End Polluter Welfare Act of 2025
Sponsored By: Senator Bernie Sanders
Introduced
Summary
End federal polluter welfare and raise fossil-fuel royalties. This bill would sharply reduce federal support for fossil fuels by terminating many tax breaks, banning royalty relief, and fixing multiple royalty rates at 18.75% while restricting government finance and programs that back fossil projects.
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- Families and coastal communities: Would expand Oil Pollution Act liability and broaden which onshore and offshore facilities can be held responsible for spills. It would add a 13¢ per barrel charge and a $2.0 billion Fund-balance trigger to boost Oil Spill Liability Trust Fund financing.
- Energy companies and investors: Would eliminate many fossil-fuel tax expenditures, end LIFO inventory accounting for oil gas and coal, require long 84-month amortization for exploration and development costs, and impose a new 13% Gulf of Mexico severance tax while fixing offshore royalties at 18.75%.
- Federal programs and lenders: Would cut or prohibit federal support for fossil projects across DOE offices, ARPA-E, Rural Utility Service loans, and major U.S. development finance agencies. It would also narrow CERCLA lender protections for very large asset managers.
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Bill Overview
Analyzed Economic Effects
9 provisions identified: 0 benefits, 7 costs, 2 mixed.
Ban federal financing for fossil projects
This bill would stop many U.S. agencies from supporting fossil-fuel projects. It would bar the Loan Programs Office, DFC, Export-Import Bank, TDA, USAID, MCC, and some USDA and DOT loans or grants for fossil projects. It would also rescind or condition U.S. contributions to international financial institutions that support fossil projects. The LPO rule would still allow projects that support qualified clean hydrogen as defined in the tax code.
End major fossil tax subsidies
This bill would stop many tax breaks that help fossil-fuel producers and related investors. It would bar new fossil-focused credits and end some existing credits, including the carbon sequestration credit for carbon captured after enactment. It would remove refined coal eligibility for production credits after 2025 and end several bonus deductions and special tax rules for fossil activities. If enacted, companies that now rely on these subsidies would face higher tax bills or slower tax benefits.
Slower write-offs for fossil costs
This bill would make many oil, gas, mining, and geological costs write off more slowly. Intangible drilling, exploration, tertiary injectant, and geological costs would be amortized over 84 months for post-enactment expenses. Geological and geophysical costs would move from 24 to 84 months. At the same time, new natural gas gathering lines placed in service after enactment would generally be 15-year property, which speeds write-offs for that narrow item.
New clean hydrogen credit rules
This bill would change the clean hydrogen production credit a lot. It would set the base credit at $0.60 per unit (adjusted for inflation). But electrolyzer hydrogen would qualify only if the electricity comes from specified renewables placed in service within 36 months of the hydrogen plant, is in the same DOE region, and is produced at least one hour before use. The rule applies to facilities placed in service after December 31, 2025.
Higher oil and coal royalties and fees
This bill would raise or fix several per-unit taxes and fees on oil and coal. Offshore and onshore federal royalty rates would be set at 18.75 percent and other mineral lease rates would be raised to 18.75 percent. It would add a 10¢ per barrel oil spill financing fee for oil received after 2025 when the Trust Fund falls below $2 billion. Black Lung excise rates would rise to $1.38 and $0.69 per unit. The bill would also ban royalty-relief grants and bar drawback refunds for certain petroleum taxes.
Tighter U.S. tax on foreign oil
This bill would make U.S. tax rules tougher for foreign oil companies and their U.S. owners. It would include foreign oil and gas extraction income in GILTI and add a new Subpart F category for large foreign oil producers. It would also limit some foreign tax credits for firms that act in a dual capacity in fossil-fuel businesses. The Subpart F rule applies only to large producers (about 1,000 barrels per day or more).
Stronger pollution rules and reviews
This bill would change pollution liability and environmental review rules. It would extend Oil Pollution Act liability to onshore facilities carrying diluted bitumen and similar oils. It would direct EPA to implement a Waste Emissions Charge rule for petroleum and gas systems. It would also repeal some NEPA sections and change review topics, and it would remove certain IRA offshore leasing provisions. Big lenders could lose a narrow CERCLA lender exclusion.
No USDA help for carbon capture
If enacted, USDA would no longer allow carbon capture and storage systems under the listed farm energy assistance. Farmers and rural applicants seeking that specific help would be ineligible for those systems under that program.
New 13% Gulf oil and gas tax
If enacted, the bill would create a new tax equal to 13% of the "removal price" for crude oil and natural gas taken from federal Gulf of Mexico submerged lands. Producers would be the taxpayers and must pay the tax. They could claim a credit for Federal royalties paid, but the credit cannot exceed the tax. The Treasury would set rules for quarterly withholding, deposits, recordkeeping, and special pricing rules for related-party or pre-sale removals.
Sponsors & CoSponsors
Sponsor
Bernie Sanders
VT • I
Cosponsors
Elizabeth Warren
MA • D
Sponsored 7/24/2025
Jeff Merkley
OR • D
Sponsored 7/24/2025
Peter Welch
VT • D
Sponsored 7/24/2025
Chris Van Hollen
MD • D
Sponsored 7/24/2025
Edward Markey
MA • D
Sponsored 7/24/2025
Cory Booker
NJ • D
Sponsored 7/24/2025
Roll Call Votes
No roll call votes available for this bill.
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