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  • Energy Tax Facts
  • 26 Aug 21

The Hill: Oil producers push Democrats to preserve key drilling deduction

The U.S. tax code allows companies to recover the cost of drilling for oil and gas and preparing oil wells for production, a provision that helps boost U.S. oil production but has drawn criticism from environmental groups and Democratic lawmakers.

Senate Finance Committee Chairman Ron Wyden (D-Ore.), who wields significant influence over tax changes in the reconciliation package, is considering removing the intangible drilling costs deduction in the final bill, according to a committee spokesperson.

Wyden previously proposed repealing the deduction in his bill to overhaul energy tax incentives to boost clean energy development. President Biden also proposed eliminating the tax provision in his budget plan and the American Jobs Plan. 

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