Environmental champion calls for end to fossil fuel subsidies

Environmental advocate Lisa McCormick today called for the abolition of all federal tax subsidies for oil and gas companies, citing significant cost savings and the urgent need to address climate change.

McCormick emphasized both the economic and environmental benefits of ending corporate welfare to polluters, which amount to nearly $5 billion annually.

"Federal tax subsidies for the fossil fuel polluting industry are a burden on taxpayers and a hindrance to our urgent climate goals," said McCormick. "We must redirect these funds to support clean energy initiatives that will drive our economy forward and protect our planet for future generations."

ExxonMobil Chief Executive Darren Woods received $36.9 million in total compensation for 2023, according to a regulatory filing from the giant polluter, which McCormick said should operate without corporate welfare.

The percentage depletion allowance allows independent oil and gas producers to deduct a percentage of their production's value from their taxable income, costing taxpayers approximately $500 million annually.

McCormick pointed out that this outdated provision unfairly benefits the oil and gas industry at the expense of taxpayers and that by eliminating it, funds can be redirected to support renewable energy projects that create jobs and reduce emissions.

"The percentage depletion allowance is an outdated provision that unfairly benefits the oil and gas industry at the expense of taxpayers," said McCormick. "By eliminating it, we can redirect $500 million annually to support renewable energy projects that create jobs and reduce emissions."

Another deduction for intangible drilling costs permits polluters to immediately write off most costs associated with tapping new wells, resulting in about $400 million in lost federal tax revenue annually.

McCormick, who took nearly four of ten votes cast away from US Senator Bob Menendez in the 2018 Democratic primary, argued that taxpayers should not be burdened by protecting polluter profits and that the money would be better spent on the development of sustainable energy technologies that will ensure a cleaner, healthier future.

"Intangible drilling costs should not be a taxpayer burden," said McCormick. "These funds can be better spent on research and development for sustainable energy technologies that will ensure a cleaner, healthier future."

The domestic manufacturing deduction allows oil and gas companies to write off a percentage of their income. McCormick suggested that phasing out this deduction, which only benefits pollution profiteers, could save significant taxpayer dollars.

McCormick argued that the domestic manufacturing deduction for these companies is a superfluous cost that does not foster genuine innovation. Abolishing this subsidy would equalize the competitive environment and stimulate investments in more sustainable industries.

"The domestic manufacturing deduction for oil and gas companies is an unnecessary expense that does little to promote true innovation," said McCormick. "Ending this subsidy will level the playing field and encourage investment in cleaner industries."

The enhanced oil recovery credit supports enhanced oil recovery projects. McCormick explained that eliminating this credit would not only save money but also discourage environmentally harmful practices. Enhanced oil recovery methods contribute to environmental degradation, and removing this credit will push the industry to adopt more sustainable practices and reduce its environmental footprint.

"Enhanced oil recovery methods contribute to environmental degradation," said McCormick. "Removing this credit will push the industry to adopt more sustainable practices and reduce its environmental footprint."

The marginal well production credit incentivizes production from marginal wells, costing taxpayers millions. Abolishing it will promote more efficient and responsible resource use. McCormick pointed out that marginal wells often produce minimal oil but significant pollution and that ending this credit will encourage better resource management and help transition our energy sector to greener alternatives.

"Marginal wells often produce minimal oil but significant pollution," said McCormick. "Ending this credit will encourage better resource management and help transition our energy sector to greener alternatives."

"By abolishing these polluter subsidies, the federal government could save approximately $4.6 billion each year, which is money that could be reallocated to support renewable energy projects, infrastructure improvements, and programs that promote environmental justice," McCormick said.

"Eliminating federal tax subsidies for oil and gas companies is a crucial step towards a sustainable future," McCormick said. "We must invest in clean energy solutions that will create jobs, improve public health, and combat climate change. It's time to prioritize the well-being of our planet and our communities over the profits of fossil fuel companies."