This month Rep. Ilhan Omar and Sen. Bernie Sanders introduced the End Polluter Welfare Act, arguably the most thorough effort to end fossil fuel subsidies in the United States. The bill includes provisions aimed at preventing the post-COVID economic recovery from further entrenching and enriching oil, gas, and coal companies.
The Act would eliminate an astonishing variety of tax deductions and subsidies that the fossil fuel industry currently enjoys, ranging from Renewable Electricity Production Credits for coal to the $75 million cap on corporate liability for offshore oil spills. The Act would save the American public an estimated $150 billion over the next ten years, according to its sponsors.
“Even while the country is facing unprecedented health and economic crises, the fossil fuel industry is bringing all its political might to extract ever more subsidies,” Omar and Sanders said in a joint statement. The EPWA would prevent “fossil fuel companies from taking advantage of the COVID-19 pandemic by restricting access to relief funds and limiting executive discretionary authority,” they said.
To that end, the legislation would:
- Prevent fossil fuel companies from receiving loans or loan guarantees under the CARES Act. They currently qualify to receive taxpayer-backed bank loans and investment through the secondary bond market.
- End federal fossil fuel lease sales during the pandemic.
- Cap the Strategic Petroleum reserve at its current physical limit and prevent the storage of privately-owned oil in the reserve.
- Prevent the President from using the Defense Production Act to make loans to fossil fuel companies.
- Eliminate the Secretary of the Interior’s authority to lower or waive drilling fees for fossil fuel leases on federal lands, something the Trump Administration has done during the pandemic.
- Bar banks participating in the Fed’s CARES Act programs from investing in or operating fossil fuel companies for two years.
Although the Act is unlikely to become law, it draws attention to the sheer volume of tax breaks and subsidies the industry now enjoys at the expense of the public and provides a roadmap that could be taken up in a more favorable political climate.