Bernie Sanders and Ilhan Omar Introduce Bill to Stop Fossil Fuel Subsidies

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Bernie and Ilhan say end fossil fuel subsidies!
Bernie and Ilhan say end fossil fuel subsidies!
Photo: Chip Somodevilla (Getty Images)

Sure, they heat up the planet, but the U.S. predominantly uses fossil fuels because they continually outcompete more sustainable forms of energy in the free market. Or so the neoliberal myth goes.

In reality, of course, the nation directly subsidizes the deadly oil, gas, and coal industries with billions of dollars—estimates range anywhere from $10 billion to $52 billion annually—in tax breaks, bailouts, and other financial privileges. According to one evaluation, the U.S. currently spends 10 times as much on fossil fuel subsidies as it spends on education. On Thursday, Sen. Bernie Sanders and Rep. Ilhan Omar unveiled legislation that would change that.

The bill, dubbed the End Polluter Welfare Act, would eliminate $150 billion over the next decade in tax loopholes and federal subsidies for fossil fuel companies. It would do away with income tax credits for drilling and coal plant construction, tax breaks for energy firms, allowances for fossil fuel firms to pay below-market royalty rates for oil and gas production, and more. Some loopholes it would close are over a century old. The bill also proposes a ban on taxpayer-funded research and development programs for the fossil fuel industry.


“Climate leadership means confronting the oil, gas, and coal industries head-on, and the End Polluter Welfare Act is a key piece of the puzzle,” said Collin Rees, a campaigner with Oil Change U.S. “Ending deadly public giveaways to the richest industry in the history of the earth is long overdue, and this bill would be a tremendous step toward a just and equitable phase-out of fossil fuels.”

Officials introduced the 2021 bill as Sanders chaired a Senate Budget Committee hearing on the cost of climate inaction, to which he invited CEOs of three major oil corporations. None chose to attend, which, lol. The 2021 measure has racked up six Democratic co-sponsors so far. It’s also won backing from 85 environmental, climate justice, and human rights advocacy groups—including Oil Change U.S.—who sent a letter to Congress on Thursday morning.


If this bill sounds familiar, it might be because representatives have been trying to get versions of it passed for a decade. But maybe this is its time to shine. After all, its introduction comes two weeks after President Biden released his infrastructure plan, which also proposed cutting subsidies to fossil fuel firms, albeit at a smaller scale. As Treasury Secretary Janet Yellen clarified last week, the administration’s plan would reduce subsidies $35 billion, which is a fraction of the Sanders-Omar proposal. But if Biden is serious about taking on the climate crisis, why stop at $35 billion?

“The End Polluter Welfare Act is key because it names and removes the broadest possible set of direct subsidies to fossil fuel production, making it clear that even $1 of public money supporting the Big Oil and Gas is too much,” said Rees. “Other plans to remove subsidies are less comprehensive and would let the fossil fuel industry retain its power to lie, delay action, and block solutions for too long.”


The new legislation should be a no-brainer. Research shows that removing financial incentives for continued fossil fuel production would decrease extraction and have huge benefits for the climate. Doing so would also because it would free up billions of dollars for the transition to a green economy, but Rees said that’s not the primary reason the legislation is crucial.

“[Fossil fuel] subsidies are nefarious primarily because of the political signal they send. It’s about government reconfirming every year that it still has the industry’s back,” he said. “The actual money involved is certainly germane and does matter, but the political impact of removing public support for the industry is massive and a key part of this fight.”


The legislation alone wouldn’t completely fix the problem of government handouts to fossil fuel companies. A study released last month showed that, in addition to pouring tens of billions of dollars directly into the fossil fuel industry each year, the U.S. also provides oil, gas, and coal companies with massive indirect subsidies by allowing them to avoid paying the true cost of the pollution, health risks, and other dangers with which they plague the planet.

But ending the direct giveaways is a crucial component of the overall fight to phase out of fossil fuels. The fossil fuel market crash during the covid-19 pandemic made it clearer that fossil fuels aren’t even a safe investment, and climate scientists have spent decades sounding the alarm about how extraction needs to end to avert climate catastrophe. The longer we continue subsidizing the deadly industry, the longer it will exist, and the worse our climate consequences will get.