more fossil fuels—a significant integrity fix for carbon-policy credibility.
The full analysis lists 4 implications of this text.
Who it affects
Ordinary citizens benefit from reduced federal subsidies to fossil fuel extraction, lowering the hidden cost of oil production borne by taxpayers. The bill redirects resources away from oil industry welfare toward general revenue, reducing the fiscal burden on the public.