Do fossil fuel producers benefit from federal and state tax breaks?
Fossil fuel producers benefit from federal tax treatment of many aspects of their operations, including but not limited to exploration, infrastructure development and drilling costs.
The Tax Policy Center, a Washington research group, estimated that federal policies will cost $11.5 billion in foregone tax revenues from 2019 to 2023. Supporters say the tax breaks reduce dependence on foreign oil. Many were enacted decades ago, long before the recent resurgence in domestic oil production.
According to the Environmental and Energy Study Institute, an energy-policy research nonprofit, “direct subsidies” to the fossil fuel industry conservatively total $20 billion per year, with 80% going to oil or natural gas producers.
States including Texas, California, Oklahoma, Louisiana and New Mexico also provide tax incentives to oil and gas producers.
