Washington, DC — Today, Representative Ro Khanna (CA-17) alongside Senator Jeff Merkley (D-OR) reintroduced the End Polluter Welfare for Enhanced Oil Recovery Act (EOR) to end the tax break rewarding the fossil fuel industry for using carbon capture for EOR. The legislation would reform one of the largest and most egregious domestic fossil fuel subsidies.
Fossil fuel companies currently receive a tax credit for injecting carbon dioxide into oil wells to extract more oil, a process known as enhanced oil recovery (EOR). The credit was expanded in 2022 and is part of the $34.8B in subsidies Big Oil collects annually on top of the over $100B they earn in annual profits. The subsidies do nothing to lower prices at the pump and increase the profits of fossil fuel companies. Especially as Americans are paying over a dollar more per gallon at the pump on average due to President Trump’s war in Iran, we need to be prioritizing lowering prices for Americans, not using tax dollars to pad the pockets of the fossil fuel industry.
“Subsidizing enhanced oil recovery undermines our ability to hold Big Oil accountable and just increases profits for fossil fuel companies,” said Rep. Ro Khanna. “As the Trump administration continues the reckless war in Iran, Congress must ensure help goes to Americans getting crushed by prices at the pump and not Big Oil.”
“It is outrageous that Republicans included billions of dollars of new subsidies to oil companies in their ‘Big, Ugly Betrayal’ law while gutting health care for millions of Americans already struggling,” said Sen. Jeff Merkley. “Climate chaos is fueling wildfires, droughts, and other extreme weather events, while the fossil fuel companies making record profits are undermining our democracy with pay-to-play politics. Congress must put the health of the American people, our climate, and our economy above the wish lists of powerful special interests by passing this bill to end rewards for billionaire corporations at the expense of hardworking families.”
“As Americans are facing rising energy costs and a broad crisis of affordability, they are more fed up than ever with taxpayer handouts going to the very industries fleecing them – and poisoning the planet while they’re at it. With this critical legislation, Senator Merkley and Representative Khanna are standing up for families and pushing back on a system that priorities profits over people. Ending billions of dollars in corporate giveaways for the oil and gas industry should be at the top of a common-sense agenda in Congress,” said Jim Walsh, Policy Director, Food & Water Watch.
“The time to end handouts to oil billionaires is now. We are glad to see Representative Ro Khanna and Senator Merkley’s “End Polluter Welfare for Enhanced Oil Recovery Act” that will end tax breaks that encourage big business to dig, burn and dump more and put our communities in harm’s way. Contaminated drinking water, explosions, or pipeline leaks which can occur when using false climate scams such as enhanced oil recovery should be off limits, especially at a time when families face increasing attacks on their economic, health, and environmental well-being,” said Mar Zepeda Salazar, Legislative Director, Climate Justice Alliance.
“The grossly generous 45Q tax credit handout makes it profitable at just $16 per barrel for multi-billion oil corporations to extract what would be otherwise unprofitable oil deposits using carbon dioxide via the Enhanced Oil Recovery process, according to analysis by Enervus,” said Paul Blackburn, attorney and policy advisory at Bold Alliance. “Extraction costs via Enhanced Oil Recovery are not economic absent these wasteful federal subsidies that are fleecing taxpayers to boost Big Oil’s profits, and should be eliminated.”
Cosponsors: Senators Chris Van Hollen (D-MD), Ed Markey (D-MA), Cory Booker (D-NJ), Bernie Sanders (I-VT), and Elizabeth Warren (D-MA) and Representatives Rashida Tlaib (D-MI), Nanette Barragán (D-CA), Pramila Jayapal (D-WA), Maxwell Frost (D-FL), Delia Ramirez (D-IL), Jan Schakowsky (D-IL), and Kevin Mullin (D-CA).
The full list of organizations that have endorsed the End Polluter Welfare for Enhanced Oil Recovery Act of 2026 include: Better Path Coalition, Bold Alliance, Center for Biological Diversity, Center for International Environmental Law, Climate Justice Alliance, Earthworks, Eco-Justice Collaborative, Food & Water Watch, For a Better Bayou, Friends of the Earth US, Greater New Orleans Interfaith Climate Coalition, Oil Change International, Our Revolution, Sierra Club, The Alliance for Affordable Energy, The Raices Collab Project.
The full text of the legislation can be viewed here.
###
English 
Spanish