Critics of Biden’s proposed oil-and-gas industry taxes fueled by gas shortages

Screengrab Pres. Joe Biden April 9, 2021

By Casey Harper, The Center Square

Gas shortages on the East Coast have helped rally Congressional opposition to the portions of President Joe Biden’s infrastructure plan that would force oil and gas companies to pay more in taxes.

House Republicans sent a letter to House Speaker Nancy Pelosi, D-Calif., and House Majority Leader Steny Hoyer, D-Md., calling on Democrats to oppose Biden’s plan to “eliminate tax preferences for fossil fuels.”

The letter, signed by 55 Republicans, came after a cyber attack of Colonial Pipeline shut down a major pipeline on the East Coast and led to fear-driven gasoline shortages. The attack also raised questions about the nation’s energy infrastructure and vulnerability to attack.

“An infrastructure package should not include punitive tax provisions that would cripple a vitally important industry, lead to mass layoffs, skyrocketing energy costs for working families, higher prices at the gas pump, and give China and Russia the upper hand in a competitive global market,” read the letter, which was sent Thursday. “Policymakers should not be picking winners and losers, and if the oil and gas industry is truly the ‘loser’ that far left progressives want it to be, the market should decide.”

The letter marks the latest pushback against the tax law changes as Republicans use concerns over pipeline security this week to make their point.

“It’s one thing for policies to accelerate investment activity or production of certain products, but it is an entirely different matter to write laws that would punish a particular industry, especially one that is so fundamental to our economic growth and national security,” the letter read. “Using an ‘infrastructure’ package to weaken our energy infrastructure is a grave mistake that will hurt families, farmers, and small businesses still recovering from the pandemic.”

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The oil and gas industry relies heavily on longstanding tax breaks from the federal government. Part of the debate on the issue centers around whether the federal help for oil and gas companies should be characterized as subsidies or tax deductions. Many on the left say the tax breaks are generous subsidies, especially given the companies’ profits and environmental concerns.

Many Republicans argue they are not subsidies but necessary deductions that are normal for businesses.


The Center Square is a 501(c)(3) non-profit focused on state- and local-level government and economic reporting.