Washington, D.C. – In a letter sent to Congress this week, more than 125 national, state and local advocacy groups called for an end to the 45Q carbon capture tax subsidies that encourage fossil fuel extraction through enhanced oil recovery (EOR). The letter was facilitated by the environmental organization Food & Water Watch and signed by groups including Sierra Club, Climate Justice Alliance, Bold Alliance and Earthjustice.

The letter states, in part: 

The oil company profits from EOR come at the expense of billions in public resources and community safety. The 45Q tax credit was never intended to function as a permanent entitlement for oil and gas production. Yet today it is doing exactly that, with the Environmental Protection Agency documenting over 90% of all carbon dioxide captured in the United States going to extract more oil, funded through billions in public subsidies… The Department of Energy (DOE) estimates that carbon dioxide used for EOR could ultimately result in the extraction of 177 billion barrels of otherwise uneconomic oil in the United States… Moreover, the 45Q tax credit program is uncapped, exposing taxpayers to unlimited losses. The Treasury’s own claims estimate the cost to taxpayers for 45Q at $43.6 billion over the next ten years alone.

Meanwhile, a report released today by Senate Budget Committee Ranking Member Jeff Merkley (D-OR) details more than $3.5 billion in new annual subsidies to huge fossil fuel corporations found in the Republicans’ 2025 budget reconciliation law. The report finds that expansion of 45Q through the reconciliation law will result in $14.2 billion in lost federal revenues over 10 years. The report also details a history of well-documented abuse and fraud in the 45Q program, noting that from 2010-2019, 87 percent of the credits – nearly $900 billion – was granted without any approved monitoring, reporting and verification. 

“This letter highlights the growing nationwide opposition to using taxpayer dollars to bankroll Big Oil’s profits – and pollution. At a time when families are feeling squeezed, Congress shouldn’t be writing blank checks to corporate polluters who are poisoning our water, pushing dangerous infrastructure onto communities, and destroying our climate,” said Jim Walsh, Policy Director, Food & Water Watch.

“Communities like mine in Southwest Louisiana have been the sacrifice zone for industry for far long. The 45Q tax credit isn’t climate action – it’s a blank check for corporations to extract more oil while working families foot the bill. We’re tired of subsidizing our own harm. These companies don’t live here, they don’t drink our water or breathe our air. But they’ll take our tax dollars and leave us with the consequences. Congress needs to end this corporate handout now,” said James Hiatt, Director, For a Better Bayou

“Capturing carbon dioxide for enhanced oil recovery, or to stop climate change, have two things in common: political scheming to make the rich richer, and massive taxpayer subsidies. We need real solutions to the challenges faced by everyday Americans — not handouts of taxpayer dollars to oil oligarchs,” said Paul Blackburn, Attorney & Energy Policy Advisor, Bold Alliance. 

“At a time when we are facing exorbitant energy prices, increased pollution from fossil fuel development, and the gutting of public health protections and environmental safeguards, the last thing we need is another handout to dirty oil and gas industries. The 45Q carbon tax subsidies, which give big business a tax break for digging, burning, and dumping more fossil fuels, is an egregious misuse of our limited public resources. We know where this will lead and who’ll pay the price: our families. This will only accelerate global warming and foment a public health crisis. Decisions like these are progressively walking us back from the futures we envision and deserve: one where we have community-led clean renewable systems,” said Mar Zepeda Salazar, Legislative Director, Climate Justice Alliance.

“Subsidization of enhanced oil recovery is a boondoggle for the public and the climate alike. 45Q’s boosting of this continued extraction is a massive giveaway to the fossil fuel companies polluting our communities and driving the climate crisis. It’s time to eliminate public giveaways for enhanced oil recovery once and for all,” said Collin Rees, United States Campaigns Manager, Oil Change International.