New Coalition Fights Oil and Gas Giveaways
Public Citizen News / March-April 2025
By Alan Zibel
This article appeared in the March/April 2025 edition of Public Citizen News. Download the full edition here.
In his second term in office, President Donald Trump and Republicans in Congress have made clear they will do everything possible to give massive handouts to the fossil fuel industry.
Public Citizen and its allies are fighting back.
A coalition of anti-corruption, economic justice, faith, youth, and climate leaders launched a new coalition in February aimed at ending government handouts to fossil fuel companies.
The broad coalition, United to End Polluter Handouts, calls for the $170 billion in projected fossil fuel subsidies over the next decade to be redirected to benefit society rather than destroy the planet.
“Big Oil has for decades deployed its political power to generate a geyser of taxpayer handouts and subsidies—and the oil and gas corporations are coming back for more,” said Robert Weissman, co-president of Public Citizen. “This time, however, a mobilized public will work to stop the flow of taxpayer money to this industry, which threatens human existence on this planet.”
Oil and gas executives and their lobbyists want to preserve and expand specific tax breaks benefiting the industry, making the industry’s existing business model even more profitable. Sen. James Lankford (R-Okla), a key oil and gas industry ally, has been pushing to do so, claiming it is necessary to stimulate economic growth.
Republicans also want to require the government to regularly auction off massive amounts of public lands and offshore waters for oil and gas drilling, while rolling back federal and state efforts to promote renewable energy and diminish fossil fuel consumption.
In addition to combating efforts to extend new tax breaks for oil and gas, the coalition aims to raise awareness on Capitol Hill and in the public about longtime public subsidies for the climate destroying oil and gas industry. These handouts include:
Unfair deduction for drilling costs: Fossil fuel companies are allowed to add up the costs of developing an oil or gas well and immediately count them against the company’s taxable income in a single year — a departure from normal corporate tax accounting practices requiring companies to make those deductions over the life of the asset. Called the “intangible drilling costs” deduction, this tax break increases profitability for U.S. oil fields by 11% and gas fields by 8%, according to the Stockholm Environmental Institute and Earth Track.
Tax dodges for overseas profits: Extractive industries can classify payments to foreign governments as taxes rather than royalties, enabling them to take credit against their U.S. taxes. This is a de facto subsidy for payments to some of the most corrupt regimes. In 2023, Exxon paid $7.4 billion in taxes and royalties to the United Arab Emirates, more than it paid in taxes to the United States or any other country.
Tax handouts just for Big Oil & Gas: All overseas oil and gas extraction profits are allowed to be repatriated back to the United States without paying any U.S. taxes. Such preferential treatment is not awarded to any other industry.
The coalition includes a diverse range of organizations, including Public Citizen, Hip Hop Caucus, Zero Hour, Friends of the Earth, and Our Revolution. Coalition leaders plan to engage a broad-based movement to pressure Congress to end the subsidies and redirect the funds toward clean energy, environmental justice, and community needs.
“Every day, Donald Trump, Elon Musk, and [their] minions are putting communities directly in the line of fire from polluters—handing over billions in fossil fuel subsidies to mega-wealthy Big Oil and Big Gas executives, while everyday Americans struggle to pay their energy bills and face the costs of rebuilding homes and communities after disasters supercharged by climate change,” noted Sen. Ed Markey, (D-Mass.).