A bipartisan coalition in the House has come together to introduce the Promoting Domestic Energy Production Act, a significant effort to reverse a provision in the Inflation Reduction Act (IRA) that specifically targets oil and gas producers. The bill, authored by Reps. Mike Carey (R-Ohio) and Vicente Gonzalez (D-Texas), has received support from over a dozen fellow members.
Equal Tax Benefits Aimed at the Oil and Gas Industry
The Promoting Domestic Energy Production Act seeks to ensure that the oil and gas industry receives the same tax benefits as other capital-intensive sectors. One of its main objectives is to allow companies to receive tax deductions on intangible drilling costs (IDC). These costs, which account for approximately 85% of oil and gas exploration expenses, cover labor and safety expenses.
Uniting for American Energy Independence
Rep. Mike Carey emphasizes the nonpartisan nature of American energy independence and believes that this bipartisan legislation addresses an unfair provision in the Inflation Reduction Act that penalizes energy producers in the United States. This is particularly concerning during a time of high inflation when Americans need relief from rising energy costs.
Supporting Domestic Energy Production
Rep. Vicente Gonzalez expresses his support for the bill, highlighting its promotion of the nation’s domestic energy production capabilities. The legislation aims to create and maintain American jobs, lower energy prices, and reduce dependence on foreign energy sources to tackle future energy challenges.
Defense of IDC Tax Deductions
According to Rep. Carey’s office, IDC tax deductions have long been a part of the U.S. tax code and are meant to acknowledge the costly and risky nature of oil and gas exploration. These deductions should not be considered subsidies, as they do not reduce overall taxes paid by companies but rather help them recover costs for future investments.
A Challenge to the Inflation Reduction Act
The Promoting Domestic Energy Production Act represents a significant bipartisan effort to challenge the Inflation Reduction Act that was passed in August 2022. Republicans are aiming to redirect funds that were designated for green energy projects, and this new legislation could prove to be one of their most successful endeavors to amend the IRA. It may be included in a broader tax package when Congress resumes its sessions after the summer recess.
Strong Bipartisan Support
In addition to Reps. Carey and Gonzalez, the bill has received support from a diverse group of lawmakers, including Reps. Henry Cuellar (D-Texas), Alex Mooney (R-W.Va.), Ryan Zinke (R-Mont.), Dan Meuser (R-Pa.), Greg Pence (R-Ind.), and Tom Cole (R-Okla.), who chairs the House Rules Committee. The unity demonstrated by these legislators showcases the bipartisan commitment to addressing issues surrounding the oil and gas industry and supporting American energy production.