• Energy Tax Facts
  • 26 May 21

Senate Finance Committee Bill that Repeals Oil and Natural Gas Tax Provisions Moves Forward

Today the Senate Committee on Finance held a hearing to discuss Chairman Ron Wyden’s ‘Clean Energy for America Act.’ The sweeping energy tax legislation includes over 30 billion dollars in tax incentives for elective vehicles, AND contains the repeal of multiple oil and natural gas industry tax provisions including Intangible Drilling Costs and Percentage Depletion. In the final vote following debate on amendments, the bill received an even 14-14 party line result. Under the power-sharing deal struck between party leaders earlier this year, the full Senate is supposed to debate and vote to discharge bills from committees after deadlocked votes. But Wyden said at the conclusion of the 4 ½-hour markup that he will introduce the amended chair’s mark as new legislation and work to have it placed directly on the Senate calendar under a rule that allows legislation to bypass the committees process.

Barry Russell, IPAA President and CEO said of the Clean Energy for America Act, “The Democrat bill considered by the Senate Finance Committee today demonstrates an unjustified bias against American oil and natural gas that imperils future energy security. The provisions of this bill that repeal an array of oil and natural gas tax deductions were written solely to undermine American production. They target small businesses; they target the 12 million royalty owners who rely on their oil and natural gas income for their farms, ranches, and retirement; they will not reduce American reliance on oil and natural gas for two-thirds of its energy but return the nation to reliance of foreign energy supply.”  

In the hearing, Senator Pat Toomey (R-PA) described his amendment which would leave the Intangible Drilling Cost deduction intact. Watch him explain how IDCs are ordinary, necessary business expenses here. His amendment ultimately failed with a 14-14 vote.Senator John Cornyn (R-TX) decried the process committee Democrats have taken with the bill. He said, “I do not consider this bill to be in good faith. This is a full-frontal assault on my state. This is a full-frontal assault on consumers who will pay more…” (watch here)