It doesn’t take long before a typical conversation with a U.S. energy executive turns to subsidies—those enjoyed by others. The fossil-fuel industry often brings up green energy’s explicit tax incentives, while the latter will point to the longevity of special tax preferences for oil and gas.
President Biden’s tax plan proposes to extend tax credits for renewable energy while ending tax benefits for fossil fuels. Oil-and-gas lobbyists could soon find themselves in the awkward position of denying that any special treatment for those companies exists, while digging in their heels to protect that treatment. And while the impact on actual hydrocarbon production could be limited, such a move would mark the end of an era for an industry that has held much influence over the past century.
The U.S. Treasury said last week the tax plan would “end long-entrenched subsidies to fossil fuels,” which it estimates would increase government tax receipts by more than $35 billion over the next 10 years.
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